G.R. No. L-12471 April 13, 1959
These two appellants did not make it appears in the promissory
ROSARIO L. DE BRAGANZA, ET AL., petitioners,
vs.
FERNANDO F. DE VILLA ABRILLE, respondent.
Oscar M. Herrera for petitioners.
R. P. Sarandi and F. Valdez Anama for respondents.
BENGZON, J.:
Rosario L. de Braganza and her sons Rodolfo and Guillermo petition for
review of
the Court of Appeal's decision whereby they were required solidarily to
pay
Fernando F. de Villa Abrille the sum of P10,000 plus 2 % interest from
October 30,
1944.
The above petitioners, it appears, received from Villa Abrille, as a loan,
on October
30, 1944 P70,000 in Japanese war notes and in consideration thereof,
promised in
writing (Exhibit A) to pay him P10,000 "in legal currency of the P. I. two
years after
the cessation of the present hostilities or as soon as International
Exchange has
been established in the Philippines", plus 2 % per annum.
Because payment had not been made, Villa Abrille sued them in March
1949.
In their answer before the Manila court of first Instance, defendants
claimed to have
received P40,000 only instead of P70,000 as plaintiff asserted. They
also averred
that Guillermo and Rodolfo were minors when they signed the
promissory note
Exhibit A. After hearing the parties and their evidence, said court
rendered judgment,
which the appellate court affirmed, in the terms above described.
There can be no question about the responsibility of Mrs. Rosario L.
Braganza
because the minority of her consigners note release her from liability;
since it is a
personal defense of the minors. However, such defense will benefit
her to the extent
of the shares for which such minors may be responsible, (Art. 1148,
Civil Code). It is
not denied that at the time of signing Exhibit A, Guillermo and Rodolfo
Braganza
were minors-16 and 18 respectively. However, the Court of Appeals
found them
liable pursuant to the following reasoning:
. . . .
note that
they were not yet of legal age. If they were really to their creditor,
they should
have appraised him on their incapacity, and if the former, in spite of
the
information relative to their age, parted with his money, then he
should be
contended with the consequence of his act. But, that was not the case.
Perhaps defendants in their desire to acquire much needed money,
they
readily and willingly signed the promissory note, without disclosing the
legal
impediment with respect to Guillermo and Rodolfo. When minor, like in
the
instant case, pretended to be of legal age, in fact they were not, they
will not
later on be permitted to excuse themselves from the fulfillment of the
obligation contracted by them or to have it annulled. (Mercado, et al.
vs.
Espiritu, 37 Phil., 215.) [Emphasis Ours.]
We cannot agree to above conclusion. From the minors' failure to
disclose their
minority in the same promissory note they signed, it does not follow as
a legal
proposition, that they will not be permitted thereafter to assert it. They
had no
juridical duty to disclose their inability. In fact, according to Corpuz
Juris Secundum,
43 p. 206;
. . . . Some authorities consider that a false representation as to age
including
a contract as part of the contract and accordingly hold that it cannot
be the
basis of an action in tort. Other authorities hold that such
misrepresentation
may be the basis of such an action, on the theory that such
misrepresentation
is not a part of, and does not grow out of, the contract, or that the
enforcement of liability for such misrepresentation as tort does not
constitute
an indirect of enforcing liability on the contract. In order to hold infant
liable,
however, the fraud must be actual and not constructure. It has been
held that
his mere silence when making a contract as to age does not constitute
a
fraud which can be made the basis of an action of decit. (Emphasis June 1951, four years had not yet completely elapsed from October
Ours.) 1947.
The fraud of which an infant may be held liable to one who contracts Furthermore, there is reason to doubt the pertinency of the 4-years
with him period fixed by
in the belief that he is of full age must be actual not constructive, and Article 1301 of the Civil Code where minority is set up only as a
mere defense to an action,
failure of the infant to disclose his age is not sufficient. (27 American without the minors asking for any positive relief from the contract. For
Jurisprudence, p. 819.) one thing, they
The Mecado case1 cited in the decision under review is different have not filed in this case an action for annulment.2 They merely
because the interposed an
document signed therein by the minor specifically stated he was of excuse from liability.
