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CPG

Exclusive property

G.R. No. L-23352 December 31, 1925

THE PHILIPPINE SUGAR ESTATES DEVELOPMENT CO., LTD.,

INC., plaintiff-appellee,

vs.

JUAN M. POIZAT, ET AL., defendants.GABRIELA ANDREA DE COSTER, appellant.

Antonio M. Opisso for appellant.

Eusebio Orense and Fisher, DeWitt, Perkins & Brady for

appellee.

STATEMENT

August 25, 1905, the appellant, with his consent executed to

and in favor of her husband, Juan M. Poizat, a general power

of attorney, which among other things, authorized him to do

in her name, place and stead, and making use of her rights

and actions, the following things:

To loan or borrow any amount in cash or fungible

conditions he may deem convenient collecting or

paying the principal or interest, for the time, and

under the principal of the interest, when they

respectively should or private documents, and

making there transactions with or without

mortgage, pledge or personal securities.

November 2, 1912, Juan M. Poizat applied for and obtained

from the plaintiff a credit for the sum of 10,000 Pounds

Sterling to be drawn on the" Banco Espanol del Rio de la

Plata" in London not later than January, 1913. Later, to secure

the payment of the loan, he executed a mortgage upon the

real property of his wife, the material portions of which are as

follows:

This indenture entered into the City of Manila, P.I.,

by and between Juan M. Poizat, merchant, of legal

age, married and residing in the City of Manila, in

his own behalf and in his capacity also as attorney

in fact of his wife Dona Gabriela Andrea de Coster

by virtue of the authority vested in him by the

power of attorney duly executed and acknowledge

in this City of Manila, etc.

First. That in the name of Dona Gabriela Andrea de

Coster, wife of Don Juan M. Poizat, there is

registered on page 89 (back) of Book 3, Urban

Property consisting of a house and six adjacentwarehouse, all of strong material and constructed

upon her own land, said property being Nos. 5, 3,

and 1 of Calle Urbiztondo, and No. 13 of Calle

Barraca in the District of Binondo in the City of

Manila, etc.

Second. That the marriage of Don Juan M. Poizat

and Dona Gabriela Andrea de Coster being

subsisting and undissolved, and with the object of

constructing a new building over the land

hereinabove described, the aforesaid house with

the six warehouse thereon constructed were

demolished and in their stead a building was

erected, by permission of the Department ofEngineering and Public Works of this City issued

November 10, 1902, said building being of strong

material which, together with the land, now forms

only one piece of real estate, etc; which property

must be the subject of a new description in which it

must appear that the land belongs in fee simple and

in full ownership as paraphernal property to the

said Dona Gabriela Andrea de Coster and the new

building thereon constructed to the conjugal

partnership of Don Juan M. Poizat and the said

Dona Gabriela Andrea de Coster, etc.

Third. That the Philippine Sugar Estates

Development Company, Ltd., having granted to Don

Juan M. Poizat a credit of Ten Thousand Pounds

Sterling with a mortgage upon the real property

above described, etc.

(a) That the Philippine sugar Estated Development

Company, Ltd. hereby grants Don Juan M. Poizat a

credit in the amount of Ten Thousand Pounds

sterling which the said Mr. Poizat may use within

the entire month of January of the coming year,1913, upon the bank established in the City of

London, England, known as 'Banco Espanol del Rio

de la Plata, which shall be duly advised, so as to

place upon the credit of Mr. Poizat the said amount

of Ten Thousand Pounds Sterling, after executing

the necessary receipts therefore.

(c) That Don Juan M. Poizat personally binds himself

and also binds his principal Dona Gabriela Andrea

de Coster to pay the Philippine Sugar Estates

Development Company, Ltd., for the said amount of

Ten Thousand Pounds Sterling at the yearly interest

of 9 per cent which shall be paid at the end of each

quarter, etc.

(d) Don Juan M. Poizat also binds himself personally

and his principal Dona Gabriela Andrea de Coster to

return to the Philippine Sugar Estates Development

Company, Ltd., the amount of Ten Thousand

Pounds Sterling within four years from the date

that the said Mr. Poizat shall receive the aforesaid

sum as evidenced by the receipt that he shall issue

to the 'BAnco Espanol del Rio de la Plata.'

(e) As security for the payment of the said credit, in

the case Mr. Poizat should receive the money,

together with its interest hereby constitutes a

voluntary especial mortgage upon the PhilippineSugar Estates Development Company, Ltd., f the

urban property above described, etc.

(f) Don Juan M. Poizat in the capacity above

mentioned binds himself, should he receive the

amount of the credit, and while he may not return

the said amount of Ten thousand Pounds Sterling to

the Philippine Sugar Estates Development

Company, Ltd., to insure against fire the mortgaged

property in an amount not less than One hundred

Thousand Pesos, etc.

Fourth. Don Buenaventura Campa in the capacity

that he holds hereby accepts this indenture in theform, manner, and condition executed by Don Juan

M. Poizat by himself personally and in

representation of his wife Dona Gabriela Andrea de

Coster, in favor of the Philippine Sugar Estates

Development Company, Ltd.,

In witness whereof, we have signed these presents

in Manila, this November 2, 1912.

(Sgd.) JUAN M. POIZAT

THE PHILIPPINE SUGAR ESTATES

DEVELOPMENT COMPANY, LTD.

The President

BUENAVENTURA CAMPA

Signed in the presence of:

(Sgd.) MANUEL SAPSANO

JOSE SANTOS

UNITED STATES OF AMERICA

PHILIPPINE ISLANDS

CITY OF MANILA

In the City of Manila P.I., this November 2, 1912,

before me Enrique Barrera y Caldes, a Notary Public

for said city, personally appeared before me Don

Juan M. Poizat and Don Buenaventura Campa,

whom i know to be the persons who executed the


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foregoing document and acknowledged same

before me as an act of their free will and deed; the

first exhibited to me his certificate of registry No.

14237, issued in Manila, February 6, 1912, the

second did not exhibit any cedula, being over sixty

years old; this document bears No. 495, entered on

page 80 of my Notarial registry.

Before me:

(Sgd.) Dr. ENRIQUE BARRERA Y

CALDES

[NOTARIAL SEAL]

Notary Public

Up to the 31st of December ,

1912

For failure to pay the loan, on November 12, 1923, the

plaintiff brought an action against the defendants to foreclose

the mortgage. In this action, the summons was served upon

the defendant Juan M. Poizat only, who employed the

services of Antonio A. Sanz to represent the defendants. Theattorneys filed a general appearance for all of them, and later

an answer in the nature of a general denial.

February 18, 1924, when the case was called for trial, Jose

Galan y Blanco in open court admitted all of the allegations

made in the compliant, and consented that judgment should

be rendered as prayed for . Later, Juan M. Poizat personally,

for himself and his codefendants, file an exception to the

judgment and moved for a new trial, which was denied March

31, 1924.

August 22, 1924, execution was issued directing the sale of

the mortgaged property to satisfy the judgment. itc@alf

September 18, 1924, the property, which had an assessed

value of P342,685, was sold to the plaintiff for the sum of

P100,000.

September 23, 1924, and for the first time, the appellant

personally appeared by her present attorney, and objected to

the confirmation of the sale, among other things, upon

illegally executed, and is null and void, because the agent of

this defendant was not authorized to execute it. That there

was no consideration. That the plaintiff, with full knowledge

that J. M. Poizat was acting beyond the scope of his authority,

filed this action to subject the property of this defendant to

the payment of the debt which, as to appellant, was not a

valid contract. That the judgment was rendered by confessionwhen the plaintiff and J. M. Poizat knew that Poizat was not

authorized to confess judgment, and that the proceeding was

a constructive fraud. That at the time the action was filed and

the judgment rendered, this defendant was absent from the

Philippine Islands, and had no knowledge of the execution of

the mortgage. That after the judgment of foreclosure became

final and order of the sale of the property was made, that this

defendant for the first time learned that he mortgage contract

was tainted with fraud, and that she first knew and learned of

such things on the 11th of September, 1924. That J. M. Poizat

was not authorized to bind her property to secure the

payment of his personal debts. That the plaintiff knew that

the agent of the defendant was not authorized to bind her or

her property. That the mortgage was executed to secure a

loan of 10,000 Pounds which was not made to this defendantor for her benefit, but was made to him personally and for the

personal use and benefit of J. M. Poizat.

Among other things, the mortgage in question, marked Exhibit

B, was introduced in evidence, and made a part of the record.

All of such objections to the confirmation of the sale were

overruled, from which Gabriela Andrea de Coster appealed

and assigns the following errors:

I. The lower court erred in finding that Juan M.

Poizat was, under the power of attorney which he

had from Gabriela Andrea de Coster, authorized to

mortgage her paraphernal property as security for a

loan made to him personally by the Philippine Sugar

Estates Development Company, Ltd., to him;

II. The lower court erred in not f inding that under

the power of attorney, Juan M. Poizat had no

authority to make Gabriela Andrea de Coster jointly

liable with him for a loan of 10,000 pound made by

the Philippine Sugar Estates Development Co., Ltd.,to him;

III. The lower court erred in not f inding that the

Philippine Sugar Estates Development Company,

Ltd., had knowledge and notice of the lack of

authority of Don Juan M. Poizat to execute the

mortgage deed Exhibit A of the plaintiff;

IV. The lower court erred in holding that Gabriela

Andrea de Coster was duly summoned in this case;

and in holding that Attorney Jose Galan y Blanco

could lawfully represent her or could, without proof

of express authority, confess judgment against

Gabriela Andrea de Coster;

V. The court erred in holding that the judgment in

this case has become final and res judicata;

VI. The court erred in approving the judicial sale

made by the sheriff at an inadequate price;

VII. The lower court erred in not declaring these

proceedings, the judgment and the sale null and

void.

