LCP

SUBJECT: Obligations and Contracts

TOPIC: Void Contracts; Illegal Causa or Consideration

LIGUEZ vs. CA
No. L-11240 | December 18, 1957 | Reyes, JBL

FACTS
 Conchita Liguez filed a complaint against the widow and heirs of Salvador Lopez to recover a parcel
of 51.84 hectares of land in Davao. She averred to be its legal owner, pursuant to a deed of
donation executed in her favor by Salvador on May 18, 1943.
 At the time the deed was executed, Conchita was 16. She had also been living with Salvador’s
parents for barely a month. The deed of donation recites that the donor Salvador, “for and in
consideration of his love and affection” for Conchita, and “also for the good and valuable services
rendered to Salvador by Conchita, does by these presents, voluntarily give, grant and donate to
Conchita…”
 Also, it was found out that the donation was made in view of the desire of Lopez to have sexual
relations with Liguez and that her parents would not allow him to live with her unless he first donated
the land in question. After the donation, the two lived together until Lopez was killed on July 1,
1943.
 However, it was also ascertained by the CA that the donated land originally belonged to the
conjugal partnership of Lopez and his wife Maria Ngo. Ngo and the children were in possession of
the land and made improvements thereon. The land was assessed in the tax rolls first in the name
of Lopez and later in that of his widow; and that the deed of donation as never recorded.
 So the CA held that the deed was inoperative because;
o Lopez had no right to donate conjugal property; and
o The donation was tainted with illegal causa or consideration

ISSUE
Whether the deed of donation was tainted with illegal cause or consideration? YES

RULING
Under Article 1274 of the Civil Code of 1889 (which was the governing law in 1943, when the donation was
executed), "in contracts of pure beneficence, the consideration is the liberality of the donor."

Under Article 1274, liberality of the donor is deemed causa only in those contracts that are of "pure"
beneficence; that is to say, contracts designed solely and exclusively to procure the welfare of the
beneficiary, without any intent of producing any satisfaction for the donor; 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 Article
1274 provides that in remuneratory contracts, the consideration is the service or benefit for which the
remuneration is given; causa is not liberality in these cases because the contract or conveyance is not
made out of pure beneficence, but “solvendi animo.” [THIS IS THE GENERAL DOCTRINE]

It cannot therefore be said that it was a contract out of pure beneficence because the donation was partly
an onerous transaction as the parents of Liguez required the donation so that Lopez and Liguez would live
together. Thus considered, the conveyance of the land from Lopez to Liguez was clearly predicated upon
an illicit cause.

In addition, there is no pari delicto in this case as embodied in Article 1306 of the 1889 Code (reproduced
in Article 1412 of the NCC). It cannot be said that both parties had equal guilt. Salvador was a man
advanced in years and mature experience, and Conchita was only 16 when the donation was made. Her
acceptance of the deed does not imply knowledge of conditions and terms not set forth therein. Witnesses
testified that it was Conchita’s parents who insisted on the donation. The rule that parties to an illegal
contract, if equally guilty, will not be aided by the law but will both be left where it finds them, has been
interpreted by this Court as barring the party from pleading the illegality of the bargain either as a cause of
action or as a defense. But where the plaintiff can establish a cause of action without exposing its illegality,
the vice does not affect the right to recover.

RELEVANT LAWS APPLICABLE

Article 1274 [1889 Spanish Civil Code]

In onerous contracts, the prestation or promise of a thing or services by the other party is understood as a
consideration for each contracting party; in remuneratory ones, the services or benefits remunerated, and
in those of pure beneficence, the mere liberality of the benefactor.

Article 1306 [1889 Spanish Civil Code] counterpart to Article 1412 of the NCC
If the fact of which the illicit consideration consists does not constitute either a crime or fault, the following
rules shall be observed:

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Obligations and Contracts
Liguez vs. CA by Divina
 LCP

1. When both parties are culpable, neither of them can recover what he has given by virtue of the contract,
nor claim the fulfillment of what the other party has offered.

2. When only one of the contracting parties is culpable, this one shall not recover what he has given by
virtue of the contract, nor ask for the fulfillment of what has been offered to him. The other party, who has
had nothing to do with the illicit consideration, may claim what he has given, without being obliged to
comply with what he has offered.

Article 1412 of the NCC counterpart to Article 1306 [1889 Spanish Civil Code]
If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, the
following rules shall be observed:

(1) When the fault is on the part of both contracting parties, neither may recover what he has given by virtue
of the contract, or demand the performance of the other’s undertaking;

(2) When only one of the contracting parties is at fault, he cannot recover what he has given by reason of
the contract, or ask for the fulfillment of what has been promised him. The other, who is not at fault, may
demand the return of what he has given without any obligation to comply with his promise. (1306)

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Obligations and Contracts
Liguez vs. CA by Divina