age; here Exhibit Upon the other hand, these minors may not be entirely absolved from
A contained no such statement. In other words, in the Mercado case, monetary
the minor was responsibility. In accordance with the provisions of Civil Code, even if
guilty of active misrepresentation; whereas in this case, if the minors their written
were guilty at contact is unenforceable because of non-age, they shall make
all, which we doubt it is of passive (or constructive) misrepresentation. restitution to the
Indeed, there extent that they have profited by the money they received. (Art. 1340)
is a growing sentiment in favor of limiting the scope of the application There is
of the Mercado testimony that the funds delivered to them by Villa Abrille were used
ruling, what with the consideration that the very minority which for their
incapacitated from support during the Japanese occupation. Such being the case, it is but
contracting should likewise exempt them from the results of fair to hold
misrepresentation. that they had profited to the extent of the value of such money, which
We hold, on this point, that being minors, Rodolfo and Guillermo value has
Braganza could not been authoritatively established in the so-called Ballantine Schedule:
be legally bound by their signatures in Exhibit A. in October
It is argued, nevertheless, by respondent that inasmuch as this 1944, P40.00 Japanese notes were equivalent to P1 of current
defense was Philippine money.
interposed only in 1951, and inasmuch as Rodolfo reached the age of Wherefore, as the share of these minors was 2/3 of P70,000 of
majority in P46,666.66, they
1947, it was too late to invoke it because more than 4 years had should now return P1,166.67.3Their promise to pay P10,000 in
elapsed after he Philippine currency,
had become emancipated upon reaching the age of majority. The (Exhibit A) can not be enforced, as already stated, since they were
provisions of minors incapable
Article 1301 of the Civil Code are quoted to the effect that "an action of binding themselves. Their liability, to repeat, is presently declared
to annul a without regard
contract by reason of majority must be filed within 4 years" after the of said Exhibit A, but solely in pursuance of Article 1304 of the Civil
minor has Code.
reached majority age. The parties do not specify the exact date of Accordingly, the appealed decision should be modified in the sense
Rodolfo's birth. It that Rosario
is undenied, however, that in October 1944, he was 18 years old. On Braganza shall pay 1/3 of P10,000 i.e., P3,333.334 plus 2% interest
the basis of from October
such datum, it should be held that in October 1947, he was 21 years 1944; and Rodolfo and Guillermo Braganza shall pay jointly5 to the
old, and in same creditor the
October 1951, he was 25 years old. So that when this defense was total amount of P1,166.67 plus 6% interest beginning March 7, 1949,
interposed in when the
complaint was filed. No costs in this instance.
 with intent to defraud their creditors, preliminary attachment was also
sought.
Answering, defendants averred that they obtained four loans from
plaintiff in the total
amount of P26,500.00, of which P5,620.00 had been paid, leaving a
balance of
P20,880.00; that plaintiff charged and deducted from the loan
usurious interests
thereon, at rates of 2% and 2.5% per month, and, consequently,
plaintiff has no
cause of action against defendants and should not be permitted to
recover under the
law. A counterclaim for P2,000.00 attorney's fees was interposed.
Plaintiff filed on June 25, 1964 an answer to the counterclaim,
specifically denying
under oath the allegations of usury.
After trial, decision was rendered, on November 10, 1965. The court
found that there
remained due from defendants an unpaid principal amount of
P20,287.50; that
plaintiff charged usurious interests, of which P1,048.15 had actually
been deducted
in advance by plaintiff from the loan; that said amount of P1,048.15
should therefore
be deducted from the unpaid principal of P20,287.50, leaving a
balance of
P19,247.351 still payable to the plaintiff. Said court held that
ANGEL JOSE WAREHOUSING CO., INC., plaintiff-appellee, notwithstanding the
vs. usurious interests charged, plaintiff is not barred from collecting the
CHELDA ENTERPRISES and DAVID SYJUECO, defendants- principal of the
appellants. loan or its balance of P19,247.35. Accordingly, it stated, in the
Luis A. Guerrero for plaintiff-appellee. dispositive portion of
Burgos and Sarte for defendants-appellants. the decision, thus:
BENGZON, J.P., J.: WHEREFORE, judgment is hereby rendered, ordering the defendant
Plaintiff corporation filed suit in the Court of First Instance of Manila on partnership to pay to the plaintiff the amount of P19,247.35, with legal
May 29, 1964 interest
against the partnership Chelda Enterprises and David Syjueco, its thereon from May 29, 1964 until paid, plus an additional sum of
capitalist partner, P2,000.00 as
for recovery of alleged unpaid loans in the total amount of P20,880.00, damages for attorney's fee; and, in case the assets of defendant
with legal partnership
interest from the filing of the complaint, plus attorney's fees of be insufficient to satisfy this judgment in full, ordering the defendant
P5,000.00. Alleging David
that post dated checks issued by defendants to pay said account were Syjueco to pay to the plaintiff one-half (1/2) of the unsatisfied portion
dishonored, of this
that defendants' industrial partner, Chellaram I. Mohinani, had left the judgment.
country, and With costs against the defendants.1wph1.t
that defendants have removed or disposed of their property, or are Appealing directly to Us, defendants raise two questions of law: (1) In
about to do so, a loan with
usurious interest, may the creditor recover the principal of the loan? innocent one may claim what he has given, and shall not be bound to
(2) Should comply
attorney's fees be awarded in plaintiff's favor? with his promise.