JOHNS,J.:

For the reasons stated in the decision of this court in the Bank

of the Philippine Islands vs. De Coster, the alleged service of

the summons in the foreclosure suit upon the appellant was

null and void. In fact, it was made on J. M. Poizat only, and

there is no claim or pretense that any service of summons was

ever made upon her. After service was made upon him, the

attorneys in question entered their appearance for all of the

defendants in the action, including the appellant upon whom

no service was ever made, and file an answer for them. Later,

in open court, it was agreed that judgment should be entered

for the plaintiff as prayed for in its complaint.

The appellant contends that the appearance made by the

attorneys for her was collusive and fraudulent, and that it was

made without her authority, and there maybe some truth in

that contention. It is very apparent that t the attorneys made

no effort to protect or defend her legal rights, but under our

view of the case, that question is not material to this decision.

The storm center of this case is the legal force and effect of

the real mortgage in question , by whom and for whom it was

executed, and upon whom is it binding, and whether or not it

is null and void as to the appellant.

It is admitted that the appellant gave her husband, J. M.

Poizat, the power of attorney in question, and that it is inwriting and speaks for itself. If the mortgage was legally

executed by her attorney in fact for her and in her name as

her act and deed, it would be legal and binding upon her and

her property. If not so executed, it is null and void.

It appears upon the face of the instrument that J. M. Poizat as

the husband of the wife, was personally a party to the

mortgage, and that he was the only persona who signed the

mortgage. and the he was the only person who signed the

mortgage. It does not appear from his signature that he

signed it for his wife or as her agent or attorney in fact, and

there is nothing in his signature that would indicate that in the

signing of it by him, he intended that his signature should bind

his wife. It also appears from the acknowledgment of theinstrument that he executed it as his personal act and deed


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only, and there is nothing to show that he acknowledge it as

the agent or attorney in fact of his wife, or as her act and

deed.

The mortgage recites that it was entered into by and between

Juan M. Poizat in his own behalf and as attorney in fact of his

wife. That the record title of the mortgaged property is

registered in the name of his wife, Dona Gabriela Andrea deCoster. That they were legally married, and that the marriage

between them has never been dissolved. That with the object

of constructing a new building on the land. the six warehouses

thereon were demolished, and that a new building was

erected. That the property is the subject of a new registration

in which it must be made to appear that the land belongs in

fee simple and in full ownership as the paraphernal property

of the wife, and that the new building thereon is the property

of the conjugal partnership. "That the Philippine Sugar Estates

Development Company, Ltd., having granted to Don Juan M.

Poizat a credit of 10,000 Pounds Sterling with the mortgage

upon the real property above described," that the

Development Company "hereby grants Don Juan M. Poizat a

credit in the amount of 10,000 Pounds Sterling which the said

Mr. Poizat may use, etc." That should he personally or on

behalf of his wife use the credit he acknowledges, that he and

his principal are indebted to the Development Company in the

sum of 10,000 Pounds Sterling which "they deem to have

received as a loan from the said commercial entity." That he

binds himself and his wife to pay that amount with a yearly

interest of 9 per cent, payable quarterly. That as security for

the payment of said credit in the case Mr. Poizat should

receive the money at any time, with its interest, "the said Mr.

Poizat in the dual capacity that above mentioned binds

himself, should he receive the amount of the credit."

It thus appears that at the time the power of attorney and the

mortgage were executed, Don Juan M. Poizat and Gabriela

Andrea de Coster were husband and wife, and that the realproperty upon which the mortgage was her sole property

before her marriage, and that it was her paraphernal property

at the time the mortgage was executed, and that the new

building constructed on the land was the property of the

conjugal partnership.

The instrument further recites that the Development

Company "hereby grants Don Juan M. Poizat a credit in the

amount of 10,000 Pounds Sterling which the said Mr. Poizat

may use within the entire month of January of the coming

year, 1913." In other words, it appears upon the face of the

mortgage that the loan was made to the husband with

authority to use the money for his sole use and benefit. With

or without a power of attorney, the signature of the husbandwould be necessary to make the instrument a valid mortgage

upon the property of the wife, even though she personally

signed the mortgage.

It is contended that the instrument upon its face shows that

its purpose and intent was to bind the wife. But it also shows

upon its face that the credit was granted to Don Juan M.

Poizat which he might use within the "entire month of

January."

Any authority which he had to bind his wife should be

confined and limited to his power of attorney.

Giving to it the very broadest construction, he would not haveany authority to mortgage her property, unless the mortgage

was executed for her "and in her name, place or stead," and

as her act and deed. The mortgage in question was not so

executed. it was signed by Don Juan M. Poizat in his own

name, his own proper person, and by him only, and it was

acknowledge by him in his personal capacity, and there is

nothing in either the signature or acknowledgment which

shows or tends to show that it was executed for or on behalf

of his wife or "in her name, place or stead."

It is contended that the instrument shows upon its face that it

was intended to make the wife liable for his debt, and to

mortgage her property to secure its payment, and that his

personal signature should legally be construed as the joined

or dual signature of both the husband and that of the wife as

her agent. That is to say, construing the recitals in the

mortgage and the instrument as a whole, his lone personal

signature should be construed in a double capacity and

binding equally and alike both upon the husband and the wife.

No authority has been cited, and none will ever be found to

sustain such a construction.

As the husband of the wife, his signature was necessary tomake the mortgage valid. In other words, to make it valid, it

should have been signed by the husband in his own proper

person and by him as attorney in fact for his wife, and it

should have been executed by both husband and wife, and

should have been so acknowledged.

There is no principle of law by which a person can become

liable on a real mortgage which she never executed either in

person or by attorney in fact. It should be noted that this is a

mortgage upon real property, the title to which cannot be

divested except by sale on execution or the formalities of a

will or deed. For such reasons, the law requires that a power

of attorney to mortgage or sell real property should be

executed with all of the formalities required in a deed. For thesame reason that the personal signature of Poizat, standing

alone, would not convey the title of his wife in her own real

property, such a signature would not bind her as a mortgagor

in real property, the title to which was in her name.

We make this broad assertion that upon the facts shown in

the record, no authority will ever be found to hold the wife

liable on a mortgage of her real property which was executed

in the form and manner in which the mortgage in question

was executed. The real question involved is fully discussed in

Mechem on Agency, volume 1, page 784, in which the author

says:

It is to be observed that the question here is nothow but how such an authority is to be executed. it

is assumed that the agent was authorized to bind

his principal, but the question is, has he done so.

That is the question here.

Upon that point, there is a full discussion in the following

sections, and numerous authorities are cited:

SEC. 1093. Deed by agent must purport to be made

and sealed in the name of the principal. It is a

general rule in the law of agency that in order to

bind the principal by a deed executed by an agent,

the deed must upon its grace purport to be made,signed and sealed in the name of the principal. If,

on the contrary, though the agent describes name,

the words of grant, covenant and the like, purport

upon the face of the instrument to be his, and the

seal purports to be his seal, the deed will bind the

agent if any one and not the principal.

SEC. 1101. Whose deed is a given deed. How

question determined. In determining whether a

given deed is the deed of the principal, regard may

be had First, to the party named as grantor. Is the

deed stated to be made by the principal or by some

other person? Secondly, to the granting clause. Is

the principal or the agent the person who purportsto make the grant? Thirdly, to the covenants, if any.

Are these the covenants of the principal? Fourthly,

to the testimonium clause. Who is it who is to set

his name and seal in testimony of the grant? Is it

the principal or the agent? And Fifthly, to the

signature and seal. Whose signature and seal are

these? Are they those of the principal or of the

agent?

If upon such an analysis the deed does not upon its

face purport to be the deed of the principal, made,

signed, sealed and delivered in his name and his

deed, it cannot take effect as such.


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SEC. 1102. Not enough to make deed the principal's

that the agent is described as such. It is not

enough merely that not acted in the name of the

principal. Nor is it ordinarily sufficient that he

describes himself in the deed as acting by virtue of

a power of attorney or otherwise, or for or in

behalf, or as attorney, of the principal, or as a

committee, or as trustee of a corporation, etc.; forthese expressions are usually but descriptio

personae, and if, in fact, he has acted of action

thereon accrue to and against him personally and

not to or against the principal, despite these recital.

SEC. 1103. Not principal's deed where agent

appears as grantor and signer. Neither can the

deed ordinarily be deemed to be the deed of the

principal where the agent is the one who is named

as the grantor or maker, and he is also the one who

signs and seals it. . . .

SEC. 1108. . . . But however clearly the body of the

deed may show an intent that it shall be the act ofhe principal, yet unless its executed by his attorney

for him, it is not his deed, but the deed of the

attorney or of no one. The most usual and

approved form of executing a deed by attorney is

by his writing the name of the principal and adding

by A B his attorney or by his attorney A B.'

