GR No.

127540, October 17, 2001

Facts:

Paulina Rigonan owned three (3) parcels of land, including the house and warehouse on one
parcel. She allegedly sold them to private respondents, the spouses Felipe and Concepcion
Rigonan, who claim to be her relatives.

In 1966, herein petitioners Eugenio Domingo, Crispin Mangabat and Samuel Capalungan, who
claim to be her closest surviving relatives, allegedly took possession of the properties by means
of stealth, force and intimidation, and refused to vacate the same.

Consequently, herein respondent Felipe Rigonan filed a complaint for reinvindicacion alleging
that they were the owners of the three parcels of land through the deed of sale executed by
Paulina Rigonan on January 28, 1965; that since then, they had been in continuous
possession of the subject properties and had introduced permanent improvements thereon.

Zosima Domingo testified that her husband, Eugenio Domingo, was Paulina's nephew. Paulina
was a first cousin of Eugenio's father. She also said that they lived with Paulina and her
husband, Jose Guerson, since 1956. They took care of her, spent for her daily needs and
medical expenses, especially when she was hospitalized prior to her death. She stated that
Paulina was never badly in need of money during her lifetime.

Domingo also asserts that at the time of the execution of the alleged contract, Paulina Rigonan
was already of advanced age and senile. That Paulina was already incapacitated physically and
mentally. She narrated that Paulina played with her waste and urinated in bed. She died an
octogenarian on March 20, 1966, barely over a year when the deed was allegedly executed on
January 28, 1965, but before copies of the deed were entered in the registry allegedly on May
16 and June 10, 1966.

Issue:

Whether or not the deed of sale executed in favor of Felipe is void.

Ruling:

Yes,

The general rule is that a person is not incompetent to contract merely because of advanced
years or by reason of physical infirmities. However, when such age or infirmities have impaired
the mental faculties so as to prevent the person from properly, intelligently and firmly
protecting her property rights then she is undeniably incapacitated.

Given these circumstances, there is in our view sufficient reason to seriously doubt that she
consented to the sale of and the price for her parcels of land. Moreover, there is no receipt to
show that said price was paid to and received by her.

The whole evidence on record does not show clearly that the fictitious P850.00 consideration
was ever delivered to the vendor. Undisputably, the P850.00 consideration for the nine (9)
parcels of land including the house and bodega is grossly and shockingly inadequate, and the
sale is null and void ab initio.
Ching v. Goyanko

Facts:

Joseph Goyanko and Epifania dela Cruz were married. During the marriage, they acquire a
certain property in Cebu. In 1993, Joseph executed a deed of sale over the property in favor of
his common-law-wife Maria B. Ching. After Joseph's death, his children with Epifania
discovered the sale. They thus filed with the Regional Trial Court of Cebu City a complaint for
recovery of property and damages against Ching, praying for the nullification of the deed of sale
and of the TCT and the issuance of a new one in favor of their father Goyanko.

Issue: 

Was the sale made by Joseph Goyanko in favor of his common-law wife valid?

Held: 

No. The proscription against sale of property between spouses applies even to common law
relationships.

Article 1409 of the Civil Code states that: contracts whose cause, object, or purposes is
contrary to law, morals, good customs, public order, or public policy are void and inexistent
from the very beginning.

The sale was made by a husband in favor of a concubine after he had abandoned his family
and left the conjugal home where his wife and children lived and from where they derived their
support.

The law emphatically prohibits the spouses from selling property to each other subject to
certain exceptions. Similarly, donations between spouses during marriage are prohibited. And
this is so because if transfers or conveyances between spouses were allowed during marriage,
that would destroy the system of conjugal partnership, a basic policy in civil law. It was also
designed to prevent the exercise of undue influence by one spouse over the other, as well as to
protect the institution of marriage, which is the cornerstone of family law. The
prohibitions apply to a couple living as husband and wife without benefit of marriage,
otherwise, “the condition of those who incurred guilt would turn out to be better than those in
legal union.”
Cruz v. Court of Appeals G.R. 120122

Facts:

Gloria R. Cruz was the owner of Lot 10 with an area of 747.7 square meters situated at Quezon
City. She and respondent Romeo V. Suzara lived together as husband and wife without benefit
of marriage; in September 1982, solely out of love and affection for Suzara, she executed a deed
of absolute sale over Lot 10 in favor of Suzara without any monetary consideration.

