VOL.

111, JANUARY 30, 1982 341

Pichel vs. Alonzo

*
No. L-36902. January 30, 1982.

LUIS PICHEL, petitioner, vs. PRUDENCIO ALONZO, respondent.

Public Lands; Cancellation of award of public land does not

automatically divest the awardee of his rights to the land.—Before going
into the issues raised by the instant Petition, the matter of whether, under the
admitted facts of this case, the respondent had the right or authority to
execute the “Deed of Sale” in 1968, his award over Lot No. 21 having been
cancelled previously by the Board of Liquidators on January 27, 1965, must
be clarified. The case in point is Ras vs. Sua wherein it was categorically
stated by this Court that a cancellation of an award granted pursuant to the
provisions of Republic Act No. 477 does not automatically divest the
awardee of his rights to the land. Such cancellation does not result in the
immediate reversion of the property subject of the award, to the State.
Speaking through Mr. Justice J.B.L. Reyes, this Court ruled that “until and
unless an appropriate proceeding for reversion is instituted by the State, and
its reacquisition of the ownership and possession of the land decreed by a
competent court, the grantee cannot be said to have been divested of
whatever right that he may have over the same property.”
Contracts; Interpretation of a document is not called for where its
terms are clear.—The first five assigned errors are interrelated, hence, We
shall consider them together. To begin with, We agree with petitioner that
construction or interpretation of the document in question is not called for.
A perusal of the deed fails to disclose any ambiguity or obscurity in its
provisions, nor is there doubt as to the real intention of the contracting
parties. The terms of the agreement are clear and unequivocal, hence the
literal and plain meaning thereof should be observed.
Same; Sale; Potential fruits of apiece of land may be the subject of
sale.—The subject matter of the contract of sale in question are the fruits of
the coconut trees on the land during the years from September 15, 1968 up
to January 1, 1976, which subject matter is a determinate thing. Under
Article 1461 of the New Civil Code, things having a potential existence may
be the object of the contract of sale.

_______________

* FIRST DIVISION.

342
342 SUPREME COURT REPORTS ANNOTATED

Pichel vs. Alonzo

And in Sibal vs. Valdez, 50 Phil 512, pending crops which have potential
existence may be the subject matter of sale.
Same; Same; A transfer of possession or ownership of the fruits of
apiece of land cannot be equated with the transfer of possession or
ownership of the land.—The contract was clearly a “sale of the coconut
fruits.” The vendor sold, transferred and conveyed “by way of absolute sale,
all the coconut fruits of his land,” thereby divesting himself of all ownership
or dominion over the fruits during the seven-year period. The possession
and enjoyment of the coconut trees cannot be said to be the possession and
enjoyment of the land itself because these rights are distinct and separate
from each other, the first pertaining to the accessory or improvements
(coconut trees) while the second, to the principal (the land). A transfer of the
accessory or improvement is not a transfer of the principal. It is the other
way around, the accessory follows the principal. Hence, the sale of the nuts
cannot be interpreted nor construed to be a lease of the trees, much less
extended further to include the lease of the land itself.
Public Lands; Sale; The grantee of public land is not prohibited from
selling the fruits thereof, like coconut fruits, which are meant to be gathered
and severed from the trees.—Resolving now this principal issue, We find
after a close and careful examination of the terms of the first paragraph of
Section 8 hereinabove quoted, that the grantee of a parcel of land under R.
A. No. 477 is not prohibited from alienating or disposing of the natural
and/or industrial fruits of the land awarded to him. What the law expressly
disallows is the encumbrance or alienation of the land itself or any of the
permanent improvements thereon. Permanent improvements on a parcel of
land are things incorporated or attached to the property in a fixed manner,
naturally or artificially. They include whatever is built, planted or sown on
the land which is characterized by fixity, immutability or immovability.
Houses, buildings, machinery, animal houses, trees and plants would fall
under the category of permanent improvements, the alienation or
encumbrance of which is prohibited by R.A. No. 477. While coconut trees
are permanent improvements of a land, their nuts are natural or industrial
fruits which are meant to be gathered or severed from the trees, to be used,
enjoyed, sold or otherwise disposed of by the owner of the land. Herein
respondents, as the grantee of Lot No. 21 from the Government, had the
right and prerogative to sell the coconut fruits of the trees growing on the
property.