That is good law. Applying it to the facts, under his power of

attorney, Juan M. Poizat may have had authority to borrow

money and mortgage the real property of his wife, but the law

specifies how and in what manner it must be done, and the

stubborn fact remains that, as to the transaction in question,

that power was never exercised. The mortgage in question

was executed by him and him only, and for such reason, it is

not binding upon the wife, and as to her, it is null and void.

It follows that the whole decree against her and her

paraphernal property and the sale of that property to satisfy

the mortgage are null and void, and that any title she may

have had in or to her paraphernal property remains and is

now vested in the wife as fully and as absolutely as if the

mortgage had never been executed, the decree rendered or

the property sold. As to Don Juan M. Poizat, the decree is

valid and binding, and remains in full force and effect.

It is an undisputed fact, which appears in the mortgage itself,

that the land in question was the paraphernal property of the

wife, but after the marriage the old buildings on the property

were torn down and a new bui lding constructed and, in the

absence of evidence to the contrary, it must be presumed that

the new building is conjugal property of the husband and

wife. As such, it is subject of the debts of the conjugal

partnership for the payment or security of which the husband

has the power to mortgage or otherwise encumber the

property .

It is very probable that his particular question was not fully

presented to or considered by the lower court.

The mortgage as to the paraphernal property of the wife is

declared null and void ab initio, and as to her personally, the

decree is declared null and void, and as to her paraphernal

property, the sale is set aside and vacated, and held fornaught, leaving it free and clear from the mortgage, decree

and sale, and in the same condition as if the mortgage had

never been executed, with costs in favor of the appellant. So

ordered.

Johnson, Malcolm, Ostrand, and Romualdez, JJ., concur.

[G.R. No. 143297. February 11, 2003]

SPOUSES VIRGILIO and MICHELLE CASTRO, MOISES B. MIAT

and ALEXANDER V. MIAT, petitioners, vs. ROMEO V. MIAT,

respondent.

D E C I S I O N

PUNO, J.:

This is a petition for review on certiorari of the decision

rendered by the Court of Appeals in CA-G.R. CV No. 43053,

entitled Romeo V. Miat vs. Spouses Virgilio and Michelle

Castro, Moises B. Miat and Alexander V. Miat, dated

November 29, 1999.[1]

The evidence shows that the spouses Moises and Concordia

Miat bought two (2) parcels of land during their coverture.

The first is located at Wawa La Huerta, Airport Village,

Paraaque, Metro Manila[2] and covered by TCT No. S-

33535.[3] The second is located at Paco, Manila,[4] and

covered by TCT No. 163863.[5] Concordia died on April 30,

1978. They had two (2) children: Romeo and Alexander.

While at Dubai, United Arab Emirates, Moises agreed that the

Paraaque and Paco properties would be given to Romeo and

Alexander.[6] However, when Moises returned in 1984, he

renegotiated the agreement with Romeo and Alexander. He

wanted the Paraaque property for himself but would leave

the Paco property to his two (2) sons. They agreed.[7]

It appears that Moises and Concordia bought the Paco

property on installment basis on May 17, 1977.[8] However,

it was only on December 14, 1984 that Moises was able to pay

its balance.[9] He secured the title over the property in his

name as a widower.[10] According to Romeo, Moises violated

the agreement that their (Romeos and Alexanders) names

would be registered in the title once the balance was paid.[11]

Upon demand, Moises gave the owners duplicate of the Paco

property title to Romeo.

Romeo and Alexander lived on the Paco property. They paid

its realty taxes and fire insurance premiums.[12] In early

August 1985, Alexander and his first wife left the house for

personal reasons. In April 1988, Alexander agreed to sell to

Romeo his share in the Paco property for P42,750.00.[13] He

received a partial payment of P6,000.00 from Romeo.[14]

Nonetheless, he never executed a deed of assignment in favor

of Romeo, as he had lots of work to do and had no time and

x x x there [wa]s nothing to worry [as] the title [wa]s in

*Romeos+ possession.*15+

In February 1988, Romeo learned from his godmother in his

wedding, Mrs. Rosalina Castro, mother of petitioner Virgilio

Castro, that she had given Moises P30,000.00 as

downpayment for the sale by Moises of the Paco property to

her son Virgilio.[16]

On December 1, 1988, Romeo was brought by petitioner

Virgilio Castro to the chambers of Judge Anunciacion of the

Metropolitan Trial Court of Manila where the status of the

Paco property was discussed.[17] On December 16, 1988, he

received a letter from petitioner Castros lawyer asking for a

conference. Romeo was informed that the Paco property had

been sold to Castro by Moises by virtue of a deed of sale

dated December 5, 1988[18] for ninety-five thousand

(P95,000.00) pesos.[19]

Ceferino Miat, brother of petitioner Moises,[20] testified that

even before the death of Concordia[21] there was already an

agreement that the Paco property would go to Romeo and

Alexander.[22] This was reiterated at the deathbed of

Concordia.[23] When Moises returned to Manila for good,

the agreement was reiterated[24] in front of the extended

Miat family members.[25] Initially, Romeo and Alexander

orally[26] divided the Paco property between themselves.[27]

Later, however, Alexander sold his share to Romeo.[28]

Alexander was given P6,000.00 as downpayment. This was

corroborated by Pedro Miranda and Virgilio Miat. Miranda

worked with Moises at the Bayview Hotel and the Hotel


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Filipinas.[29] His wife is the cousin of Romeo and

Alexander.[30] Virgilio is the brother of Moises.

Moises confirmed that he and his wife Concordia bought the

Paco property on installment from the Fraval Realty, Inc.

There was still a balance of P12,000.00 on the lot at the time

of his wifes death.*31+ He paid P3,500.00 in 1981[32] and

P8,500.00 in 1984.[33] He registered the title in his name.

Romeo then borrowed the title as he was going to mortgage it

to his friend Lorenzo.[34]

Later, Moises ran into financial difficulties and he mortgaged

for P30,000.00 the Paco property to the parents of petitioner

Virgilio Castro.[35] He informed Romeo and Alexander that

he would be forced to sell the Paco property if they would not

redeem the mortgage. He accompanied his children to the

Manila City Hall to discuss its sale with a judge and a lawyer.

Also present in the meeting were petitioner Virgilio Castro

and his parents. After the conference, he proceeded to sell

the property to the petitioners-spouses Castro.[36]

Alexander testified that after the sale, his father got one-third

(1/3) of the proceeds while he received two-thirds (2/3).

Romeo did not get a single centavo but was given the right to

till their Nueva Ecija property.[37] From his share of the

proceeds, Alexander intended to return to Romeo the

P6,000.00 given him earlier by the latter. He considered the

money to be a personal debt due Romeo, not Romeos

downpayment of his share in the Paco property.[38]

The buyer of the property, petitioner Virgilio P. Castro,

testified that he informed Romeo that his father Moises was

selling the Paco property. Romeo replied: Bahala siya.*39+

The second time he informed Romeo about the pending sale

was when he brought Romeo, Alexander and Moises to Judge

Anunciacion to consult him *as to+ who has *the+ right over

the *Paco+ property.*40+ He further declared that he went

to the Metropolitan Trial Court because [he] wanted to be

sure whether *he+ could buy the property.*41+ During the

meeting, he was told by Romeo that the Paco property was

already given to him (Romeo) by Moises. He admitted

knowing that the title to the Paco property was in the

possession of Romeo.[42] However, he proceeded with the

sale. Moises assured him that he would be able to get the

title from Romeo.[43]

These events precipitated the case at bar. Romeo filed an

action to nullify the sale between Moises and the Castro

spouses; to compel Moises and Alexander to execute a deed

of conveyance or assignment of the Paco property to him

upon payment of the balance of its agreed price; and to make

them pay damages.[44]

After trial, the Regional Trial Court rendered its decision,[45]

which in its dispositive portion states as follows:

WHEREFORE, in view ofthe foregoing, the Court hereby

orders the following: 1) Defendant Alexander V. Miat to

execute a deed of sale of his share in the property upon

payment by plaintiff Romeo of the balance of the purchase

price in the sum of P36,750.00; 2) Plaintiff Romeo V. Miat to

recognize as valid the sale of defendant Moises share in the

house and lot located at No. 1495-C Fabie Estate, Paco,

Manila; 3) the dismissal of defendants counter-claim; and 4)

defendants to pay the costs of suit.

Both parties appealed to Court of Appeals. On November 29,

1999, the appellate Court modified the Decision as

follows:[46]

WHEREFORE, the appealed decision is MODIFIED as follows:

(1) The deed of sale entered into between defendants-

appellants Moises Miat and spouses Virgilio and Michelle

Castro is hereby NULLIFIED.

(2) Defendant-appellants Moises Miat and Alexander Miat are

ordered to execute a deed of conveyance over the Paco

property with TCT No. 16383 (sic) in favor of plaintiff-

appellant Romeo Miat, upon payment by Romeo Miat of the

balance of the purchase price in the sum of P36,750.00.

(3) Defendants-appellants are ordered, jointly and severally,

to pay plaintiff-appellant attorneys fees in the amount of

P30,000.00 and to pay the costs of suit.

Reconsideration was denied on May 17, 2000.