Suzara registered the document in his favor and used the property as collateral for a bank
loan. He however failed to pay the loan so that the mortgage was foreclosed. However, without
her knowledge and before the expiration of the extended period, Suzara redeemed the property.
She tried to talk to him but he avoided her. Finally, to protect her interest, she executed an
Affidavit of Adverse Claim which she filed with the Register the Deeds.

However, the Register of Deeds filed a manifestation informing the trial court that the property
had been sold by respondent Suzara to his co-respondent Vizconde who was already the
registered owner.

Cruz asserts that her sale in favor of Suzara was null and void for lack of consideration and
being contrary to law and public policy.

Issue:

Whether Cruz can recover the subject property.

Held:

No, there is no doubt that respondent Vizconde was a purchaser for value in good faith and
that when he bought the property he had no knowledge that some other person had a right to
or an adverse interest in the property. Vizconde paid a full and fair price for the property at the
time of the purchase and before he had any notice of petitioner's claim or interest in the
property.

A contract of sale is consensual and is perfected once agreement is reached between the parties
on the subject matter and the consideration therefor.
Calimlim-Canullas v. Fortun G.R. 57499

Facts:

Petitioner Mercedes Calimlim-Canullas and Fernando Canullas were married in 1962, with 5
children, and were living on a house situated on a land inherited by the latter. In 1978,
Fernando abandoned his family and lived with Corazon Daguines. In 1980, Fernando sold the
house and lot to Daguines, who initiated a complaint for quieting of title. Mercedes resisted,
claiming that the house and lot were conjugal properties, and the sale was null andd void for
she had not consented thereto.

Issue:

Whether or not the sale is null and void.

Held:

Article 1409 of the Civil Code states that: contracts whose cause, object, or purpose is contrary
to law, morals, good customs, public order, or public policy are void and inexistent from the
very beginning.

The contract of sale was null and void for being contrary to morals and public policy. The sale
was made by a husband in favor of a concubine after he had abandoned his family and left the
conjugal home where his wife and children lived and from whence they derived their support.
That sale was subversive of the stability of the family, a basic social institution which public
policy cherishes and protects. 
THE PHILIPPINE TRUST COMPANY, AS GUARDIAN OF THE PROPERTY OF THE MINOR,
MARIANO L. BERNARDO, PETITIONER, VS. SOCORRO ROLDAN, FRANCISCO HERMOSO,
FIDEL C. RAMOS AND EMILIO CRUZ, RESPONDENTS. [ G.R. No. L-8477, May 31, 1956 ]

FACTS:

Mariano L Bernardo, a minor, inherited from his father, Marcelo Bernardo 17 parcels of land
located in Guiguinto, Bulacan. In view of his minority, guardianship proceedings were
instituted, where Socorro Roland, surviving spouse of Marcelo and step-mother of Mariano,
was appointed as guardian of the latter.

Socorro filed a motion asking authority to sell as guardian the 17 parcels for the sum of
P14,700 to his brother-in-law, Dr. Fidel C. Ramos, the purpose of the sale being allegedly to
invest money in a residential house, which the minor desired to have on Manila. The motion
was granted. Socorro, as guardian, then executed the proper deed of sale in favor of Fidel
Ramos and she asked for and obtained judicial confirmation of the sale.

However, on August 13, 1947, Fidel Ramos executed in favor of Socorro personally, a deed of
conveyance covering the same parcels. Socorro sold 4 out of the 17 parcels to Emilio Cruz for
P3,000, reserving herself the right to repurchase. Phil. Trust Co. replaced Socorro as guardian.
Petitioner filed a complaint to annul two contracts regarding the 17 parcels of land: a) the sale
thereof by Socorro, as guardian, to Fidel Ramos; and b) sale thereof by Fidel Ramos to Socorro
personally.