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VOL. 111, JANUARY 30, 1982 343

Pichel vs. Alonzo

 Same; Same; Sale of produce or fruits of land acquired from the
government under RA. 477 does not violate the purpose of said law.—The
purpose of the law is not violated when a grantee sells the produce or fruits
of his land. On the contrary, the aim of the law is thereby achieved, for the
grantee is encouraged and induced to be more industrious and productive,
thus making it possible for him and his family to be economically self-
sufficient and to lead a respectable life. At the same time, the Government is
assured of payment on the annual installments on the land. We agree with
herein petitioner that it could not have been the intention of the legislature to
prohibit the grantee from selling the natural and industrial fruits of his land,
for otherwise, it would lead to an absurd situation wherein the grantee
would not be able to receive and enjoy the fruits of the property in the real
and complete sense.
Same; Same; Contracts; A contracting party cannot be allowed to
impugn the contract he has entered into by saying he can change his mind.
—Respondent through counsel, in his Answer to the Petition contends that
even granting arguendo that he executed a deed of sale of the coconut fruits,
he has the “privilege to change his mind and claim it as (an) implied lease,”
and he has the “legitimate right” to file an action for annulment “which no
law can stop.” He claims it is his “sole construction of the meaning of the
transaction that should prevail and not petitioner, (sic).” Respondent’s
counsel either mis-applies the law or is trying too hard and going too far to
defend his client’s hopeless cause. Suffice it to say that respondent-grantee,
after having received the consideration for the sale of his coconut fruits,
cannot be allowed to impugn the validity of the contracts he entered into, to
the prejudice of petitioner who contracted in good faith and for a
consideration.

PETITION to review on certiorari the decision of the Court of First

Instance of Basilan City.

The facts are stated in the opinion of the Court.

GUERRERO, J.:

This is a petition to review on certiorari the decision of the Court of

First Instance of Basilan City dated January 5, 1973 in Civil Case
No. 820 entitled “Prudencio Alonzo, plaintiff, vs. Luis Pichel,
defendant.”

344

344 SUPREME COURT REPORTS ANNOTATED

Pichel vs. Alonzo

This case originated in the lower Court as an action for the

annulment of a “Deed of Sale” dated August 14, 1968 and executed
by Prudencio Alonzo, as vendor, in favor of Luis Pichel, as vendee,
involving property awarded to the former by the Philippine
Government under Republic Act No. 477. Pertinent portions of the
document sued upon read as follows:
“That the VENDOR for and in consideration of the sum of FOUR
THOUSAND TWO HUNDRED PESOS (P4,200.00), Philippine Currency,
in hand paid by the VENDEE to the entire satisfaction of the VENDOR, the
VENDOR hereby sells, transfers, and conveys, by way of absolute sale, all
the coconut fruits of his coconut land, designated as Lot No. 21—
Subdivision Plan No. Psd-32465, situated at Balactasan Plantation, Lamitan,
Basilan City, Philippines;
“That for the herein sale of the coconut fruits are for all the fruits on the
aforementioned parcel of land presently found therein as well as for future
fruits to be produced on the said parcel of land during the years period;
which shall commence to run as of SEPTEMBER 15, 1968; up to
JANUARY 1, 1976 (sic);
“That the delivery of the subject matter of the Deed of Sale shall be from
time to time and at the expense of the VENDEE who shall do the harvesting
and gathering of the fruits;
“That the Vendor’s right, title, interest and participation herein conveyed
is of his own exclusive and absolute property, free from any liens and
encumbrances and he warrants to the Vendee good title thereto and to
1
defend the same against any and all claims of all persons whomsoever.”