Hence, this petition where the petitioners assign the following

errors:

THE RESPONDENT COURT OF APPEALS GRAVELY ERRED AND

DID PETITIONERS AN INJUSTICE IN MODIFYING OR REVERSINGTHE DECISION OF THE TRIAL COURT DATED MARCH 17, 1993

WHICH ORDERED RESPONDENT ROMEO MIAT TO RECOGNIZE

AS VALID THE DEED OF SALE ENTERED INTO BETWEEN

PETITIONERS MOISES MIAT AND SPS. VIRGILIO AND MICHELLE

CASTRO PERTAINING TO PETITIONER MOISES MIATS SHARE

IN THE HOUSE AND LOT LOCATED IN PACO, MANILA, WHEN IT

DECLARED SAID DEED OF SALE NULLIFIED.

THE RESPONDENT COURT OF APPEALS PATENTLY ERRED IN

AFFIRMING OR UPHOLDING THE TRIAL COURTS DECISION

ORDERING ALEXANDER MIAT AND INCLUDING MOISES MIAT

TO EXECUTE A DEED OF CONVEYANCE OVER THE PACO

PROPERTY WITH TCT NO. 16383 IN FAVOR OF ROMEO MIATUPON PAYMENT BY THE LATTER OF THE BALANCE OF THE

PURCHASE PRICE IN THE SUM OF P36,750.00.

THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN

FURTHER ORDERING PETITIONERS TO PAY RESPONDENT,

JOINTLY AND SEVERALLY, ATTORNEYS FEES IN THE AMOUNT

OF P30,000.00 AND AFFIRMING THE COURT A QUOS ORDER

FOR THE PETITIONERS TO PAY THE COST OF SUIT.*47+

The issues can be simplified thus:

1. Whether the Paco property is conjugal or capital;

2. Whether there was a valid oral partition covering the said

property; and

3. Whether the spouses Castro were buyers in good faith.

I

The petitioners contend that the Paco property is the capital

property of Moises. They allege that the spouses Moises and

Concordia purchased the property on installment basis in

1977 but stress that it was Moises who paid the balance oftwelve thousand (P12,000.00) pesos in 1984. At that time,

Concordia had long been dead. She died in 1978.

We disagree.

Since Moises and Concordia were married before the

effectivity of the Family Code, the provisions of the New Civil

Code apply.

Article 153(1) of the New Civil Code[48] provides as follows:

The following are conjugal partnership property:


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(1) Those acquired by onerous title during the marriage at the

expense of the common fund, whether the acquisition be for

the partnership, or for only one of the spouses; x x x.

The records show that the Paco property was acquired by

onerous title during the marriage out of the common fund. It

is clearly conjugal property.

Petitioners also overlook Article 160 of the New Civil Code. It

provides that all property of the marriage is presumed to

belong to the conjugal partnership, unless it be proved that it

pertains exclusively to the husband or to the wife. This

article does not require proof that the property was acquired

with funds of the partnership. The presumption applies even

when the manner in which the property was acquired does

not appear.[49]

Petitioners reliance on Lorenzo vs. Nicolas*50+ is misplaced.

That case involved two (2) parcels of land that Magdalena

Clemente purchased on installment and started paying for

when she was not yet married to Manuel Lorenzo. When she

married Manuel Lorenzo she continued to pay the

installments in her own name. Upon completion of payment,

the deed of final conveyance was executed in her sole favor

and the land was registered in the exclusive name of

Magdalena Clemente. The Court ruled that the two (2)

parcels of land were the paraphernal properties of Magdalena

Clemente, thus:

x x x the fact that all receipts for installments paid even

during the lifetime of the late husband Manuel Lorenzo were

issued in the name of Magdalena Clemente and that the deed

of sale or conveyance of parcel no. 6 was made in her name in

spite of the fact that Manuel Lorenzo was still alive shows that

the two parcels of land belonged to Magdalena

Clemente.*51+ (emphasis supplied)

In the case at bar, Moises and Concordia bought the Paco

property during their marriage Moises did not bring it into

their marriage, hence it has to be considered as conjugal.

Likewise, Jovellanos vs. Court of Appeals[52] cited by the

petitioners is inapropos. In said case, Daniel Jovellanos, while

he was still married to his first wife, Leonor Dizon, entered

into a contract of leaseand conditional sale with Philamlife.

He continued paying the rental after the death of his first wife

and during the subsistence of his marriage with his second

wife, Anette Jovellanos. He completed the payment during

the existence of his second marriage. The Court ruled that the

property belonged to the conjugal partnership with the

second wife as Daniel Jovellanos acquired ownership thereof

only upon full payment of the said amount hence, although he

had been in possession of the premises since September 2,

1955, it was only on January 8, 1975 that the Philamlife

executed the deed of absolute sale thereof in his favor. x x x

Since as early as 1967, he was already married to Annette H.

Jovellanos, this property necessarily belonged to his conjugal

partnership with his second wife.*53+ In the case at bar,

Moises and Concordia executed a Deed of Sale with

Mortgage. The contract is one of sale the title passed to

them upon delivery of the Paco property.[54] In fine, title was

gained during the conjugal partnership.

II

The next issue is whether the oral partition between Moises

and his sons, Romeo and Alexander, involving the said

property is valid. In ruling in favor of its validity which we

affirm, the appellate court relied on a portion of Moises letter

to Romeo, which reads as follows:[55]

KAYA PAG-USAPAN LANG NINYONG MABUTI ANG ANONG

BALAK AT GUSTO NINYONG PAGHATI SA BAHAY, AT YAN AY

PAGPAPASIYAHAN KO KONG (sic) MAKAKABUTI SA INYONG

DALAWA. AT WALA AKONG HIGIT NA PAPABURAN SA

INYONG DALAWA PAREHO KAYONG MAHAL SA AKIN, HINDI

AKO TULAD SA IBANG MAGULANG NA HINDI PAREHO ANG

PAGTINGIN SA MGA ANAK. ANG BAHAY[56] AY PARA SA

INYONG DALAWA, LALO NA NGAYONG MAY ASAWA NA

KAYONG PAREHO. x x x *All caps in the original+

Ceferino Miat, brother of Moises, testified that before

Concordia died, there was an agreement that the Paraaque

property would go to Moises while the Paco property would

go to Romeo and Alexander. This was reiterated at the

deathbed of Concordia. When Moises returned to Manila for

good, the agreement was affirmed in front of the extended

Miat family members. Initially, Romeo and Alexander orally

divided the Paco property between them. Later, Alexander

sold his share to Romeo.

This agreement was attested to by the extended Miat Family

members in a document marked as Exhibit D, which reads

as follows:[57]

Pebrero 18, 1989

SINUMPAANG SALAYSAY SA MGA KINAUUKULAN,

Kami, na nakalagda sa ibaba, ay nanunumpa sa harapan ng

Punong Barangay, na si G. REYNALDO P. WONG:

Na kami ay mga saksi sa kasunduan nina G. MOISES B. MIAT,

asawa ng yumao na, na si Gng. CONCORDIA VALENZUELA

MIAT, at mga anak nitong sina G. ROMEO V. MIAT at G.

ALEXANDER V. MIAT:

Na ang kasunduan ay ang mga sumusunod:

1. Na ang pag-aaring lupa (132 sq. m.) ng mag-asawa (MOISES

at CONCORDIA) sa Airport Village sa Paraaque, Metro Manila

ay mapupunta kay G. MOISES B. MIAT;

2. Na ang pag-aaring lupa at bahay (70 sq. m.) ng mag-asawa

ring nabanggit ay sa magkapatid na ROMEO at ALEXANDER

mapupunta at ito ay nasa address na 1495-C FABIE, PACO,

MANILA.

MGA SUMUMPA:[58]

(Sgd.) (Sgd.)

1) Ceferino B. Miat 6) Lorenzo C. Valenzuela

(kapatid ni Moises) (kapatid ni Concordia)

(Sgd.) (Sgd.)

2) Avelina J. Miat 7) Patricio C. Valenzuela

(asawa ni Ceferino) (kapatid ni Concordia)

(Sgd.) (Sgd.)

3) Virgilio Miat 8) Victor C. Valenzuela

(kapatid ni Moises) (kapatid ni Concordia)

(Sgd.) (Sgd.)

4) Aurea Miat-Joson 9) Elsa P. Miranda

(kapatid ni Moises)

(Sgd.)

5) Jose A. Joson

(asawa ni Aurea)

(Sgd.)

REYNALDO P. WONG

Kapitan ng Barangay

Sta. Maria, Licab, N.E.(emphasis supplied)

The consideration for the grant to Romeo and Alexander of

the Paco property was best expressed by Moises himself in hisletter to Romeo, which reads as follows:


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Labis akong nagpapasalamat at nauunawaan ninyo ang mga

pagkakamali ko at mga kasalanan kong nagawa sa inyong

mag-iina, huwag kayong mag-alala at lahat nang naipundar

namin nang (sic) inyong nanay ay sa inyong dalawang

magkapatid mapupunta.*59+

We also hold that the oral partition between Romeo and

Alexander is not covered by the Statute of Frauds. It is

enforceable for two reasons. Firstly, Alexander accepted the

six thousand (P6,000.00) pesos given by Romeo as

downpayment for the purchase of his share in the Paco

property. Secondly, Romeo and his witnesses, Ceferino Miat

and Pedro Miranda, who testified regarding the sale of

Alexanders share to Romeo, were intensely questioned by

petitioners counsel.*60+

In the recent case of Pada-Kilario vs. Court of Appeals, we

held:[61]

*N+o law requires partition among heirs to be in writing and

be registered in order to be valid. The requirement in Sec. 1,

Rule 74 of the Revised Rules of Court that a partition be put in

a public document and registered, has for its purpose the

protection of creditors and the heirs themselves against tardy

claims. The object of registration is to serve as constructive

notice to others. It follows then that the intrinsic validity of

partition not executed with the prescribed formalities is not

undermined when no creditors are involved. Without

creditors to take into consideration, it is competent for the

heirs of an estate to enter into an agreement for distribution

thereof in a manner and upon a plan different from those

provided by the rules from which, in the first place, nothing

can be inferred that a writing or other formality is essential

for the partition to be valid. The partition of inherited

property need not be embodied in a public document so as to

be effective as regards the heirs that participated therein.