Petitioner contends that the step-mother in effect, sold to herself, the properties of her ward
thus should be annulled as it violates Art. 1459 of the Civil Code prohibiting the guardian from
purchasing “either in person or through the mediation of another” the property of her ward.

ISSUE:

Whether the two contracts of sale made by Socorro was valid.

HELD:

No. The court held that even without proof that Socorro had connived with Fidel Ramos.
Remembering the general doctrine that guardianship is a trust of the highest order, and the
trustee cannot be allowed to have any inducement to neglect his ward's interest and in line
with the court's suspicion whenever the guardian acquires the ward's property we have no
hesitation to declare that in this case, in the eyes of the law, Socorro Roldan took by purchase
her ward's parcels thru Dr. Ramos, and that Article 1459 of the Civil Code applies.

The temptation which naturally besets a guardian so circumstanced, necessitates the

annulment of the transaction, even if no actual collusion is proved (so hard to prove) between
such guardian and the intermediate purchaser. This would uphold a sound principle of equity
and justice. From both the legal and equitable standpoints these three sales should not be
sustained: the first two for violation of article 1459 of the Civil Code.
Macariola v. Asuncion, A.M. No. 133-J

FACTS:

On August 6, 1968 Bernardita R. Macariola charged respondent Judge Elias B. Asuncion of the
Court of First Instance of Leyte, with “acts unbecoming a judge when the latter purchased a
property which was previously the subject of litigation on which he rendered decision.
Respondent and his wife were also members of Traders Manufacturing and Fishing Industries
Inc. to which their shares and interests in said property were conveyed.

According to the petitioner, respondent allegedly violated Article 1491, par. 5, of the New Civil
Code in acquiring by purchase a portion of Lot No. 1184-E which was one of those properties
involved in in a case decided by him and that he likewise violated Article 14, par. 1 and 5 of the
Code of Commerce, Section 3, par. H, of R.A. 3019, Sec. 12, Rule XVIII of the Civil Service
Rules, and Canon 25 of the Canons of Judicial Ethics, by associating himself with the Traders
Manufacturing and Fishing Industries, Inc., as a stockholder and a ranking officer while he
was a judge of the Court of First Instance of Leyte.

ISSUE:

Whether or not respondent Judge violated Article 1491, paragraph 5, of the New Civil Code in
acquiring by purchase a portion of Lot No. 1184-E.

RULING:

No, the court find that there is no merit in the contention of complainant that respondent
Judge Elias B. Asuncion violated Article 1491, paragraph 5, of the New Civil Code in acquiring
by purchase a portion of Lot No. 1184-E which was one of those properties involved in Civil
Case No. 3010.

The prohibition in the aforesaid Article applies only to the sale or assignment of the property
which is the subject of litigation to the persons disqualified therein. In the case at bar, when
the respondent Judge purchased on March 6, 1965 a portion of Lot 1184-E, the decision in
which he rendered on June 8, 1963  was already final because none of the parties therein filed
an appeal; hence, the lot in question was no longer subject of the litigation.

Finally, while it is true that respondent Judge did not violate paragraph 5, Article 1491 of the
New Civil Code in acquiring by purchase a portion of Lot 1184-E which was in litigation in his
court, it was, however, improper for him to have acquired the same. He should be reminded of
Canon 3 of the Canons of Judicial Ethics which requires that: “A judge’s official conduct
should be free from the appearance of impropriety, and his personal behavior, not only upon
the bench and in the performance of judicial duties, but also in his everyday life, should be
beyond reproach.”
Cadavedo v. Lacaya

Facts:

Spouses Cadavedo hired Atty. Lacaya on a contingency basis. It was stated in their written
agreement that Spouses Cadavedo shall pay P 2000 to Atty. Lacaya should the case be decided
in their favor. The case was instituted in order for the spouses to recover their land. The case
was decided in favor of the petitioners.