After the pre-trial conference, the Court a quo issued an Order dated
November 9, 1972 which in part read thus:

“The following facts are admitted by the parties:

“Plaintiff Prudencio Alonzo was awarded by the Government that parcel
of land designated as Lot No. 21 of Subdivision Plan Psd-32465 of
Balactasan, Lamitan, Basilan City in accordance with Republic Act No.
477. The award was cancelled by the Board of Liquidators on January 27,
1965 on the ground that, previous thereto,

_______________

1 Exhibit “A”, Folder of Exhibits.

345

VOL. 111, JANUARY 30, 1982 345

Pichel vs. Alonzo

plaintiff was proved to have alienated the land to another, in violation of

law. In 1972, plaintiff’s rights to the land were reinstated.
“On August 14, 1968, plaintiff and his wife sold to defendant all the
fruits of the coconut trees which may be harvested in the land in question
for the period, September 15, 1968 to January 1, 1976, in consideration of
P4,200.00. Even as of the date of sale, however, the land was still under
lease to one, Ramon Sua, and it was the agreement that part of the
consideration of the sale, in the sum of P3,650.00, was to be paid by
defendant directly to Ramon Sua so as to release the land from the clutches
of the latter. Pending said payment plaintiff refused to allow the defendant
to make any harvest.
“In July 1972, defendant for the first time since the execution of the deed
of sale in his favor, caused the harvest of the fruit of the coconut trees in the
land.
 x x x      x x x      x x x
“Considering the foregoing, two issues appear posed by the complaint
and the answer which must needs be tested in the crucible of a trial on the
merits, and they are:
“First.—Whether or nor defendant actually paid to plaintiff the full sum
of P4,200.00 upon execution of the deed of sale.
“Second.—Is the deed of sale. Exhibit ‘A’, the prohibited encumbrance
2
contemplated in Section 8 of Republic Act No. 477?”

Anent the first issue, counsel for plaintiff Alonzo subsequently

“stipulated and agreed that his client x x x admits full payment
3
thereof by defendant.” The remaining issue being one of law, the
Court below considered the case submitted for summary judgment
on the basis of the pleadings of the parties, and the admission of
facts and documentary evidence presented at the pre-trial
conference.
The lower court rendered its decision now under review, holding
that although the agreement in question is

_______________

2 Order of the lower Court dated November 9, 1972, Original Record on Appeal,
pp. 9-10. The first issue was originally phrased thus: “Was the partial consideration of
sale in the sum of P3,650.00 paid by defendant to Ramon Sua as agreed upon by the
parties?,” but was later changed to what appears above, in an Order dated November
21, 1972, Original Record on Appeal, p. 12.
3 Decision of the lower Court dated January 5, 1973, Original Record on Appeal,
p. 16.

346

346 SUPREME COURT REPORTS ANNOTATED

Pichel vs. Alonzo

denominated by the parties as a deed of sale of fruits of the coconut

trees found in the vendor’s land, it actually is, for all legal intents
and purposes, a contract of lease of the land itself. According to the
Court:

“x x x the sale aforestated has given defendant complete control and

enjoyment of the improvements of the land. That the contract is consensual;
that its purpose is to allow the enjoyment or use of a thing; that it is onerous
because rent or price certain is stipulated; and that the enjoyment or use of
the thing certain is stipulated to be for a certain and definite period of time,
are characteristics which admit of no other conclusion, x x x The provisions
4
of the contract itself and its characteristics govern its nature.”

The Court, therefore, concluded that the deed of sale in question is

an encumbrance prohibited by Republic Act No. 477 which provides
thus:

“Sec. 8. Except in favor of the Government or any of its branches, units, or

institutions, land acquired under the provisions of this Act or any permanent
improvements thereon shall not be subject to encumbrance or alienation
from the date of the award of the land or the improvements thereon and for a
term of ten years from and after the date of issuance of the certificate of
title, nor shall they become liable to the satisfaction of any debt contracted
prior to the expiration of such period.
“Any occupant or applicant of lands under this Act who transfers
whatever rights he has acquired on said lands and/or on the improvements
thereon before the date of the award or signature of the contract of sale,
shall not be entitled to apply for another piece of agricultural land or urban,
homesite or residential lot, as the case may be, from the National Abaca and
Other Fibers Corporation; and such transfer shall be considered null and
5
void.”