The requirement of Article 1358 of the Civil Code that acts

which have for their object the creation, transmission,

modification or extinguishment of real rights over immovable

property, must appear in a public instrument, is only for

convenience, non-compliance with which does not affect the

validity or enforceability of the acts of the parties as among

themselves. And neither does the Statute of Frauds under

Article 1403 of the New Civil Code apply because partition

among heirs is not legally deemed a conveyance of real

property, considering that it involves not a transfer ofproperty from one to the other but rather, a confirmation or

ratification of title or right of property that an heir is

renouncing in favor of another heir who accepts and receives

the inheritance. x x x.

III

The appellate court also correctly held that the petitioners-

spouses Castro were not buyers in good faith. A purchaser in

good faith is one who buys property and pays a full and fair

price for it at the time of the purchase or before any notice of

some other persons claim on or interest in it. The rule is

settled that a buyer of real property, which is in the

possession of persons other than the seller, must be wary and

should investigate the rights of those in possession.

Otherwise, without such inquiry, the buyer can hardly be

regarded as buyer in good faith.[62]

This finding of the appellate court that the Castro spouses

were not buyers in good faith is supported by evidence.

Petitioner Virgilio Castro admitted in his testimony that

Romeo told him that Moises had given the Paco property to

them. In fact, they consulted Judge Anunciacion on who had

the right to the property Moises or Romeo. As well pointed

out by the appellate court:

In the case at bench, the said spouses have actual knowledge

of the adverse claim of plaintiff-appellant. The most

protuberant index that they are not buyers in good faith is

that before the sale, Virgilio Castro talked with Romeo Miat

on the supposed sale. Virgilio testified that together with

Romeo, Alexander and Moses Miat, they went to Judge

Anunciacion of Manila in order to find out if Romeo has a rightover the property. Romeo told Virgilio in that meeting that

Romeo has a right over the Paco property by virtue of an oral

partition and assignment. Virgilio even admitted that he

knew Romeo was in possession of the title and Romeo then

insisted that he is the owner of the property.

Virgilio Castro is further aware that plaintiff is in possession

of the property, they being neighbors. A purchaser who was

fully aware of another persons possession of the lot he

purchased cannot successfully pretend to be an innocent

purchaser for value.*63+

It is abundantly clear that the petitioners-spouses Castro did

not buy the Paco property in good faith. They have no right to

the property.

WHEREFORE, the decision of the appellate court in CA-G.R. CV

No. 43053 is affirmed. Costs against petitioners.

SO ORDERED.

G.R. No. L-55322 February 16, 1989

MOISES JOCSON, petitioner,

vs.

HON. COURT OF APPEALS, AGUSTINA JOCSON-VASQUEZ,

ERNESTO VASQUEZ, respondents.

Dolorfino and Dominguez Law Officers for petitioner.

Gabriel G. Mascardo for private respondents.

MEDIALDEA, J.:

This is a petition for review on certiorari under Rule 45 of the

Rules of Court of the decision of the Court of Appeals in CA-

G.R. No. 63474, promulgated on April 30, 1980, entitled

"MOISES JOCSON, plaintiff-appellee, versus AGUSTINA

JOCSON-VASQUEZ and ERNESTO VASQUEZ, defendant-

appellants," upholding the validity of three (3) documentsquestioned by Moises Jocson, in total reversal of the decision

of the then Court of First Instance of Cavite, Branch I, which

declared them as null and void; and of its resolution, dated

September 30, 1980, denying therein appellee's motion for

reconsideration.

Petitioner Moises Jocson and respondent Agustina Jocson-

Vasquez are the only surviving offsprings of the spouses

Emilio Jocson and Alejandra Poblete, while respondent

Ernesto Vasquez is the husband of Agustina. Alejandra

Poblete predeceased her husband without her intestate

estate being settled. Subsequently, Emilio Jocson also died

intestate on April 1, 1972.

As adverted to above, the present controversy concerns the

validity of three (3) documents executed by Emilio Jocson

during his lifetime. These documents purportedly conveyed,

by sale, to Agustina Jocson-Vasquez what apparently covers

almost all of his properties, including his one-third (1/3) share

in the estate of his wife. Petitioner Moises Jocson assails these

documents and prays that they be declared null and void and

the properties subject matter therein be partitioned between

him and Agustina as the only heirs of their deceased parents.

The documents, which were presented as evidence not by

Moises Jocson, as the party assailing its validity, but rather by

herein respondents, are the following:


8/25

1) "Kasulatan ng Bilihan ng Lupa,"

marked as Exhibit 3 (pp. 12-13, Records)

for the defendant in the court a quo,

dated July 27, 1968. By this document

Emilio Jocson sold to Agustina Jocson-

Vasquez six (6) parcels of land, all located

at Naic, Cavite, for the sum of ten

thousand P10,000.00 pesos. On the samedocument Emilio Jocson acknowledged

receipt of the purchase price, thus:

Na ngayon, alang-alang sa halagang

SAMPUNG LIBONG PISO (P10,000)

salaping Pilipino na aking tinanggap ng

buong kasiyahan loob at ang

pagkakatanggap ay aking hayagang

inaamin sa pamamagitan ng kasulatang

ito, sa aking anak na si Agustina Jocson,

na may sapat na gulang, mamamayang

Pilipino, asawa ni Ernesto Vasquez, at

naninirahan sa Poblacion, Naic, Cavite, ay

aking ipinagbile ng lubusan at kagyat at

walang ano mang pasubali ang nabanggit

na anim na pirasong lupa na nasa unang

dahon ng dokumentong ito, sa nabanggit

na Agustina Jocson, at sa kaniyang

tagapagmana o makakahalili at gayon din

nais kong banggitin na kahit na may

kamurahan ang ginawa kong pagbibile

ay dahilan sa ang nakabile ay aking anak

na sa akin at mapaglingkod, madamayin

at ma-alalahanin, na tulad din ng isa ko

pang anak na lalaki. Ang kuartang

tinanggap ko na P10,000.00, ay gagamitin

ko sa aking katandaan at mga huling

araw at sa aking mga ibang

mahahalagang pangangailangan.[Emphasis supplied]

Na nais ko ring banggitin na ang ginawa

kong ito ay hindi labag sa ano mang batas

o kautusan, sapagkat ang aking pinagbile

ay akin at nasa aking pangalan. Ang mga

lupang nasa pangalan ng aking nasirang

asawa ay hindi ko ginagalaw ni

pinakikialaman at iyon ay dapat na hatiin

ng dalawa kong anak alinsunod sa umiiral

na batas (p. 13, Records.)

2) "Kasulatan ng Ganap na Bilihan,"dated

July 27,1968, marked as Exhibit 4 (p. 14,Records). On the face of this document,

Emilio Jocson purportedly sold to

Agustina Jocson-Vasquez, for the sum of

FIVE THOUSAND (P5,000.00) PESOS, two

rice mills and a camarin (camalig) located

at Naic, Cavite. As in the first document,

Moises Jocson acknowledged receipt of

the purchase price:

'Na alang-alang sa halagang LIMANG

LIBONG PISO (P5,000.00) salaping

Pilipino na aking tinanggap ng buong

kasiyahan loob sa aking anak na Agustina

Jocson .... Na ang halagang ibinayad sa

akin ay may kamurahan ng kaunti ngunitdahil sa malaking pagtingin ko sa kaniya

... kaya at pinagbile ko sa kaniya ang mga

nabanggit na pagaari kahit na hindi

malaking halaga ... (p. 14, Records).

3) Lastly, the "Deed of Extrajudicial

Partition and Adjudication with Sale,

"dated March 9, 1969, marked as Exhibit

2 (p. 10-11, Records), whereby Emilio

Jocson and Agustina Jocson-Vasquez,

without the participation and

intervention of Moises Jocson,

extrajudicially partitioned the unsettled

estate of Alejandra Poblete, dividing thesame into three parts, one-third (1/3)

each for the heirs of Alejandra Poblete,

namely: Emilio Jocson, Agustina Jocson-

Vasquez and Moises Jocson. By the same

instrument, Emilio sold his one- third

(1/3) share to Agustin for the sum of

EIGHT THOUSAND (P8,000.00) PESOS. As

in the preceding documents, Emilio

Jocson acknowledged receipt of thepurchase price:

Now for and in consideration of the sum

of only eight thousand (P8,000.00) pesos,

which I, the herein Emilio Jocson had

received from my daughter Agustina

Jocson, do hereby sell, cede, convey and

transfer, unto the said Agustina Jocson,

her heirs and assigns, administrators and

successors in interests, in the nature of

absolute and irrevocable sale, all my

rights, interest, shares and participation,

which is equivalent to one third (1/3)

share in the properties herein mentioned

and described the one third being

adjudicated unto Agustina Jocson and

the other third (1/3) portion being the

share of Moises Jocson. (p. 11, Records).