To refute the lower court's decision which is based on the doctrine laid Since, according to the appellants, a usurious loan is void due to
down by this illegality of cause
Court in Lopez v. El Hogar Filipino, 47 Phil. 249, holding that a contract or object, the rule of pari delicto expressed in Article 1411, supra,
of loan with applies, so that
usurious interest is valid as to the loan but void as to the usurious neither party can bring action against each other. Said rule, however,
interest, appellants
appellants argue that in light of the New Civil Code provisions said add, is modified as to the borrower, by express provision of the law
doctrine no (Art. 1413, New
longer applies. In support thereof, they cite the case decided by the Civil Code), allowing the borrower to recover interest paid in excess of
Court of Appeals the interest
in Sebastian v. Bautista, 58 O.G. No. 15, p. 3146. allowed by the Usury Law. As to the lender, no exception is made to
The Sebastian case was an action for recovery of a parcel of land. The the rule; hence,
Court of First he cannot recover on the contract. So they continue the New
Instance therein decided in plaintiff's favor, on the ground that the so- Civil Code
called sale provisions must be upheld as against the Usury Law, under which a
with pacto de retro of said land was in fact only an equitable loan with
mortgage. In affirming usurious interest is not totally void, because of Article 1961 of the New
the trial court, the writer of the opinion of the Court of Appeals went Civil Code,
further to state that: "Usurious contracts shall be governed by the Usury Law and
the view that the loan secured by said mortgage was usurious in other special
nature, and, thus, laws, so far as they are not inconsistent with this Code." (Emphasis
totally void. Such reasoning of the writer, however, was not concurred ours.)
in by the other We do not agree with such reasoning. Article 1411 of the New Civil
members of the Court, who concurred in the result and voted for Code is not new;
affirmance on the it is the same as Article 1305 of the Old Civil Code. Therefore, said
grounds stated by the trial court. Furthermore, the affirmance of the provision is no
existence of warrant for departing from previous interpretation that, as provided in
equitable mortgage necessarily implies the existence of a valid the Usury Law
contract of loan, (Act No. 2655, as amended), a loan with usurious interest is not totally
because the former is an accessory contract to the latter. void only as
Great reliance is made by appellants on Art. 1411 of the New Civil to the interest.
Code which True, as stated in Article 1411 of the New Civil Code, the rule of pari
states: delicto applies
Art. 1411. When the nullity proceeds from the illegality of the cause or where a contract's nullity proceeds from illegality of the cause or
object object of said
of the contract, and the act constitutes criminal offense, both parties contract.
being However, appellants fail to consider that a contract of loan with
in pari delicto, they shall have no action against each other, and both usurious interest
shall be consists of principal and accessory stipulations; the principal one is to
prosecuted. Moreover, the provisions of the Penal Code relative to the pay the debt;
disposal of effects or instruments of a crime shall be applicable to the the accessory stipulation is to pay interest thereon.2
things And said two stipulations are divisible in the sense that the former can
or the price of the contract. still stand
This rule shall be applicable when only one of the parties is guilty; but without the latter. Article 1273, Civil Code, attests to this: "The
the renunciation of the
principal debt shall extinguish the accessory obligations; but the interest paid in excess of that allowed by law, which the Usury Law
waiver of the latter already provided
shall leave the former in force." for, but to add that the same can be recovered "with interest thereon
The question therefore to resolve is whether the illegal terms as to from the date of
payment of payment."
interest likewise renders a nullity the legal terms as to payments of The foregoing interpretation is reached with the philosophy of usury
the principal legislation in
debt. Article 1420 of the New Civil Code provides in this regard: "In mind; to discourage stipulations on usurious interest, said stipulations
case of a are treated as
divisible contract, if the illegal terms can be separated from the legal wholly void, so that the loan becomes one without stipulation as to
ones, the latter payment of
may be enforced." interest. It should not, however, be interpreted to mean forfeiture even
In simple loan with stipulation of usurious interest, the prestation of of the
the debtor to pay principal, for this would unjustly enrich the borrower at the expense of
the principal debt, which is the cause of the contract (Article 1350, the lender.
