fbfb

Republic of the Philippines

Court of Appeals
Cebu City

TWENTIETH DIVISION

FELISA CODILLA Vda. de CA-G.R.CEB-CV No. 02376

ARDIENTE, CHERRY
ARDIENTE NABLE, Members:
RICARDO ARDIENTE, JR.,
ROSALINA ARDIENTE HERNANDO, R.P.L.,
DIACOMA, EDUARDO Chairperson,
ARDIENTE, BIENVENIDA MANAHAN, C.S. &
ARDIENTE, JUANITO DIY, M. E. S., JJ.
ARDIENTE, AVELIENO
ARDIENTE, and NARCISA
ARDIENTE RABASANO,
Plaintiffs-appellants,

- versus -

MANUEL CABUENAS and Promulgated:

AGAPITO CINCO,
Defendants-appellees. January 28, 2013

DECISION

DIY, J.:

Before Us is an appeal under Rule 44 of the 1997 Rules

of Civil Procedure assailing the Decision 1 dated September 14,
2006, of Branch 5, Regional Trial Court (RTC), Cebu City in
Civil Case No. CEB-25963, which dismissed plaintiffs-
appellants complaint for Reconveyance and Partition against
defendants-appellees.
1
Record, pp. 191-196.
 The factual antecedents of the case are as follows:

Subject of the controversy is a parcel of land known as Cadastral

Lot 16304-CAD-12 Ext., measuring 52,732 square meters and located
in Pong-ol, Malubog, Cebu City.

On December 20, 2000, a complaint 2 for reconveyance and

partition was filed by plaintiff-appellant Felisa Codilla Vda. De Ardiente
(Felisa) and her eight (8) children (plaintiffs-appellants Cherry, Ricardo
Jr., Rosalina, Eduardo, Bienvenida, Juanito, Avelieno, and Narcisa)
alleging that: 1) the subject land is conjugal property of Felisa and her
husband Ricardo Ardiente who died sometime in 1961; 2) said property
was bought from Icoy Daclan; plaintiffs-appellants have been in
possession thereof since the end of the Second World War; 3) said
property is covered by Tax Declaration No. 120150 in the name of
Felisa Ardiente; 4) on or about August 10, 2000, Felisa discovered that
Tax Declaration No. 20150 was cancelled and a new one, i.e., Tax
Declaration No. 120151 was issued in the name of defendants-
appellees; 5) upon inquiry, plaintiffs-appellants learned that the transfer
of the tax declaration in the name of defendants-appellees was by virtue
of a deed of sale purportedly executed by Felisa on March 26, 1962 in
favor of defendants-appellees; 6) Tax Declaration No. 120151 in the
name of defendants-appellees was later cancelled and was replaced by
Tax Declaration No. GR-2K-01-009-00116 in the name of defendant-
appellee Manuel Cabuenas solely. Plaintiffs-appellants pray that the
deed of sale dated March 26, 1962 be declared null and void. In the
alternative, they also pray to have it declared as an equitable mortgage
or to have the subject property partitioned between the parties, with
one-half share to defendants-appellees and the other half to plaintiffs-
appellants.

Defendants-appellees filed their Answer With Counterclaim 3

claiming that they bought the property from Felisa on March 26, 1962,
as evidenced by a notarized Deed of Absolute Sale where Felisa affixed
her thumbmark. From that time on, defendants-appellees have been in
continuous, peaceful and adverse possession of the property. According
to them, Manuel Cabuenas acquired the portion pertaining to Agapito
2
Ibid. pp. 1-9.
3
Ibid. pp. 15-23.
Cinco by virtue of a Deed of Absolute Sale dated June 5, 1967. Thus,
Tax Declaration No. 120151 in the names of defendants-appellees was
cancelled and Tax Declaration No. GR-2K-01-009-00 solely in the name
of defendant Manuel Cabuenas was issued.

After trial, the RTC rendered the assailed Decision dismissing the
complaint for want of a valid cause of action, relying on the following
conclusions:

1. The deed of sale executed by plaintiff Felisa Codilla vda. De Ardiente,

dated March 26, 1962, is valid and being a notarized document, its due
execution is presumed. xxx

2. The same document clearly shows that it is a deed of sale, not mortgage;

3. Plaintiff Felisa Codilla vda. De Ardiente is estopped from asserting that

subject property is conjugal because she made defendants believe that
land in the deed of sale that is her paraphernal property. xxx

4. On the issue of good faith of defendants, Article 1127 of the Civil Code
states that good faith of the possessor consists in the reasonable belief
that the person from whom he received the thing was the owner thereof,
and could transmit his ownership.