These documents were executed before a notary public.

Exhibits 3 and 4 were registered with the Office of the

Register of Deeds of Cavite on July 29, 1968 and the transfer

certificates of title covering the properties therein in the

name of Emilio Jocson, married to Alejandra Poblete," were

cancelled and new certificates of title were issued in the name

of Agustina Jocson-Vasquez. Exhibit 2 was not registered with

the Office of the Register of Deeds.

Herein petitioner filed his original complaint (Record on

Appeal, p. 27, Rollo) on June 20,1973 with the then Court of

First Instance of Naic, Cavite (docketed as Civil Case No. TM-

531), and which was twice amended. In his Second Amended

Complaint (pp. 47-58, Record on Appeal), herein petitioner

assailed the above documents, as aforementioned, for being

null and void.

It is necessary to partly quote the allegation of petitioner in

his complaint for the reason that the nature of his causes of

action is at issue, thus:

8. [With regard the first document, that]

the defendants, through fraud, deceit,

undue pressure and influence and other

illegal machinations, were able to induce,

led, and procured their father ... to sign

[the] contract of sale ..., for the simulated

price of P10,000.00, which is a

consideration that is shocking to the

conscience of ordinary man and despite

the fact that said defendants have no

work or livelihood of their own ...; that

the sale is null and void, also, because it

is fictitious, simulated and fabricated

contract x x x (pp. 52-53, Record on

Appeal). [Emphasis supplied]

xxx xxx xxx

12. [With regards the second and third

document, that they] are null and void

because the consent of the father, Emilio

Jocson, was obtained with fraud, deceit,

undue pressure, misrepresentation and

unlawful machinations and trickeries

committed by the defendant on him; and

that the said contracts are simulated,

fabricated and fictitious, having been

made deliberately to exclude the plaintiff

from participating and with the dishonest

and selfish motive on the part of the

defendants to defraud him of his

legitimate share on said properties


9/25

[subject matter thereof]; and that

without any other business or

employment or any other source of

income, defendants who were just

employed in the management and

administration of the business of their

parents, would not have the sufficient

and ample means to purchase the saidproperties except by getting the earnings

of the business or by simulated

consideration ... (pp. 54-55, Record on

Appeal). [Emphasis supplied]

Petitioner explained that there could be no real sale between

a father and daughter who are living under the same roof,

especially so when the father has no need of money as the

properties supposedly sold were all income-producing.

Further, petitioner claimed that the properties mentioned in

Exhibits 3 and 4 are the unliquidated conjugal properties of

Emilio Jocson and Alejandra Poblete which the former,

therefore, cannot validly sell (pp. 53, 57, Record on Appeal).

As far as Exhibit 2 is concerned, petitioner questions not the

extrajudicial partition but only the sale by his father to

Agustina of the former's 1/3 share (p. 13, Rollo).

The trial court sustained the foregoing contentions of

petitioner (pp. 59-81, Record on Appeal). It declared that the

considerations mentioned in the documents were merely

simulated and fictitious because: 1) there was no showing

that Agustina Jocson-Vasquez paid for the properties; 2) the

prices were grossly inadequate which is tantamount to lack of

consideration at all; and 3) the improbability of the sale

between Emilio Jocson and Agustina Jocson-Vasquez, taking

into consideration the circumstances obtaining between the

parties; and that the real intention of the parties were

donations designed to exclude Moises Jocson from

participating in the estate of his parents. It further declaredthe properties mentioned in Exhibits 3 and 4 as conjugal

properties of Emilio Jocson and Alejandra Poblete, because

they were registered in the name of "Emilio Jocson, married

to Alejandra Poblete" and ordered that the properties subject

matter of all the documents be registered in the name of

herein petitioners and private respondents.

On appeal, the Court of Appeals in CA-G.R. No. 63474-R

rendered a decision (pp. 29-42, Rollo) and reversed that of the

trial court's and ruled that:

1. That insofar as Exhibits 3 and 4 are

concerned the appellee's complaint for

annulment, which is indisputably basedon fraud, and undue influence, is now

barred by prescription, pursuant to the

settled rule that an action for annulment

of a contract based on fraud must be

filed within four (4) years, from the

discovery of the fraud, ... which in legal

contemplation is deemed to be the date

of the registration of said document with

the Register of Deeds ... and the records

admittedly show that both Exhibits 3 and

4, were all registered on July 29, 1968,

while on the other hand, the appellee's

complaint was filed on June 20, 1973,

clearly beyond the aforesaid four-year

prescriptive period provided by law;

2. That the aforesaid contracts, Exhibits

2, 3, and 4, are decisively not simulated

or fictitious contracts, since Emilio Jocson

actually and really intended them to be

effective and binding against him, as to

divest him of the full dominion and

ownership over the properties subject of

said assailed contracts, as in fact all his

titles over the same were all cancelled

and new ones issued to appellant

Agustina Jocson-Vasquez ...;

3. That in regard to Exhibit 2, the same isvalid and subsisting, and the partition

with sale therein made by and between

Emilio Jocson and Agustina Jocson-

Vasquez, affecting the 2/3 portion of the

subject properties described therein

have all been made in accordance with

Article 996 of the New Civil Code on

intestate succession, and the appellee's

(herein petitioner) remaining 1/3 has notbeen prejudiced (pp. 41-42, Rollo).

In this petition for review, Moises Jocson raised the following

assignments of errors:

1. HAS THE RESPONDENT COURT OF

APPEALS ERRED IN CONCLUDING THAT

THE SUIT FOR THE ANNULMENT OF

CONTRACTS FILED BY PETITIONERS WITH

THE TRIAL COURT IS "BASED ON FRAUD"

AND NOT ON ITS INEXISTENCE AND

NULLITY BECAUSE OF IT'S BEING

SIMULATED OR FICTITIOUS OR WHOSE

CAUSE IS CONTRARY TO LAW, MORALSAND GOOD CUSTOMS?

II. HAS THE RESPONDENT COURT OF

APPEALS ERRED IN CONCLUDING THAT

THE COMPLAINT FILED BY PETITIONER IN

THE TRIAL COURT IS BARRED BY

PRESCRIPTION?

III. HAS THE RESPONDENT COURT OF

APPEALS ERRED IN NOT DECLARING AS

INEXISTENT AND NULL AND VOID THE

CONTRACTS IN QUESTION AND IN

REVERSING THE DECLARING DECISION OF

THE TRIAL COURT? (p. 2, Rollo)

I.

The first and second assignments of errors are related and

shall be jointly discussed.

According to the Court of Appeals, herein petitioner's causes

of action were based on fraud. Under Article 1330 of the Civil

Code, a contract tainted by vitiated consent, as when consent

was obtained through fraud, is voidable; and the action for

annulment must be brought within four years from the time

of the discovery of the fraud (Article 1391, par. 4, Civil Code),

otherwise the contract may no longer be contested. Under

present jurisprudence, discovery of fraud is deemed to havetaken place at the time the convenant was registered with the

Register of Deeds (Gerona vs. De Guzman, No. L-19060, May

29,1964, 11 SCRA 153). Since Exhibits 3 and 4 were registered

on July 29, 1968 but Moises Jocson filed his complaint only on

June 20, 1973, the Court of Appeals ruled that insofar as these

documents were concerned, petitioner's "annulment suit"

had prescribed.

If fraud were the only ground relied upon by Moises Jocson in

assailing the questioned documents, We would have

sustained the above pronouncement. But it is not so. As

pointed out by petitioner, he further assailed the deeds of

conveyance on the ground that they were without

consideration since the amounts appearing thereon as paidwere in fact merely simulated.

According to Article 1352 of the Civil Code, contracts without

cause produce no effect whatsoever. A contract of sale with a

simulated price is void (Article 1471; also Article 1409 [3]]),

and an action for the declaration of its nullity does not

prescribe (Article 1410, Civil Code; See also, Castil lo v. Galvan,

No. L-27841, October 20, l978, 85 SCRA 526). Moises Jocsons

saction, therefore, being for the judicial declaration of nullity

of Exhibits 3 and 4 on the ground of simulated price, is

imprescriptible.

II.


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For petitioner, however, the above discussion may be purely

academic. The burden of proof in showing that contracts lack

consideration rests on he who alleged it. The degree of proof

becomes more stringent where the documents themselves

show that the vendor acknowledged receipt of the price, and

more so where the documents were notarized, as in the case

at bar. Upon consideration of the records of this case, We are

of the opinion that petitioner has not sufficiently proven thatthe questioned documents are without consideration.

Firstly, Moises Jocson's claim that Agustina Jocson-Vasquez

had no other source of income other than what she derives

from helping in the management of the family business

(ricefields and ricemills), and which was insufficient to pay for

the purchase price, was contradicted by his own witness, Isaac

Bagnas, who testified that Agustina and her husband were

engaged in the buy and sell of palay and rice (p. 10, t.s.n.,

January 14, 1975). Amazingly, petitioner himself and his wife

testified that they did not know whether or not Agustina was

involved in some other business (p. 40, t.s.n., July 30, 1974; p.