Civil Code), is not Furthermore, penal sanctions are available against a usurious lender,
illegal. The illegality lies only as to the prestation to pay the stipulated as a further
interest; deterrence to usury.
hence, being separable, the latter only should be deemed void, since The principal debt remaining without stipulation for payment of
it is the only interest can thus be
one that is illegal. recovered by judicial action. And in case of such demand, and the
Neither is there a conflict between the New Civil Code and the Usury debtor incurs in
Law. Under the delay, the debt earns interest from the date of the demand (in this
latter, in Sec. 6, any person who for a loan shall have paid a higher case from the
rate or greater filing of the complaint). Such interest is not due to stipulation, for
sum or value than is allowed in said law, may recover the whole there was none, the
interest paid. The same being void. Rather, it is due to the general provision of law that
New Civil Code, in Article 1413 states: "Interest paid in excess of the in obligations
interest allowed to pay money, where the debtor incurs in delay, he has to pay interest
by the usury laws may be recovered by the debtor, with interest by way of
thereon from the damages (Art. 2209, Civil Code). The court a quo therefore, did not err
date of payment." Article 1413, in speaking of "interest paid in excess in ordering
of the interest defendants to pay the principal debt with interest thereon at the legal
allowed by the usury laws" means the whole usurious interest; that is, rate, from the
in a loan of date of filing of the complaint.
P1,000, with interest of P20% per annum P200 for one year, if the As regards, however, the attorney's fees, the court a quo stated no
borrower pays basis for its
said P200, the whole P200 is the usurious interest, not just that part award, beyond saying that as a result of defendants' refusal to pay the
thereof in amount of
excess of the interest allowed by law. It is in this case that the law P19,247.35 notwithstanding repeated demands, plaintiff was obliged
does not to retain the
allow division. The whole stipulation as to interest is void, since services of counsel. The rule as to attorney's fees is that the same are
payment of said not
interest is the cause or object and said interest is illegal. The only recoverable, in the absence of stipulation. Several exceptions to this
change effected, rule are
therefore, by Article 1413, New Civil Code, is not to provide for the provided (Art. 2208, Civil Code). Unless shown to fall under an
recovery of the exception, the act of
plaintiff in engaging counsel's services due to refusal of defendants to 2. That sometime in October, 1950, the herein plaintiff and her
pay his husband
demand, does not justify award of attorney's fees (Estate of Buan v. Celestino Teves who died in a plane crash with the late President
Camaganacan, Ramon
L-21569, Feb. 28, 1966). Defendants, moreover, had reason to resist Magsaysay ... occupied a portion of land of the Diliman Estate
the claim, Subdivision,
since there was yet no definite ruling of this Court on the point of law known as the Quezon Memorial Grove, belonging to the defendant
involved herein PHHC, said
in light of the New Civil Code. Said award should therefore be deleted. portion of land with an area of 252 square meters, more or less, is
WHEREFORE, with the modification that the award of attorney's fees in known and
plaintiff's designated as Lot 9, Block K-70 of the Diliman Estate Subdivision
favor is deleted therefrom, and the correction of the clerical error as to located in
the principal Diliman, Quezon City.
still recoverable, from P19,247.35 to P19,239.35, the appealed 3. That since then (October, 1950) the herein plaintiff and her
judgment is hereby deceased husband
affirmed. No costs. So ordered. have continuously occupied said portion of land and have constructed
thereon
their residential house with an assessed value of P3,250.00 and which
still
remains existing to the present time.
4. That, because at the time that portion of the Diliman Estate
Subdivision known
as the Quezon Memorial Grove was not intended for subdivision and
distribution
the occupants thereof, including the herein plaintiff and her deceased
husband,
have joined themselves together and made repeated requests and
insistent
representations with the officials of the PHHC and, with the help and
assistance
of the Social Welfare Administration, the Board of Directors of the
defendant
PHHC acceded to the occupants' petition and by virtue of Resolution
ENCARNACION TEVES, plaintiff-appellant, No. 21,
vs. Fiscal Year 1951-52, adopted on September 19, 1951, converted said
THE PEOPLE'S HOMESITE AND HOUSING CORPORATION, ET AL., estate into
ZALDIVAR, J.: a subdivision for distribution and sale to the actual occupants thereof
From the order of the Court of First Instance of Quezon City dismissing who are
her complaint qualified to acquire residential lots under the rules and regulations of
against defendants People's Homesite and Housing Corporation and the
spouses Melisenda defendant PHHC.