5. On the issue of prescription and laches, Article 1137 of the Civil Code
states that ownership and other real rights over immovables prescribe
through uninterrupted adverse possession thereof for thirty years, without
need of title or of good faith. Plaintiffs are guilty of laches for having
asserted that they are also the owners of subject property only after thirty
nine (39) years. The defense of laches applies independently of
4
prescription.

Hence, plaintiffs-appellants come before this Court, raising the

following assignment of errors: 5

1. THE LOWER COURT GRAVELY ERRED IN HOLDING THAT

THERE TRANSPIRED BETWEEN PARTIES A CONTRACT OF SALE.

2. EVEN ASSUMING THAT THERE WAS A CONTRACT OF SALE,

THE LOWER COURT GRAVELY ERRED IN REFUSING AND/OR FAILING

4
Rollo, p.43.
5
Ibid.. pp. 23-24.
 TO CONSIDER THAT THE ALLEGED SELLER FELISA COULD NOT
HAVE DISPOSED OF THE CONJUGAL PROPERTY WITHOUT THE
CONSENT OF CO-OWNERS, HER CHILDREN.

3. THE LOWER COURT GRAVELY ERRED IN HOLDING THAT

PRESCRIPTION HAS RUN IN FAVOR OF DEFENDANTS-APPELLEES
AND AGAINST THE OTHER CO-OWNERS, THE PLAINTIFF-APPELLANT-
CHILDREN.

4. THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT

AND RENDERING JUDGMENT IN FAVOR OF DEFENDANTS-
APPELLEES-APPELLEES. [sic]

The Ruling of the Court

We find for plaintiffs-appellants.

Plaintiffs-appellants argue that the RTC made wrong conclusions

because no sale transaction took place between Felisa and defendants-
appellees. According to them, Felisa can not be expected to have
understood the import and consequences of the alleged Deed of
Absolute Sale because she is unschooled and she could neither read
nor write. From what Felisa could recall, what transpired between the
parties was a simple mortgage known as prenda en dono, which was
common in their community in the 1960s.

As above-quoted, the RTC upheld the validity of the Deed of

Absolute Sale because it was a notarized instrument which enjoys the
presumption of due execution. However, the RTC failed to consider that
clear and convincing evidence to the contrary can overcome this
presumption.6

A perusal of the Deed of Absolute Sale dated March 26, 1962 7

reveals that it is entirely written in English, and instead of a signature
on top of Felisas name, there appears a thumb mark. Felisa claims
that she is unschooled and she can neither read nor write. This claim

6
Pan Pacific Industrial Sales Co., Inc. v. Court of Appeals, G.R. No. 125283, February 10, 2006.
7
Record, p. 8
is sufficiently supported by evidence on record. The testimony of Felisa,
translated into English, is as follows:

(Felisa while on direct examination by Atty. Sarausos)

Q - By the way, will you please tell the court, what is your
educational attainment, Madam Witness?

A - I have no formal education.

COURT:
Q - What about your husband?

A - He has no formal education also, Your Honor, being the son of

poor persons.

ATTY. SARAUSOS:
Q - Just for the purpose of clarity Madame witness, does that mean
that you cannot possibly read?

A - I cannot read.

Q - And you cannot also write?

A - Yes, Maam, I cannot also write.

COURT:
Q - Even, a cebuano [sic] dialect?

A -Yes Your Honor.

Q -So, you are not an elector?

A -No Your Honor, because I cannot read.8

Even defendant-appellee Agapito Cinco confirmed during re-direct

examination that the notary public requested Felisa Codilla to sign the
document of sale but Felisa does not know how to sign and the notary
public let her affixed [sic] her thumbmark.9

Indeed, as the persons seeking to enforce the contract of sale, it is

8
TSN dated December 19, 2001, pp. 10-11.
9
TSN dated March 16, 2004, p. 20.
incumbent upon defendants-appellees to prove that the terms of the
Deed of Absolute Sale, couched in the English language, were explained
to Felisa, a person who is unlettered and can neither read nor write.
This duty is mandated by Article 1332 of the Civil Code. 10

In Leonardo v. Court of Appeals,11 the Supreme Court elucidated:

According to the late civil law authority, Arturo M. Tolentino, the

(old) rule that a party is presumed to know the import of a
document to which he affixes his signature and is bound thereby,
has been altered by Art. 1332 of the Civil Code. The provision states
that [w]hen one of the parties is unable to read, or if the contract is in a
language not understood by him, and mistake or fraud is alleged, the
person enforcing the contract must show that the terms thereof have
been fully explained to the former.