Atty Lacaya alleged that they had an oral agreement wherein the spouses shall be obligated to
convey 1/2 of the subject lot to Atty. Lacaya should the case be decided in their favor. Hence,
he asserts that he is entitled to 1/2 of the subject land.

Issue:

Whether the ½ of the subject land agreement is proper.

Held:

No,

The contingent fee agreement between the spouses Cadavedo and Atty. Lacaya, awarding the
latter one-half of the subject lot, is champertous.

Atty. Lacaya’s acquisition and possession of the disputed one-half portion which were made in
violation of Article 1491 (5) of the Civil Code.

A contract whose cause, object or purpose is contrary to law, morals, good customs, public
order or public policy is inexistent and void from the beginning. It can never be ratified nor the
action or defense for the declaration of the inexistence of the contract prescribes; and any
contract directly resulting from such illegal contract is likewise void and inexistent.

Atty. Lacaya is entitled to receive attorney’s fees on a quantum meruit basis.

Quantum meruit — meaning ‘as much as he deserves’ — is used as basis for determining a
lawyer’s professional fees in the absence of a contract taking into account certain factors in
fixing the amount of legal fees.
Donton v. Stier

Facts:

The subject matter of this case is a parcel of land under the name of Donton.

Sometime in June 2001, while Donton was in the United States, he discovered that herein
respondents took possession and control of the subject property, as well as the management of
his business operating thereat.

Respondents claimed that the subject property had been lawfully transferred to them, asserting
that Donton executed an Occupancy Agreement whereby he acknowledged that Stier had been
residing thereat since January 5, 1995; that Stier had extended a loan to him in the amount of
P3,000,000.00 secured by a mortgage over the subject property and its improvements; and that
until full payment thereof, Donton allowed Stier to occupy the same.

Respondents likewise claimed that Donton executed a Special Power of Attorney in favor of
Stier, giving him full authority to sell, mortgage, or lease the subject property.

Donton averts that Stier is an American citizen and such is prohibited by the Constitution of
acquiring property. He also presented the findings of PNP crime laboratory stating that the
signature on the Deed of Absolute sale in favor of Stier was indeed not his signature.

Issue:

Whether the questioned contract is void.

Held:

Yes, even if petitioners failed to prove that Donton's signature on the Deed of Absolute Sale was
a forgery, the sale of the subject property to Stier is in violation of the Constitution; hence, null
and void ab initio.

A contract that violates the Constitution and the law is null and void and vests no rights and
creates no obligations. It produces no legal effect at all. Furthermore, Stier is barred from
recovering any amount that he paid for the subject property, the action being proscribed by the
Constitution.
Frenzel v. Catito G.R. No. L-24732

Facts:

Petitioner Alfred Fritz Frenzel is an Australian citizen of German descent. He was so enamored
with Ederlina that he bought her numerous properties such as house and lot in Quezon City
and in Davao City. He also put up a beauty parlor business in the name of Ederlina. Alfred was
unaware that Ederlina was married until her spouse Klaus Muller wrote a letter to Alfred
begging the latter to leave her wife alone.

When Alfred and Ederlinas relationship started deteriorating. Ederlina had not been able to
secure a divorce from Klaus. The latter could charge her for bigamy and could even involve
Alfred, who himself was still married. To avoid complications, Alfred decided to live separately
from Ederlina and cut off all contacts with her.

On October 15, 1985, Alfred wrote to Ederlinas father, complaining that Ederlina had taken all
his life savings and because of this, he was virtually penniless. He further accused the Catito
family of acquiring for themselves the properties he had purchased with his own money. He
demanded the return of all the amounts that Ederlina and her family had stolen and turn over
all the properties acquired by him and Ederlina during their coverture.