36, t.s.n., May 24, 1974).

On the other hand, Agustina testified that she was engaged in

the business of buying and selling palay and rice even before

her marriage to Ernesto Vasquez sometime in 1948 and

continued doing so thereafter (p. 4, t.s.n., March 15, 1976).

Considering the foregoing and the presumption that a

contract is with a consideration (Article 1354, Civil Code), it is

clear that petitioner miserably failed to prove his allegation.

Secondly, neither may the contract be declared void because

of alleged inadequacy of price. To begin with, there was no

showing that the prices were grossly inadequate. In fact, the

total purchase price paid by Agustina Jocson-Vasquez is above

the total assessed value of the properties alleged by

petitioner. In his Second Amended Complaint, petit ioner

alleged that the total assessed value of the properties

mentioned in Exhibit 3 was P8,920; Exhibit 4, P3,500; and

Exhibit 2, P 24,840, while the purchase price paid was

P10,000, P5,000, and P8,000, respectively, the latter for the

1/3 share of Emilio Jocson from the paraphernal properties of

his wife, Alejandra Poblete. And any difference between the

market value and the purchase price, which as admitted by

Emilio Jocson was only slight, may not be so shocking

considering that the sales were effected by a father to her

daughter in which case filial love must be taken into

consideration (Alsua-Betts vs. Court of Appeals, No. L-46430-

31, April 30, 1979, 92 SCRA 332).

Further, gross inadequacy of price alone does not affect a

contract of sale, except that it may indicate a defect in theconsent, or that the parties really intended a donation or

some other act or contract (Article 1470, Civi l Code) and there

is nothing in the records at all to indicate any defect in Emilio

Jocson's consent.

Thirdly, any discussion as to the improbability of a sale

between a father and his daughter is purely speculative which

has no relevance to a contract where all the essential

requisites of consent, object and cause are clearly present.

There is another ground relied upon by petitioner in assailing

Exhibits 3 and 4, that the properties subject matter therein

are conjugal properties of Emilio Jocson and Alejandra

Poblete. It is the position of petitioner that since theproperties sold to Agustina Jocson-Vasquez under Exhibit 3

were registered in the name of "Emilio Jocson, married to

Alejandra Poblete," the certificates of title he presented as

evidence (Exhibits "E', to "J', pp. 4-9, Records) were enough

proof to show that the properties covered therein were

acquired during the marriage of their parents, and, therefore,

under Article 160 of the Civil Code, presumed to be conjugal

properties.

Article 160 of the Civil Code provides that:

All property of the marriage is presumed

to belong to the conjugal partnership,

unless it be proved that it pertainsexclusively to the husband or to the wife.

In Cobb-Perez vs. Hon. Gregorio Lantin, No. L-22320, May 22,

1968, 23 SCRA 637, 644, We held that:

Anent their claim that the shares in question are

conjugal assets, the spouses Perez adduced not a

modicum of evidence, although they repeatedly invoked

article 160 of the New Civil Code which provides that ... .

As interpreted by this Court, the party who invokes thispresumption must first prove that the property in

controversy was acquired during the marriage. In other

words, proof of acquisition during the coverture is a

condition sine qua non for the operation of the

presumption in favor of conjugal ownership. Thus in

Camia de Reyes vs. Reyes de Ilano [62 Phil. 629, 639], it

was held that "according to law and jurisprudence, it is

sufficient to prove that the Property was acquired during

the marriage in order that the same may be deemed

conjugal property." In the recent case ofMaramba vs.

Lozano, et. al. [L-21533, June 29, 1967, 20 SCRA 474],

this Court, thru Mr. Justice Makalintal, reiterated that

"the presumption under Article 160 of the Civil Code

refers to property acquired during the marriage," and

then concluded that since "there is no showing as to

when the property in question was acquired...the fact

that the title is in the wife's name alone is

determinative." Similarly, in the case at bar, since there

is no evidence as to when the shares of stock were

acquired, the fact that they are registered in the name of

the husband alone is an indication that the shares belong

exclusively to said spouse.'

This pronouncement was reiterated in the case of Ponce de

Leon vs. Rehabilitation Finance Corporation, No. L-24571,

December 18, 1970, 36 SCRA 289, and later in Torela vs.

Torela, No. 1,27843, October 11, 1979, 93 SCRA 391.

It is thus clear that before Moises Jocson may validly invoke

the presumption under Article 160 he must first present proof

that the disputed properties were acquired during the

marriage of Emilio Jocson and Alejandra Poblete. The

certificates of title, however, upon which petitioner rests his

claim is insufficient. The fact that the properties were

registered in the name of "Emilio Jocson, married to Alejandra

Poblete" is no proof that the properties were acquired during

the spouses' coverture. Acquisition of title and registration

thereof are two different acts. It is well settled that

registration does not confer title but merely confirms one

already existing (See Torela vs. Torela, supra). It may be that

the properties under dispute were acquired by Emilio Jocson

when he was still a bachelor but were registered only after his

marriage to Alejandra Poblete, which explains why he wasdescribed in the certificates of title as married to the latter.

Contrary to petitioner's position, the certificates of title show,

on their face, that the properties were exclusively Emilio

Jocson's, the registered owner. This is so because the words

"married to' preceding "Alejandra Poblete' are merely

descriptive of the civil status of Emilio Jocson Litam v. Rivera,

100 Phil. 354; Stuart v. Yatco, No. L-16467, April 27, 1962, 4

SCRA 1143; Magallon v. Montejo, G.R. No. L-73733, December

16, 1986, 146 SCRA 282). In other words, the import from the

certificates of title is that Emilio Jocson is the owner of the

properties, the same having been registered in his name

alone, and that he is married to Alejandra Poblete.

We are not unmindful that in numerous cases We consistently

held that registration of the property in the name of only one

spouse does not negate the possibility of it being conjugal

(See Bucoy vs. Paulino, No. L-25775, April 26, 1968, 23 SCRA

248). But this ruling is not inconsistent with the above

pronouncement for in those cases there was proof that the

properties, though registered in the name of only one spouse,

were indeed conjugal properties, or that they have been

acquired during the marriage of the spouses, and therefore,

presumed conjugal, without the adverse party having

presented proof to rebut the presumption (See Mendoza vs-

Reyes, No. L-31618, August 17, 1983, 124 SCRA 154).

In the instant case, had petitioner, Moises Jocson, presented

sufficient proof to show that the disputed properties wereacquired during his parents' coverture. We would have ruled


11/25

that the properties, though registered in the name of Emilio

Jocson alone, are conjugal properties in view of the

presumption under Article 160. There being no such proof,

the condition sine qua non for the application of the

presumption does not exist. Necessarily, We rule that the

properties under Exhibit 3 are the exclusive properties of

Emilio Jocson.

There being no showing also that the camarin and the two

ricemills, which are the subject of Exhibit 4, were conjugal

properties of the spouses Emilio Jocson and Alejandra

Poblete, they should be considered, likewise, as the exclusive

properties of Emilio Jocson, the burden of proof being on

petitioner.

ACCORDINGLY, the petition is DISMISSED and the decision of

the Court of Appeals is AFFIRMED.

SO ORDERED.

G.R. No. L-28589 January 8, 1973

RAFAEL ZULUETA, ET AL., plaintiffs-appellees,

vs.

PAN AMERICAN WORLD AIRWAYS, INC., defendant-

appellant.

Alfredo L. Benipayo for plaintiffs-appellee Rafael Zulueta and

Carolina Zulueta.

Justo L. Albert for plaintiff-appellee Telly Albert Zulueta.

V.E. del Rosario and Associates and Salcedo, Del Rosario, Bito,

Misa and Lozada for defendant-appellant.

R E S O L U T I O N

CONCEPCION, C.J.:

Both parties in this case have moved for the reconsideration

of the decision of this Court promulgated on February 29,

1972. Plaintiffs maintain that the decision appealed from

should be affirmed in toto. The defendant, in turn, prays that

the decision of this Court be "set aside ... with or without a

new trial, ... and that the complaint be dismissed, with costs;

or, in the alternative, that the amount of the award embodiedtherein be considerably reduced." .

Subsequently to the filing of its motion for reconsideration,

the defendant filed a "petition to annul proceedings and/or to

order the dismissal of plaintiffs-appellees' complaint" upon

the ground that "appellees' complaint actually seeks the

recovery of only P5,502.85 as actual damages, because, for

the purpose of determining the jurisdiction of the lower court,

the unspecified sums representing items of alleged damages,

may not be considered, under the settled doctrines of this

Honorable Court," and "the jurisdiction of courts of first

instance when the complaint in the present case was filed on

Sept. 30, 1965" was limited to cases "in which the demand,

exclusive of interest, or the value of the property in

controversy amounts to more than ten thousand pesos" and

"the mere fact that the complaint also prays for unspecified

moral damages and attorney's fees, does not bring the action

within the jurisdiction of the lower court."

We find no merit in this contention. To begin with, it is not

true that "the unspecified sums representing items or other

alleged damages, may not be considered" for the purpose

of determining the jurisdiction of the court "under the

settled doctrines of this Honorable Court." In fact, not a single

case has been cited in support of this allegation.