Article 1332 was a provision taken from american [sic] law,

necessitated by the fact that there continues to be a fair number of
people in this country without the benefit of a good education or
documents have been written in English or Spanish. The provision was
intended to protect a party to a contract disadvantaged by
illiteracy, ignorance, mental weakness or some other handicap. It
contemplates a situation wherein a contract is entered into but the
consent of one of the contracting parties is vitiated by mistake or
fraud committed by the other.

Thus, in case one of the parties to a contract is unable to read

and fraud is alleged, the person enforcing the contract must show
that the terms thereof have been fully explained to the former.
Where a party is unable to read, and he expressly pleads in his reply
that he signed the voucher in question without knowing (its) contents
which have not been explained to him, this plea is tantamount to one
of mistake or fraud in the execution of the voucher or receipt in
question and the burden is shifted to the other party to show that
the former fully understood the contents of the document; and if
he fails to prove this, the presumption of mistake (if not fraud)
stands unrebutted and controlling.

(Emphasis supplied)

10
Article 1332. When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is
alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former.
11
G.R. No. 125485, September 13, 2004.
 Defendants-appellees failed to present any proof showing that
Felisa was made to understand the import of the terms of the Deed of
Absolute Sale. When defendant-appellee Agapito Cinco took the witness
stand and described what transpired during the preparation and signing
of the Deed of Absolute Sale, he did not mention anything about the
contents of the Deed of Absolute Sale being explained to Felisa:

COUNSEL TO WITNESS: (Agapito Cinco on direct examination by his

counsel, Attty. Duterte)

Q : Now, showing to you this document a title [sic] Deed of Absolute

Sale executed by Felisa Codilla in favor of Agapito Cinco and Manuel
Cabuenas xxx?

xxx xxx xxx

Q : Please look this over and tell the court if this is the document?

A : Yes, this is the one.

xxx xxx xxx

COURT: Is it in English?

ATTY. DUTERTE: Yes, Your Honor.

COUNSEL TO WITNESS:

Q : Before the execution of this document what did you agree with
Felisa Codilla with respect to the preparation of the deed and the
payment of the price?

A : Yes, after the deed of absolute sale has been prepared and also
transferred [sic] of the tax declaration, after that we had an
agreement with Felisa Codilla and our lawyers told us that the
document was already prepared, the lawyer told us to just come
back this [sic] afternoon because he has another important matter,
after Felisa Codilla affixed her thumbmark the lawyer said you just
come back at 1:00 oclock in the afternoon because he has to take
care of his lunch.

Q : Did you know Alberto Sanjurjo the notary public who made it?

A : I do not know him because it was Bernardo Cinco who brought

us to his office.
 xxx xxx xxx

Q : Where were you at the time Felisa A. Codilla place [sic] the
thumbmark/affixed her thumbmark on the document?

A : I was [by] her side when she affixed her thumbmark.

Q : Now, when you went back to the office of Sanjurjo after you took
your lunch, what did he do?

A : When we get inside the office and after Sanjurjo has took
[sic] his lunch he also requested the other party to affix their
thumbmark, after that we go home.12

(Emphasis supplied)

It is apparent from the foregoing testimony of Agapito Cinco that

the preparation and signing of the Deed of Absolute Sale was completed
without ensuring that Felisa understood the true tenor of the document.
In fact, he mentioned about the contents of the Deed of Absolute Sale
being translated by the lawyer to the parties only when prompted by the
RTC judge:

COURT TO WITNESS:
Q : The deed of sale is [in] English, so, you did not understand the
content thereof?

A : That document was translated to us by the lawyer, Your Honor.

Q : When you say us, who were the persons to whom the contents
of the document was translated?

A : Manuel Cabuenas, Your Honor.

Q : Only the two of you?