_______________

4 Ibid., pp. 17-18.

5 This provision has been amended by Section 2 of Presidential Decree No. 967,
promulgated on June 24, 1976, to read as follows: “Sec. 8. Any provision of law,
executive order, rules or regulations to the contrary notwithstanding, an applicant who
has acquired land pursuant to the provisions of this Act and to whom a certificate of
title has been issued covering such land

347

VOL. 111, JANUARY 30, 1982 347

Pichel vs. Alonzo

The dispositive portion of the lower Court’s decision states:

“WHEREFORE, it is the judgment of this Court that the deed of sale,

Exhibit ‘A’, should be, as it is, hereby declared null and void; that plaintiff
be, as he is, ordered to pay back to defendant the consideration of the sale in
the sum of P4,200.00 the same to bear legal interest from the date of the
filing of the complaint until paid; that defendant shall pay to the plaintiff the
sum of P500.00 as attorney’s fees.
6
Costs against the defendant.”

Before going into the issues raised by the instant Petition, the matter
of whether, under the admitted facts of this case, the respondent had
the right or authority to execute the “Deed of Sale” in 1968, his
award over Lot No. 21 having been cancelled previously by the
Board of Liquidators on January
7
27, 1965, must be clarified. The
case in point is Ras vs. Sua wherein it was categorically stated by
this Court that a cancellation of an award granted pursuant to the
provisions of Republic Act No. 477 does not automatically divest
the awardee of his rights to the land. Such cancellation does not
result in the immediate reversion of the property subject of the
award, to the State. Speaking through Mr. Justice J.B.L. Reyes, this
Court ruled that “until and unless an appropriate proceeding for
reversion is instituted by the State, and its reacquisition of the
ownership and possession of the land decreed by a competent court,
the grantee cannot be said to have been divested
8
of whatever right
that he may have over the same property.”
There is nothing in the record to show that at any time after the
supposed cancellation of herein respondent’s award on

_______________

may sell, cede, transfer, or convey his rights and interests therein, including the
permanent improvements on the land, to any interested party.”
6 Decision of the lower Court dated January 5, 1973, Original Record on Appeal,
p. 19.
7 L-23302, September 25, 1968, 25 SCRA 153.
8 Ibid., p. 160.

348

348 SUPREME COURT REPORTS ANNOTATED

Pichel vs. Alonzo

January 27, 1965, reversion proceedings against Lot No. 21 were

instituted by the State. Instead, the admitted fact is that the award
was reinstated in 1972. Applying the doctrine announced in the
above-cited Ras case, therefore, herein respondent is not deemed to
have lost any of his rights as grantee of Lot No. 21 under Republic
Act No. 477 during the period material to the case at bar, i.e., from
the cancellation of the award in 1965 to its reinstatement in 1972.
Within said period, respondent could exercise all the rights
pertaining to a grantee with respect to Lot No. 21.
This brings Us to the issues raised by the instant Petition. In his
Brief, petitioner contends that the lower Court erred:

1. In resorting to construction and interpretation of the deed of

sale in question where the terms thereof are clear and
unambiguous and leave no doubt as to the intention of the
parties;
2. In declaring—granting without admitting that an
interpretation is necessary—the deed of sale in question to
be a contract of lease over the land itself where the
respondent himself waived and abandoned his claim that
said deed did not express the true agreement of the parties,
and on the contrary, respondent admitted at the pre-trial that
his agreement with petitioner was one of sale of the fruits of
the coconut trees on the land;
3. In deciding a question which was not in issue when it
declared the deed of sale in question to be a contract of
lease over Lot 21;
4. In declaring furthermore the deed of sale in question to be a
contract of lease over the land itself on the basis of facts
which were not proved in evidence;
5. In not holding that the deed of sale, Exhibit “A” and “2”,
expresses a valid contract of sale;
 6. In not deciding squarely and to the point the issue as to
whether or not the deed of sale in question is an
encumbrance on the land and its improvements prohibited
by Section 8 of Republic Act 477; and
7. In awarding respondent attorneys fees even granting,
without admitting, that the deed of sale in question is
violative of Section 8 of Republic Act 477.

The first five assigned errors are interrelated, hence, We shall

consider them together. To begin with, We agree with

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VOL. 111, JANUARY 30, 1982 349

Pichel vs. Alonzo

petitioner that construction or interpretation of the document in

question is not called for. A perusal of the deed fails to disclose any
ambiguity or obscurity in its provisions, nor is there doubt as to the
real intention of the contracting parties. The terms of the agreement
are clear and unequivocal, hence the literal and plain meaning
thereof should be observed. Such is the mandate of the Civil Code of
the Philippines which provides that:

“Art. 1370. If the terms of a contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of its stipulation shall
control, x x x.”