Secondly, it has been held that a clam for moral damages is

one not susceptible of pecuniary estimation.1

In fact, Article

2217 of the Civil Code of the Philippines explicitly provides

that "(t)hough incapable of pecuniary computation, moral

damages may be recovered if they are the proximate result of

the defendant's wrongful act or omission." Hence, "(n)o proof

pecuniary loss necessary" pursuant to Article 2216 of the

same Code "in order that moral ... damages may be

adjudicated." And "(t)he assessment of such damages ... is left

to the discretion of the court" - said article adds - "according

to the circumstances of each case." Appellees' complaint is,

therefore, within the original jurisdiction of courts of firstinstance, which includes "all civil actions in which the subject

of the litigation is not capable of pecuniary estimation."2

Thirdly, in its answer to plaintiffs' original and amended

complainants, defendant had set up a counterclaim in the

aggregate sum of P12,000, which is, also, within the original

jurisdiction of said courts, thereby curing the alleged defect if

any, in plaintiffs' complaint. 3

We need not consider the jurisdictional

controversy as to the amount the

appellant sues to recover because the

counterclaim interposed establishes the

jurisdiction of the District Court.Merchants' Heat & Light Co. v. James B.

Clow & Sons, 204 U.S. 286, 27 S. Ct. 285,

51 L. Ed. 488; O. J. Lewis Mercantile Co. v.

Klepner, 176 F. 343 (C.C.A. 2), certiorari

denied 216 U.S. 620, 30 S Ct. 575, 54 L.

Ed. 641. ... .4

... courts have said that "when the

jurisdictional amount is in question, the

tendering of a counterclaim in an amount

which in itself, or added to the amount

claimed in the petition, makes up a sum

equal to the amount necessary to the

jurisdiction of this court, jurisdiction is

established, whatever may be the state

of the plaintiff's complaint." American

Sheet & Tin Plate Co. v. Winzeler (D.C.)

227 F. 321, 324. 5

Thus, inAgo v. Buslon,6

We held:

... . Then, too, petitioner's counterclaim for P37,000.00

was, also, within the exclusive original jurisdiction of

the latter courts, and there are ample precedents to the

effect that "although the original claim involves less

than the jurisdictional amount, ... jurisdiction can be

sustained if the counterclaim (of the compulsory type)"

such as the one set up by petitioner herein, based

upon the damages allegedly suffered by him in

consequence of the filing of said complaint "exceeds

the jurisdictional amount." (Moore Federal Practice,

2nd ed. [1948], Vol. 3, p. 41; Ginsburg vs. Pacific Mutual

Life Ins. Co. of California, 69 Fed. [2d] 97; Home Life Ins.

Co. vs. Sipp., 11 Fed. [2d]474; American Sheet & Tin

Plate Co. vs. Winzeler [D.C.], 227 Fed. 321, 324; Brix vs.

People's Mutual Life Ins. Co., 41 P. 2d. 537, 2 Cal. 2d.

446; Emery vs. Pacific Employees Ins. Co., 67 P. 2d.

1046, 8 Cal. 2d. 663).

Needless to say, having not only failed to question the

jurisdiction of the trial court either in that court or in this

Court, before the rendition of the latter's decision, and even

subsequently thereto, by filing the aforementioned motion forreconsideration and seeking the reliefs therein prayed for

but, also, urged both courts to exercise jurisdiction over the

merits of the case, defendant is now estopped from

impugning said jurisdiction. 7

Before taking up the specific questions raised in defendant's

motion for reconsideration, it should be noted that the same

is mainly predicated upon the premise that plaintiffs' version

is inherently incredible, and that this Court should accept the

theory of the defense to the effect that petitioner was off-

loaded because of a bomb-scare allegedly arising from his

delay in boarding the aircraft and subsequent refusal to open

his bags for inspection. We need not repeat here the reasons

given in Our decision for rejecting defendant's contention and

not disturbing the findings of fact of His Honor, the Trial


12/25

Judge, who had the decided advantage denied to Us of

observing the behaviour of the witnesses in the course of the

trial and found those of the plaintiffs worthy of credence, not

the evidence for the defense.

It may not be amiss however, to stress the fact that, in his

written report, made in transit from Wake to Manila or

immediatelyafter the occurrence and before the legalimplications or consequences thereof could have been the

object of mature deliberation, so that it could, in a way, be

considered as part of the res gestae Capt. Zentner stated

that Zulueta had been off-loaded "due to drinking" and

"belligerent attitude," thereby belying the story of the defense

about said alleged bomb-scare, and confirming the view that

said agent of the defendant had acted out of resentment

because his ego had been hurt by Mr. Zulueta's adamant

refusal to be bullied by him. Indeed, had there been an iota of

truth in said story of the defense, Capt. Zentner would have

caused every one of the passengers to be frisked or searched

and the luggage of all of them examined as it is done now

before resuming the flight from Wake Island. His failure to

do so merely makes the artificious nature of defendant's

version more manifest. Indeed, the fact that Mrs. Zulueta and

Miss Zulueta were on board the plane shows beyond doubt

that Mr. Zulueta could not possibly have intended to blow it

up.

The defense tries to explain its failure to introduce any

evidence to contradict the testimony of Mr. Zulueta as to why

he had gone to the beach and what he did there, alleging that,

in the very nature of things, nobody else could have witnessed

it. Moreover, the defense insists, inter alia, that the testimony

of Mr. Zulueta is inherently incredible because he had no idea

as to how many toilets the plane had; it could not have taken

him an hour to relieve himself in the beach; there were eight

(8) commodes at the terminal toilet for men ; if he felt the

need of relieving himself, he would have seen to it that thesoldiers did not beat him to the terminal toilets; he did not tell

anybody about the reason for going to the beach, until after

the plane had taken off from Wake.

We find this pretense devoid of merit. Although Mr. Zulueta

had to look for a secluded place in the beach to relieve

himself, beyond the view of others, defendant's airport

manager, whom Mr. Zulueta informed about it, soon afterthe

departure of the plane, could have forthwith checkedthe

veracity of Mr. Zulueta's statement by asking him to indicate

the specific place where he had been in the beach and then

proceeding thereto for purposes of verification.

Then, again, the passenger of a plane seldom knows howmany toilets it has. As a general rule, his knowledge is limited

to the toiletsfor the class first class or tourist class in

which he is. Then, too, it takes several minutes for the

passengers of big aircrafts, like those flying from the U.S. to

the Philippines, to deplane. Besides, the speed with which a

given passenger may do so depends, largely, upon the

location of his seat in relation to the exit door. He cannot go

over the heads of those nearer than he thereto. Again, Mr.

Zulueta may have stayed in the toilet terminal for some time,

expecting one of the commodes therein to be vacated soon

enough, before deciding to go elsewhere to look for a place

suitable to his purpose. But he had to walk, first, from the

plane to the terminal building and, then, after vainly waiting

therein for a while, cover a distance of about 400 yards

therefrom to the beach, and seek there a place not visible bythe people in the plane and in the terminal, inasmuch as the

terrain at Wake Island is flat. What is more, he must have had

to takeoff part, at least, of his clothing, because, without the

facilities of a toilet, he had to wash himself and, then, dry

himself up before he could be properly attired and walk back

the 400 yards that separated him from the terminal building

and/or the plane. Considering, in addition to the foregoing,

the fact that he was not feeling well, at that time, We are not

prepared to hold that it could not have taken him around an

hour to perform the acts narrated by him.

But, why asks the defendant did he not reveal the same

before the plane took off? The record shows that, even before

Mr. Zulueta had reached the ramp leading to the plane, Capt.Zentner was already demonstrating at him in an intemperate

and arrogant tone and attitude ("What do you think you are?),

thereby impelling Mr. Zulueta to answer back in the same

vein. As a consequence, there immediately ensued an

altercation in the course of which each apparently tried to

show that he could not be cowed by the other. Then came the

order of Capt. Zentner to off-load all of the Zuluetas, including

Mrs. Zulueta and the minor Miss Zulueta, as well as their

luggage, their overcoats and other effects handcarried bythem; but, Mr. Zulueta requested that the ladies be allowed

to continue the trip. Meanwhile, it had taken time to locate

his four (4) pieces of luggage. As a matter of fact, only three

(3) of them were found, and the fourth eventually remained

in the plane. In short, the issue between Capt. Zentner and

Mr. Zulueta had been limited to determining whether the

latter would allow himself to be browbeaten by the former. In

the heat of the altercation, nobody had inquired about the

cause of Mr. Zulueta's delay in returning to the plane, apart

from the fact that it was rather embarrassing for him to

explain, in the presence and within the hearing of the

passengers and the crew, then assembled around them, why

he had gone to the beach and why it had taken him some

time to answer there a call of nature, instead of doing so in

the terminal building.

Defendant's motion for reconsideration assails: (1) the

amount of damages awarded as excessive; (2) the propriety of

accepting as credible plaintiffs' theory; (3) plaintiffs' right to

recover either moral or exemplary damages; (4) plaintiffs'

right to recover attorney's fees; and (5) the non-enforcement

of the compromise agreement between the defendant and

plaintiff's wife, Mrs. Zulueta. Upon the other hand, plaintiffs'

motion for reconsideration contests the decision of this Court

reducing the amount of damages awarded by the trial court to

approximately one-half thereof, upon the ground, not only

that, contrary to the findings of this Court, in said decision,

plaintiff had not contributed to the aggravation of his

altercation or incident with Capt. Zentner by reacting to

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