L. Santos and Cesar L. Santos, in Civil Case No. Q-6904, plaintiff 5. That, after due investigation conducted sometime before August,
Encarnacion Teves 1951, the
interposed the present appeal. then Chief of the Sales Division of the defendant PHHC found the
The pertinent averments of the complaint in this case, filed on January husband of the
9, 1963, read as herein plaintiff to be the actual occupant of said Lot 9, Block K-70 of
follows: the Diliman
Estate Subdivision and, having been found to be likewise qualified to influential politician, was able to secure the approval of her application
acquire and the
said lot by purchase it was recommended that same be awarded to consequent execution in her favor of the deed of sale of the lot in
him. question,....
6. That after the death of the plaintiff's husband on March 17, 1957, 9. That, upon registration of the deed of sale ... with the Office of the
the herein Register of
plaintiff filed another application in her own name to purchase said Lot Deeds of Quezon City, said office, on January 23, 1962, issued the
9, Block corresponding Transfer Certificate of Title No. 59796 in favor of the
K-70 of the Diliman Estate Subdivision and thereafter made repeated defendant
and Melisenda L. Santos.
insistent requests and representation with the officials and personnel 10. That the deed of sale ... and Transfer Certificate of Title No.
of the Sales 59796 ... in the
Division of the defendant PHHC to process and forward her application name of the defendant Melisenda L. Santos are null and void and of no
for effect
approval by the Board of Directors of the said defendant corporation whatsoever by reason of the fact that the same were secured by
but said means of acts
officials and personnel of the Sales Division of defendant corporation and omissions amounting to fraud and misrepresentations, and
in flagrant political
disregard and violation of their duties and with evident bad fifth influence, aside from the fact that said sale was made in violation of
prejudicial to the the
rights of the plaintiff deliberately refused to act on the requests and established policy, rules and regulations of the defendant PHHC,
insistent particularly
representation of the plaintiff. Resolution No. 21, fiscal year 1951-52 of the Board of Directors of the
7. That on or about February 23, 1961, the defendant Melisenda L. defendant
Santos, corporation.
through her attorney-in-fact Estela Leyva, filed with the Sales Division 11. That, as a consequence of the anomalous and illegal transaction
of the between the
defendant PHHC her application to purchase said Lot 9, Block K-70 of defendants with respect to the lot in question the herein plaintiff was
the unlawfully
Diliman Estate Subdivision, and in spite of the fact that the officials deprived of her rights to acquire the same thus causing her great
and mental anguish
personnel of the said office have actual knowledge that said lot has for which she is entitled for a judgment for moral and exemplary
long been damages ... actual damages ... attorneys fees and ... incidental
occupied and applied for by the herein plaintiff they deliberately expenses...."
concealed from The complaint prayed, among others, that judgment be rendered
the latter the filing of the application of the defendant Melisenda L. declaring the deed of sale in favor, and the transfer certificate of title
Santos, thus issued in the name, of defendant
depriving said plaintiff of her legal rights to oppose the approval of Melisenda L. Santos null and void, and directing defendant PHHC to
said execute in favor of plaintiff the corresponding deed of sale over the lot
application and to bring to the higher authorities her preferential in controversy on installment basis under the terms and conditions
rights to acquire prescribed by the rules and regulations of said corporation. On
the said lot in question. February 6 and 12, 1963, defendant PHHC and defendants Melisenda
8. That by reason of the negligent acts and deliberate refusal of the L. Santos and Cesar L. Santos, respectively, filed separate motions to
officials and dismiss, both motions based principally upon the ground that the
personnel of the defendant PHHC to act accordingly on the plaintiff's complaint states no cause of action. On February 16, 1963, the lower
application, court issued an order dismissing plaintiff's complaint. The order of
... the defendant Melisenda L. Santos, with the help and assistance of dismissal stated that as plaintiff was not a party to the deed of sale
an
executed between the PHHC and defendant Melisenda L. Santos, she
cannot maintain an action to annul the same.