Pursuant to the afore-quoted legal provision, the first and

fundamental duty of the courts is the application of the contract
according to its express terms, interpretation
9
being resorted to only
when such literal application is impossible.
Simply and directly stated, the “Deed of Sale dated August 14,
1968 is precisely what it purports to be. It is a document evidencing
the agreement of herein parties for the sale of coconut fruits of Lot
No. 21. and not for the lease of the land itself as found by the lower
Court. In clear and express terms, the document defines the object of
the contract thus: “the herein sale of the coconut fruits are for all the
fruits on the aforementioned parcel of land during the years x x x
(from) SEPTEMBER 15, 1968; up to JANUARY 1, 1976.”
Moreover, as petitioner correctly asserts, the document in question
expresses a valid contract of sale. It has the essential elements of a
contract of sale as defined under Article 1485 of the New Civil Code
which provides thus:

“Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing, and
the other to pay therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional.”

_______________
 9 See Pacific Oxygen and Acetylene Co. vs. Central Bank, L-21881, March 1,
1968, 22 SCRA 917, 921.

350

350 SUPREME COURT REPORTS ANNOTATED

Pichel vs. Alonzo

The subject matter of the contract of sale in question are the fruits of
the coconut trees on the land during the years from September 15,
1968 up to January 1, 1976, which subject matter is a determinate
thing. Under Article 1461 of the New Civil Code, things having a
potential existence may be the object of the contract of sale. And in
Sibal vs. Valdez, 50 Phil. 512, pending crops which have potential
existence may be the subject matter of sale. Here, the Supreme
Court, citing Mechem on Sales and American cases said:

“Mr. Mechem says that a valid sale may be made of a thing, which though
not yet actually in existence, is reasonably certain to come into existence as
the natural increment or usual incident of something already in existence,
and then belonging to the vendor, and the title will vest in the buyer the
moment the thing comes into existence. (Emerson vs. European Railway
Co., 67 Me., 387; Cutting vs. Packers Exchange, 21 Am. St. Rep. 63)
Things of this nature are said to have a potential existence. A man may sell
property of which he is potentially and not actually possessed. He may make
a valid sale of the wine that a vineyard is expected to produce; or the grain a
field may grow in a given time; or the milk a cow may yield during the
coming year; or the wool that shall thereafter grow upon sheep; or what may
be taken at the next case of a fisherman’s net; or fruits to grow; or young
animals not yet in existence; or the good will of a trade and the like. The
thing sold, however, must be specific and identified. They must be also
owned at the time by the vendor. (Hull vs. Hull, 48 Conn., 250 (40 Am.
Rep., 165)” (pp. 522-523).

We do not agree with the trial court that the contract executed by and
between the parties is “actually a contract of lease of the land and
the coconut trees there.” (CFI Decision, p. 62, Records). The Court’s
holding that the contract in question fits the definition of a lease of
things wherein one of the parties binds himself to give to another the
enjoyment or use of a thing for a price certain and for a period which
may be definite or indefinite (Art. 1643, Civil Code of the
Philippines) is erroneous. The essential difference between a
contract of sale and a lease of things is that the delivery of the thing
sold transfers ownership, while in lease no such transfer of
ownership results as the rights of the lessee are limited to the use
and enjoyment of the thing leased.

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Pichel vs. Alonzo
In Rodriguez vs. Borromeo, 43 Phil. 479, 490, the Supreme Court
held:

“Since according to article 1543 of the same Code the contract of lease is
defined as the giving or the concession of the enjoyment or use of a thing for
a specified time and fixed price, and since such contract is a form of
enjoyment of the property, it is evident that it must be regarded as one of the
means of enjoyment referred to in said article 398, inasmuch as the terms
enjoyment, use, and benefit involve the same and analogous meaning
relative to the general utility of which a given thing is capable.” (104
Jurisprudencia Civil, 443)