ISSUE:
Whether the petitioner could recover the money used in purchasing the several properties

HELD:

No, even if, as claimed by the petitioner, the sales in question were entered into by him as the
real vendee, the said transactions are in violation of the Constitution; hence, are null and
void ab initio. A contract that violates the Constitution and the law, is null and void and vests
no rights and creates no obligations. It produces no legal effect at all. The petitioner, being a
party to an illegal contract, cannot come into a court of law and ask to have his illegal objective
carried out. One who loses his money or property by knowingly engaging in a contract or
transaction which involves his own moral turpitude may not maintain an action for his losses.
To him who moves in deliberation and premeditation, the law is unyielding.  The law will not
aid either party to an illegal contract or agreement; it leaves the parties where it finds them.
Naranja vs. Court of Appeals G.R. 160132

Facts:

Roque, who was single and had no children, to show his gratitude with his half-sister Belardo
whom he lived with, Roque sold Lot No. 4 and his one-third share in Lot No. 2 to Belardo
through a Deed of Sale of Real Property which was duly notarized but the deed of sale could
not be registered because Belardo did not have the money to pay for the registration fees.

After Roque’s death, petitioners, the children of Placido and Gabino Naranja, Roque’s siblings
executed an Extrajudicial Settlement Among Heirs adjudicating among themselves Lot no. 4
and succeeded to have it titled before them.

Belardo seeks for the reconveyance of the property and prayed to declare the extrajudicial
settlement null and void.

Petitioner contends that a deed of sale must contain a technical description of the subject
property in order to be valid citing Section 127 of Act No. 496, which provides a sample form of
a deed of sale that includes, in particular, a technical description of the subject property.

Issue:

Whether the deed of sale is void on the grounds of absence of technical description in the
subject matter.

Held:

No, a contract of sale need not contain a technical description of the subject property.
Contracts of sale of real property have no prescribed form for their validity; they follow the
general rule on contracts that they may be entered into in whatever form, provided all the
essential requisites for their validity are present.22 The requisites of a valid contract of sale
under Article 1458 of the Civil Code are: (1) consent or meeting of the minds; (2) determinate
subject matter; and (3) price certain in money or its equivalent.

What is important is that there is, in fact, an object that is determinate or at least
determinable, as subject of the contract of sale. The form of a deed of sale provided in Section
127 of Act No. 496 is only a suggested form. It is not a mandatory form that must be strictly
followed by the parties to a contract.

In the instant case, the deed of sale clearly identifies the subject properties by indicating their
respective lot numbers, lot areas, and the certificate of title covering them. Resort can always
be made to the technical description as stated in the certificates of title covering the two
properties.
Johannes Schuback & Sons vs. Court of Appeals, G.R. No. 105387, November 11, 1993

Facts:

Defendant wanted to purchase MAN bus spare parts from Germany. Plaintiff communicated
with its trading partner. Johannes Schuback and Sohne regarding the spare parts defendant
wanted to order.

Defendant submitted to plaintiff a list of the parts he wanted to purchase with specific part
numbers and description.

Plaintiff submitted its formal offer containing the item number, quantity, part number,
description, unit price and total to defendant. 

On 24 December 1981, the buyer confirmed to purchase on the indicated prices and in fact
issued a purchase order which, however, did not contain the quantities per unit but the buyer
merely bound itself to submit the quantities about a week thereafter, as in fact the quantities
were confirmed latter on 29 December 1981.

Defendant experienced trouble in securing the letter of credit to proceed with the orders
resulting to the petitioner to file for cancellation fees, damages, and collection of unearned
profits.

Defendant avers that there was no perfection of contract since there was no meeting of the
minds as to the price considering the quantity was made determinate only after a week.

Issue:

Whether the contract is void for lack of quantity in the subject matter.