Plaintiff's motion for reconsideration of the order of February 16, 1963
having been
denied, she brought the present appeal directly to this Court, on a
question of law,
contending that "the lower court erred in dismissing the plaintiff-
appellant's complaint on the alleged ground of failure to state a cause
of action against the defendantsappellees." We find merit in plaintiff's
appeal. A cause of action is defined as "an act or omission of one party
in violation of the legal
right or rights of the other; and its essential elements are legal right of
the plaintiff,
correlative obligation of the defendant, and act or omission of the
defendant in violation of said legal right."1 The rule is well-settled that
when the motion to dismiss a complaint is based upon the ground that
it states no cause of action, the sufficiency of the cause of action can
only be determined on the basis of the facts alleged in the complaint,2
and admitting the facts as alleged, whether or not the court can
render a valid judgment against the defendant based upon said facts
as prayed for in the complaint.3 The paragraphs of the complaint,
hereinbefore quoted, contain allegations of facts which show that the
plaintiff had acquired a right a preferential right to buy Lot 9, Block
K-70 of the Diliman Estate Subdivision, that the defendants were
aware of plaintiff's right, and that defendants had committed acts in
violation of plaintiff's rights; and such being the case, the plaintiff is
entitled to a relief as against the defendants. The right asserted by the
plaintiff, in her complaint, has for its basis the policy that was adopted
by the PHHC, an instrumentality of the government, as embodied in its
Resolution No. 21, Fiscal Year 1951-52, the resolutory part of which
provides as follows:
RESOLVED, that in the sale of lots in the former Quezon Memorial
Grove site,
the occupants therein be given the first chance in purchasing said lots;
Provided,
however, that no sale shall be made to any person, whether an
occupant or an
outsider unless previously investigated and cleared by the MIS; and
Provided
further, that nothing in this resolution shall be construed to affect nor
encroach
the rights and prerogatives of the corporation.4 The complaint alleges
that since October, 1950 plaintiff and her husband had been
occupying Lot 9, Block K-70 of the Diliman Estate Subdivision (formerly
known as the Quezon Memorial Grove), and they had built thereon
their residential house with an assessed value of P3,250.00; that upon
due investigation conducted sometime before August, 1951 the Chief
of the Sales Division of the PHHC found plaintiff's husband to be the
actual occupant of said land and having been found to be qualified to
acquire said
land by purchase it was recommended that the lot be sold to plaintiff's
husband; that plaintiff's husband died on March 17, 1957, before the
lot was actually sold to him, and so plaintiff, as successor in interest of
her husband, filed an application in her own name to purchase the lot
in question; that thereafter plaintiff made repeated and insistent
requests and representations with the officials and personnel of the
Sales Division of the PHHC to process and forward her application to
the Board of Directors of the PHHC for approval, but said officials and
personnel ignored the requests and representations of the plaintiff;
that instead of respecting plaintiff's preferential right, and in spite of
the fact that the officials and personnel of the PHHC knew that plaintiff
was the actual occupant of the lot, and without giving notice to the
plaintiff that a party was applying to purchase the same lot, the PHHC
sold the same lot to defendant Melisenda L. Santos who applied for it
only on February 23, 1961 through an agent; that on January 12, 1962,
a deed of sale of the lot with the full balance actually paid was
executed, and shortly thereafter, or on January 23, 1962, Transfer
Certificate of Title No. 95976 covering the lot was issued by the
Register of Deeds of Quezon City in favor of said defendant. The
complaint contains allegations that the plaintiff was fraudulently
deprived of her
preferential right to buy the lot in question, and that defendant
Melisenda L. Santos was able to secure the approval of her application
to purchase the lot and the execution of the deed of sale in her favor
through the help of an influential politician. A perusal of the complaint
would elicit the position of the plaintiff in her case against the
defendants, to wit: she had a right which she had acquired pursuant to
the very policy promulgated by the defendant PHHC; she was deprived
of the enjoyment of right when defendant PHHC sold the lot in
question to defendant Melisenda L. Santos who was never an occupant
of the lot and who applied to purchase said lot through an agent much
later; the sale of the lot to the defendant Melisenda L. Santos was
made without her knowledge, much less with her consent, and was in
violation of the policy of the PHHC, so that the sale should not be
given effect; that she was deprived of her rights through fraud and/or
bad faith, on the part of the officials and personnel of the PHHC and of
defendant Melisenda L. Santos; that defendant Melisenda L. Santos
had taken advantage over her by availing of the help of an influential
politician; and that she had suffered damages.
In contending that the complaint states no cause of action, the
defendants urge that
since plaintiff is not a party to the deed of sale which was executed
between the PHHC and defendant Melisenda L. Santos, and neither
was there in said deed any stipulation referring to plaintiff, the plaintiff
cannot maintain an action to annul the deed of sale. The defendants
cite the provision of Article 1397 of the Civil Code which states that
"The action for the annulment of contract may be instituted by all who
are thereby obliged principally or subsidiarily ...", and point out that
because in the deed of sale plaintiff was not party and she has no
obligation under that deed, either principally or subsidiarily, she
cannot maintain the action to annull said deed. The lower court
sustained the contention of the defendants.