A : And Felisa Codilla was also there, Your Honor, during the
preparation and signed [sic].13

(Emphasis supplied)

12
TSN dated November 11, 2003, pp. 8-12.
13
Ibid., pp. 15-16.
 And yet Agapito Cinco contradicted himself when he admitted
during the cross-examination that the parties were not even present
when the Deed of Absolute Sale was actually prepared:

(Agapito Cino during cross-examination by Atty. Largo)

COUNSEL TO WITNESS:

Q : xxx in other words, sir, you were not around when the document
of sale was prepared because your lawyer told you, merely told you that
the document was already prepared?

A :

Q : You said, our lawyer told us that the document was already
prepared

ATTY. DUTERTE: On the other hand, Your Honor, may we clarify

because on the other hand he said that, they were just following Felisa
and Bernardo to the lawyer.

ATTY. LARGO: Thats why, they were following, thats why Im asking
him, Your Honor, whether or not this means that he was not
present when the document was prepared?

COURT: Witness, may answer.

COUNSEL TO WINESS:

Q : You said, you were following?

A : It was the lawyer who prepared the document but we are not
present during that time, Your Honor.14

(Emphasis supplied)
It is, therefore, clear that defendants-appellees failed to show
compliance with the mandate of Article 1332 of the Civil Code and the
presumption of mistake in favor of Felisa thus remains unrebutted.

It is also worth mentioning that evidence on record casts doubt on

the claims of defendants-appellees that Felisa sold the property to them
with the representation that it was her paraphernal property. Tax
Declaration No. 1618415 shows that subject property was previously
14
TSN dated March 16, 2004, pp. 12-13.
15
Record, p. 92.
declared for tax purposes in the name of Ricardo Ardiente, Felisas late
husband. Tax Declaration No. 16184 was later cancelled and replaced
by Tax Declaration No. 12015016 in the name of Felisa on March 26,
1962, the same date which appears as the date of execution of the Deed
of Absolute Sale between Felisa and defendants-appellees. Tax
Declaration No. 120150 in the name of Felisa was thereafter replaced by
Tax Declaration No. 12015117 in the name of Agapito Cinco and Manuel
Cabuenas, which appears to have been issued also on March 26,
1962.18

From the foregoing documentary exhibits, it can not be said that

defendants-appellees acted on the representation of Felisa that the
property being sold was paraphernal property in view of the existence of
a tax declaration registered in the name of Felisas husband, Ricardo
Ardiente. Defendants-appellees can not be said to have relied on the tax
declaration in Felisas name because such tax declaration (Tax
Declaration No. 120150) was only issued on March 26, 1962, the same
day the parties executed the deed of sale. Apart from the anomalous
circumstances surrounding the issuance of a tax declaration in the
name of defendants-appellees, it also bears emphasis that both of them
admitted having known Felisa personally because they were neighbors. 19
Both defendants-appellees also categorically admitted having known
that Felisa has children.20

Anent the issue of whether prescription has run in favor of

defendants-appellees, it is important to distinguish between an action
for annulment and one for declaration of nullity of an agreement. The
former has a four-year prescriptive period while the latter is
imprescriptible. Thus:

An action for annulment of contract is one filed where consent is

vitiated by lack of legal capacity of one of the contracting parties, or by
mistake, violence, intimidation, undue influence or fraud. By its very
nature, annulment contemplates a contract which is voidable, that is,
valid until annulled. Such contract is binding on all the contracting
parties until annulled and set aside by a court of law. It may be
ratified. An action for annulment of contract has a four-year
16
Ibid., pp. 168-169.
17
Ibid., p. 162.
18
Ibid., p. 163.
19
TSN dated February 15, 2005, p. 7 (for Manuel Cabuenas) and TSN dated March 16, 2004, p. 14 (for Agapito Cinco).
20
TSN dated March 28, 2005, p. 5 (for Manuel Cabuenas) and TSN dated March 16, 2004, p. 14 (for Agapito Cinco).
 prescriptive period.