Held:

No, although the quantity to be ordered was made determinate only on December 29, 1981,
quantity is immaterial in the perfection of a sales contract. What is of importance is the
meeting of the minds as to the object and cause, which from the facts disclosed, show that as
of December 24, 1981, these essential elements had already occurred.
Atilano vs. Atilano, G.R. No. L-22487, May 21, 1969

Facts:

Eulogio Atilano I acquired, by purchase lot No. 535 of the then municipality of Zamboanga
cadastre. The vendee thereafter had the land subdivided into five parts, identified as lots Nos.
535-A, 535-B, 535-C, 535-D and 535-E, respectively.

Eulogio Atilano I, for the sum of P150.00, executed a deed of sale covering lot No. 535-E in
favor of his brother Eulogio Atilano II, who thereupon obtained transfer certificate of title in his
name.

Eulogio Atilano II having become a widower, he and his children obtained title over lot No. 535-
E in their names as co-owners. Then, on July 16, 1959, desiring to put an end to the co-
ownership, they had the land resurveyed so that it could properly be subdivided; and it was
then discovered that the land they were actually occupying on the strength of the deed of sale
executed in 1920 was lot No. 535-A and not lot 535-E, as referred to in the deed, while the land
which remained in the possession of the vendor, Eulogio Atilano I, and which passed to his
successor, defendant Ladislao Atilano, was lot No. 535-E and not lot No. 535-A.

The brother’s heirs filed an action in court seeking possession of the real lot 535-E, which had
a bigger lot area.

Issue:

Whether the brothers can demand possession of the real Lot 535-E.

Held:

The Court held that the object of the sale was actually lot 535-A, although the deed of sale
referred to lot 535-E, because there was only a mistake in designating the particular lot to be
sold in the instrument, which mistake was deemed pro forma and did not vitiate the consent of
the parties or affect the validity and binding effect of the sale. The Court reasoned that when
one seeks to sell or buy a real property, one sells or buys the property as he sees it in its actual
setting and by its physical metes and bounds, and not by the mere lot number assigned to it in
the certificate of title. It was clear that when the brothers entered into a contract, they were
referring to lot 535-A because even before that, the purchasing brother had been occupying
said lot as his residence.

The deed of sale is merely an evidence of the contract. And when the deed fails to cover the real
contract or the true meeting of the minds of the parties, then the deed must give way to the
real contract of the parties. The defect in the final deed would not work to invalidate the
contract where all the essential elements for its validity are present and can be proven.
he failure of the parties to
specify with absolute clarity the
object of a contract by including
its technical description is of
no moment. What is
important is that there is, in
fact, an
object that is determinate or
at least determinable, as
subject of the contract of
sale.
he failure of the parties to
specify with absolute clarity the
object of a contract by including
its technical description is of
no moment. What is
important is that there is, in
fact, an
object that is determinate or
at least determinable, as
subject of the contract of
sale.
he failure of the parties to
specify with absolute clarity the
object of a contract by including
its technical description is of
no moment. What is
important is that there is, in
fact, an
object that is determinate or
at least determinable, as
subject of the contract of
sale.
he failure of the parties to
specify with absolute clarity the
object of a contract by including
its technical description is of
no moment. What is
important is that there is, in
fact, an
object that is determinate or
at least determinable, as
subject of the contract of
sale.
Fidel Mananzala vs. Court of Appeals G.R. 115101
Facts:

Petitioner Fidela Mananzala is the registered owner of a parcel of land. Petitioner had been in
actual possession of the land since 1955 by virtue of a conditional sale made in her favor by
the National Housing Authority (NHA).

Respondent Corazon Aranez brought action for specific performance against petitioner to
enforce a deed of sale covering the same lot allegedly entered into between her and petitioner.

The contract stipulated that title to the land shall be transferred to private respondent within
30 days after full payment of the purchase price by petitioner to the NHA.

Issue:

Whether the contract is valid considering Mananzala is not yet the owner of the subject land.

Held:

Yes, Art. 1461 of the Civil Code, which provides that things having a potential existence may be
the object of a contract of sale.

The question whether the sale was void because it was made within the one-year period of
prohibition to petitioner as awardee was never briefed or in any way argued below. For all
intents and purposes, therefore, petitioner waived this ground.