We note, however, in reading the complaint, that the plaintiff is
seeking the declaration of the nullity of the deed of sale not as a party
in the deed, or because she is obliged principally or subsidiarily under
the deed, but because she has an interest that is affected by the deed.
This Court has held that a person who is not a party obliged principally
or subsidiarily in a contract may exercise an action for nullity of the
contract if he is prejudice in his rights with respect to one of the
contracting parties, and can show the detriment which would
positively result to him from the contract in which he had no
intervention.5 Indeed, in the case now before Us, the complaint
alleges facts which show that plaintiff suffered detriment as a result of
the deed of sale entered into by and between defendant PHHC and
defendant Melisenda L. Santos. We believe that the plaintiff should be
given a chance to present evidence to establish that she suffered
detriment and that she is entitled to relief.
We gather from the reading of the complaint that plaintiff seeks the
declaration of the nullity of the deed of sale because it was executed
contrary to public policy and that fraud was exercised by defendants
PHHC and Melisenda L. Santos in its execution. The complaint,
therefore, had posed before the trial court the question of whether
that deed of sale was null and void because it was executed in
violation of a public policy, and whether that contract was executed in
fraud of a third person.
The ruling of this Court in the case of Huerta vs. Acosta, G.R. No. L-
20497, promulgated on January 31, 1966, has relevance to the
question of whether the plaintiff in the case now before Us has a cause
of action based on policy, in connection with the sale of residential
lands owned by the government, of giving preferential right to
purchase the land to persons who are prior actual occupants of the
land. In this case it appears: that long before the Government acquired
the Fabie Estate through expropriation proceedings under Republic Act
1162 for the purpose of subdividing the same and reselling the
subdivided lots to the tenants or occupants or other persons qualified
under the law to acquire said lots, Antonia Vda. de Huerta had
occupied a portion of the aforementioned estate. In order to carry out
the function of subdividing the Fabie Estate into small lots the Land
Tenure Administration prepared a plan showing the subdivided lots
and allotted the subdivided lots to the tenants or occupants. Antonia
Vda. de Huerta filed an application to purchase Lot No. 14 and an
agreement to sell covering said lot
was entered into between her and the Land Tenure Administration.
Dionisio H. Acosta filed an application to buy Lot No. 13, which adjoins
Lot 14 that was sold to Huerta, and an outright sale was executed in
Acosta's favor and Transfer Certificate of Title No. 50570 was issued in
his name. Finding later that the septic tank of her house and other
improvements previously put up by her are found in a portion of Lot
13, Huerta requested the Land Tenure Administration to award to her
Lot 13 in addition to Lot 14, or that portion of Lot 13 where her septic
tank is found be segregated and made part of Lot inasmuch as said
portion was never occupied by Acosta. Huerta's request was denied.
Since Huerta continued occupying the disputed portion of Lot 13,
Acosta filed an action before the Court of First Instance of Manila to
recover possession and ownership of that portion of Lot 13 occupied
by Huerta. Huerta, in her answer, set up the defense that she had a
preferential right to purchase the disputed portion because she was
the bona fide tenant or occupant thereof. The trial court decided the
case in favor of Huerta, and adjudicated to her the portion of Lot 13
where her septic tank was located,
with an area of thirty square meters. The Court of Appeals reversed
the decision of the trial court, but on appeal to this Court the decision
of the Court of Appeals was reversed.
This Court said:
It is admitted that the disputed portion of Lot 13 containing 30 sq. m.
had never
been occupied by Dionisio Acosta, for even long before the
Government
acquired the Fabie Estate through expropriation proceedings said
portion had
been occupied by Antonia Vda. de Huerta on which she had
constructed a house
of strong materials and other permanent improvements including a
septic tank,
and that portion formed part of the lot which she was then leasing
from the
former owner of the Fabie Estate. Huerta, therefore, had the
preferential right to
purchase the disputed portion from the Government under the
provisions of
Republic Act No. 1162, as amended, particularly Section 3 which
provides that
the estate should be subdivided into small lots ... and shall be sold at
cost only to
tenants or occupants.... (Emphasis supplied)
It is our considered view that the complaint in the case at bar states a
cause of action, because it contains allegations clearly showing
violation of plaintiff's rights by the defendants. It can be said that at
least, the complaint alleges facts which show violation of plaintiff's
rights under the provisions of Chapter 2 of the Preliminary Title of the
Civil Code, on the subject of human relations. It is alleged in the
complaint that the defendants had not acted in good faith; that the
employees of the defendant PHHC, in the performance of their duties,
had not given the plaintiff her due; that the defendants had wilfully
caused injury to the plaintiff in violation of a policy of the PHHC which
is a government instrumentality; and that the plaintiff, in her dealings
with defendant PHHC,
found herself at a disadvantage because she was up against
defendant Melisenda L.