On the other hand, an action for declaration of nullity of contract

presupposes a void contract or one where all of the requisites prescribed
by law for contracts are present but the cause, object or purpose is
contrary to law, morals, good customs, public order or public policy,
prohibited by law or declared by law to be void. Such contract as a rule
produces no legal and binding effect even if it is not set aside by direct
legal action. Neither may it be ratified. An action for the declaration of
nullity of contract is imprescriptible.21

In their complaint, plaintiffs-appellants are praying that the Deed

of Absolute Sale dated March 26, 1962 be declared null and void, or in
the alternative, that said deed of sale be declared as an equitable
mortgage.22 While the complaint is denominated as one for
Reconveyance and Partition and it seeks that the Deed of Absolute
Sale be declared null and void, it can not be considered as one for
declaration of nullity of contract, which is imprescriptible. The relevant
facts surrounding the questioned transaction between the parties
contemplate a voidable contract. Contracts where consent is given by
mistake are considered voidable.

Article 1390 of the Civil Code categorically declares:

x x x. The following contracts are voidable or annullable, even

though there may have been no damage to the contracting parties:

xxx xxx xxx

(2) Those where the consent is vitiated by mistake, violence,

intimidation, undue influence, or fraud.

The allegations in the complaint reveal that Felisa never intended a

sale between her and defendants-appellees. Felisa was of the belief that
the transaction between them was one of mortgage. Thus, based on the
allegations of the complaint and the evidence adduced during trial, the
intention of the parties was not to enter into a contract of sale. The
consent of Felisa in the Deed of Absolute Sale was vitiated by mistake.
21
Supra., note 11.
22
Record, p. 4.
 Under Article 1391 of the Civil Code, an action for annulment of
contract prescribes in four (4) years. In cases of intimidation, violence or
undue influence, the prescriptive period shall begin from the time the
defect of the consent ceases and in case of mistake or fraud, from the
time of the discovery of the same.

In the instant case, it was only on or about August 10, 2000

when Felisa discovered that the tax declaration over the property was
already in the name of defendants-appellees. The complaint was filed by
plaintiffs-appellants four (4) months later (December 20, 2000), which is
very much within the four-year prescriptive period.

In their complaint, plaintiffs-appellants also prayed for the award

of attorneys fees and litigation expenses.

Well-settled in jurisprudence is the rule that the award of

attorneys fees is more of an exception rather than the general rule.
Even if a claimant is compelled to litigate with third persons or to incur
expenses to protect his rights, attorneys fees may still not be awarded
where no sufficient showing of bad faith could be reflected in a partys
persistence in a case other than an erroneous conviction of the
righteousness of his cause.23 For this reason, the claim for attorneys
fees and litigation expenses is denied.

WHEREFORE, the instant appeal is partly GRANTED. The RTC

Decision dated September 14, 2006 is hereby REVERSED and SET
ASIDE and a new one entered:

1. ANNULLING the Deed of Absolute Sale dated March 26,

1962 and considering it instead as a real estate mortgage over
Cadastral Lot 16304-CAD-12 entered into to secure the
payment of P775.00. Plaintiffs-appellants are given one (1) year
from the finality of this Decision within which to pay said
amount to defendants-appellees Agapito Cinco and Manuel
Cabuenas, at 12% interest per annum computed from the filing
23
Moreno vs. San Sebastian College, G.R. No. 175283, March 28, 2008.
 of the complaint until its full payment.24

2. Ordering the City Assessor of Cebu City to CANCEL Tax

Declaration No. 120150 in the name of Felisa Codilla Vda. De
Ardiente and its derivatives, Tax Declaration No. 120151 in the
names of defendants-appellees Agapito Cinco and Manuel
Cabuenas, and Tax Declaration No. GR-2K-01-009-00 in the
name of defendant-appellee Manuel Cabuenas.

3. Ordering the City Assessor of Cebu City to ISSUE a new

tax declaration in the name of the Heirs of Ricardo Ardiente;

SO ORDERED.

ORIGINAL SIGNED
MARIA ELISA SEMPIO DIY
Associate Justice

WE CONCUR:

ORIGINAL SIGNED
RAMON PAUL L. HERNANDO
Associate Justice

ORIGINAL SIGNED
CARMELITA SALANDANAN MANAHAN
Associate Justice

24
The amount of P775.00 appears as the consideration in the Deed of Absolute Sale (Record, p.8). Considering that the Deed of
Absolute Sale shall be considered a mortgage contract, plaintiffs-appellants as mortgagors must pay said amount to satisfy the
mortgage debt.
 CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby

certified that the conclusions in the above decision were reached in
consultation before the case was assigned to the writer of the opinion of
the Court.

ORIGINAL SIGNED
RAMON PAUL L. HERNANDO
Associate Justice
Chairperson, Twentieth Division