In concluding that the possession and enjoyment of the coconut trees

can therefore be said to be the possession and enjoyment of the land
itself because the defendant-lessee in order to enjoy his right under
the contract, he actually takes possession of the land, at least during
harvest time, gather all of the fruits of the coconut trees in the land,
and gain exclusive use thereof without the interference or
intervention of the plaintiff-lessor such that said plaintiff-lessor is
excluded in fact from the land during the period aforesaid, the trial
court erred. The contract was clearly a “sale of the coconut fruits.”
The vendor sold, transferred and conveyed “by way of absolute sale,
all the coconut fruits of his land,” thereby divesting himself of all
ownership or dominion over the fruits during the seven-year period.
The possession and enjoyment of the coconut trees cannot be said to
be the possession and enjoyment of the land itself because these
rights are distinct and separate from each other, the first pertaining to
the accessory or improvements (coconut trees) while the second, to
the principal (the land). A transfer of the accessory or improvement
is not a transfer of the principal. It is the other way around, the
accessory follows the principal. Hence, the sale of the nuts cannot be
interpreted nor construed to be a lease of the trees, much less
extended further to include the lease of the land itself.
The real and pivotal issue of this case which is taken up in
petitioner’s sixth assignment of error and as already stated above,
refers to the validity of the “Deed of Sale”, as such contract of sale,
vis-a-vis the provisions of Sec. 8, R.A. No. 477. The lower Court did
not rule on this question, having reached

352

352 SUPREME COURT REPORTS ANNOTATED

Pichel vs. Alonzo

the conclusion that the contract at bar was one of lease. It was from
the context of a lease contract that the Court below determined the
applicability of Sec. 8, R.A. No. 477, to the instant case.
Resolving now this principal issue, We find after a close and
careful examination of the terms of the first paragraph of Section 8
hereinabove quoted, that the grantee of a parcel of land under R.A.
No. 477 is not prohibited from alienating or disposing of the natural
and/or industrial fruits of the land awarded to him. What the law
expressly disallows is the encumbrance or alienation of the land
itself or any of the permanent improvements thereon. Permanent
improvements on a parcel of land are things incorporated or attached
to the property in a fixed manner, naturally or artificially. They
include whatever is built, planted or sown on the land which is
characterized by fixity, immutability or immovability. Houses,
buildings, machinery, animal houses, trees and plants would fall
under the category of permanent improvements, the alienation or
encumbrance of which is prohibited by R.A. No. 477. While coconut
trees are permanent improvements of a land, their nuts are natural or
industrial fruits which are meant to be gathered or severed from the
trees, to be used, enjoyed, sold or otherwise disposed of by the
owner of the land. Herein respondents, as the grantee of Lot No. 21
from the Government, had the right and prerogative to sell the
coconut fruits of the trees growing on the property.
By virtue of R.A. No. 477, bona fide occupants, veterans,
members of guerilla organizations and other qualified persons were
given the opportunity to acquire government lands by purchase,
taking into account their limited means. It was intended for these
persons to make good and productive use of the lands awarded to
them, not only to enable them to improve their standard of living,
but likewise to help provide for the annual payments to the
Government of the purchase price of the lots awarded to them.
Section 8 was included, as stated by the Court a quo, to protect the
grantees “from themselves and the incursions of opportunists who
prey on their misery and poverty.” It is there to insure that the
grantees themselves benefit from their respective lots, to the
exclusion of other persons.

353

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Pichel vs. Alonzo

The purpose of the law is not violated when a grantee sells the
produce or fruits of his land. On the contrary, the aim of the law is
thereby achieved, for the grantee is encouraged and induced to be
more industrious and productive, thus making it possible for him
and his family to be economically self-sufficient and to lead a
respectable life. At the same time, the Government is assured of
payment on the annual installments on the land. We agree with
herein petitioner that it could not have been the intention of the
legislature to prohibit the grantee from selling the natural and
industrial fruits of his land, for otherwise, it would lead to an absurd
situation wherein the grantee would not be able to receive and enjoy
the fruits of the property in the real and complete sense.
Respondent through counsel, in his Answer to the Petition
contends that even granting arguendo that he executed a deed of sale
of the coconut fruits, he has the “privilege to change his mind and
claim it as (an) implied lease,” and he has the “legitimate right” to
file an action for annulment “which no law can stop.” He claims it is
his “sole construction of the meaning of the transaction that should
 10
prevail and not petitioner. (sic).” Respondent’s counsel either mis-
applies the law or is trying too hard and going too far to defend his
client’s hopeless cause. Suffice it to say that respondent-grantee,
after having received the consideration for the sale of his coconut
fruits, cannot be allowed to impugn the validity of the contracts he
entered into, to the prejudice of petitioner who contracted in good
faith and for a consideration.
The issue raised by the seventh assignment of error as to the
propriety of the award of attorney’s fees made by the lower Court
need not be passed upon, such award having been apparently based
on the erroneous finding and conclusion that the contract at bar is
one of lease. We shall limit Ourselves to the question of whether or
not in accordance with Our ruling in this case, respondent is entitled
to an award of attorney’s fees. The Civil Code provides that:

_______________

10 Respondent’s Answer to Petition for Review, p. 5; Rollo, p. 74.

354

354 SUPREME COURT REPORTS ANNOTATED

Pichel vs. Alonzo

“Art. 2208. In the absence of stipulation, attorney’s fees and expenses of

litigation, other than judicial costs, cannot be recovered, except:

(1) When exemplary damages are awarded;

(2) When the defendant’s act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his
interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the
plaintiff;
(5) Where the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiff’s plainly valid, just and demandable
claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers
and skilled workers;
(8) In actions for indemnity under workmen’s compensation and
employer’s liability laws;
(9) In a separate civil action to recover civil liability arising from a
crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that
attorney’s fees and expenses of litigation should be recovered.

In all cases, the attorney’s fees and expenses of litigation must be

reasonable.”
We find that none of the legal grounds enumerated above exists to
justify or warrant the grant of attorney’s fees to herein respondent.
IN VIEW OF THE FOREGOING, the judgment of the lower
Court is hereby set aside and another one is entered dismissing the
Complaint. Without costs.
SO ORDERED.

          Teehankee (Chairman), Makasiar, Fernandez, Melencio-

Herrera and Plana, JJ., concur.

355

VOL. 111, JANUARY 30, 1982 355

Pichel vs. Alonzo

Judgment set aside.

Notes.—The limitations provided for by Section 118 of the

Public Land Act applies whether disposition of rights is made before
or after the issuance of the free patent. (Gonzaga vs. Court of
Appeals, 51 SCRA 381.)
Right to acquire public lands presupposes compliance with the
requirements of the Public Land Act. (Piñero vs. Dir. of Lands, 57
SCRA 386.)
The government may bring an action for the reversion of public
land fraudulently acquired. (Piñero, Jr. vs. Dir. of Lands, 57 SCRA
386.)
The Court may review the decision of the Director of Lands only
in a direct proceeding therefor and not collaterally. (Firmalo vs.
Tutaan, 53 SCRA 505.)
Titles issued over non-alienable public lands are void ab initio.
Mere inadequacy of price does not vitiate a contract of sale.
(Alsua-Betts vs. Court of Appeals, 92 SCRA 332.)
A contract of sale is void where the price which appears as paid
has in fact never been paid by the purchaser to the vendor and not
considered consummated. (Castillo vs. Galvan, 85 SCRA 526.)
A contract of sale which stipulate payment of interest at 4% per
annum in case vendor fails to issue a certificate of title to vendee is
not a penal clause because even without it vendee would be entitled
to interest at the legal rate of 6% per annum. (Robes-Francisco
Realty & Development Corporation vs. Court of First Instance of
Rizal, 86 SCRA 59.)
A contract of sale is perfected the moment there is agreemerit
upon the thing object of the contract and upon the price. (Philippine
Virginia Tobacco Administration vs. De los Angeles, 87 SCRA 197.)
Vendee who neglected to register the sale of property to him but
in good faith first took possession of the land had better right over
the property under Article 1594 of the Civil Code. (Salvoro vs.
Tañega, 87 SCRA 359.)

356
 356 SUPREME COURT REPORTS ANNOTATED
Vda. de Bogacki vs. Inserto

Purchaser should examine the certificate of title and all factual

circumstances necessary for him to determine whether or not flows
exist which might invalidate said title. (Barrios vs. Court of Appeals,
78 SCRA 427.)

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