Santos who had availed of the help of an influential politician a
circumstance which may justify a recourse to the court for the
protection of her right.6 If these allegations are supported by
evidence, it is obvious that plaintiff is entitled to relief.
Accordingly, We hold that the complaint in the case at bar states a
cause of action.
WHEREFORE, the order appealed from is set aside, and this case is
remanded to the
court a quo for further proceedings, with costs at this instance against
defendantsappellees
CONCHITA LIGUEZ, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, MARIA NGO VDA. DE
LOPEZ, ET
AL., respondents.
REYES, J.B.L., J.:
From a decision of the Court of Appeals, affirming that of the Court of
First Instance of Davao dismissing her complaint for recovery of land,
Conchita Liguez has resorted to this Court, praying that the aforesaid
decision be reversed on points of law. We granted certiorari on
October 9, 1956.
The case began upon complaint filed by petitioner-appellant against
the widow and heirs of the late Salvador P. Lopez to recover a parcel of
51.84 hectares of land, situated in barrio Bogac-Linot, of the
municipality of Mati, Province of Davao. Plaintiff averred to be its legal
owner, pursuant to a deed of donation of said land, executed in her
favor by the late owner, Salvador P. Lopez, on 18 May 1943. The
defense interposed was that the donation was null and void for having
an illicit causa or consideration, which was the plaintiff's entering into
marital relations with Salvador P. Lopez, a married man; and that the
property had been adjudicated to the appellees as heirs of Lopez by
the court of First Instance, since 1949.
The Court of Appeals found that the deed of donation was prepared by
the Justice of the Peace of Mati, Davao, before whom it was signed and
ratified on the date aforesaid. At the time, the appellant Liguez was a
minor, only 16 years of age. While the deed recites
That the DONOR, Salvador P. Lopez, for and in the consideration of his
love and
affection for the said DONEE, Conchita Liguez, and also for the good
and
valuable services rendered to the DONOR by the DONEE, does by
these
presents, voluntarily give grant and donate to the said donee, etc.
(Paragraph 2,
Exhibit "A") the Court of Appeals found that when the donation was
made, Lopez had been living with the parents of appellant for barely a
month; that the donation was made in view of the desire of Salvador P.
Lopez, a man of mature years, to have sexual relations with appellant
Conchita Liguez; that Lopez had confessed to his love for appellant to
the instrumental witnesses, with the remark that her parents would
not allow Lopez to live with her unless he first donated the land in
question; that after the donation, Conchita Liguez and Salvador P.
Lopez lived together in the house that was built upon the latter's
orders, until Lopez was killed on July 1st, 1943, by some guerrillas who
believed him to be pro-Japanese.
It was also ascertained by the Court of Appeals that the donated land
originally belonged to the conjugal partnership of Salvador P. Lopez
and his wife, Maria Ngo; that the latter had met and berated Conchita
for living maritally with her husband, sometime during June of 1943;
that the widow and children of Lopez were in possession of the land
and made improvements thereon; that the land was assessed in the
tax rolls first in the name of Lopez and later in that of his widow.; and
that the deed of donation was never recorded. Upon these facts, the
Court of Appeals held that the deed of donation was inoperative, and
null and void (1) because the husband, Lopez, had no right to donate
conjugal property to the plaintiff appellant; and (2) because the
donation was tainted with illegal cause or consideration, of which
donor and donee were participants.
Appellant vigorously contends that the Court of First Instance as well
as the Court of Appeals erred in holding the donation void for having
an illicit cause or consideration. It is argued that under Article 1274 of
the Civil Code of 1889 (which was the governing law in 1948, when the
donation was executed), "in contracts of pure beneficence the
consideration is the liberality of the donor", and that liberality per se
can never be illegal, since it is neither against law or morals or public
policy.
The flaw in this argument lies in ignoring that under Article 1274,
liberality of the do or is deemed causa in those contracts that are of
"pure" beneficence; that is to say, contracts designed solely and
exclusively to procure the welfare of the beneficiary, without any
intent of producing any satisfaction for the donor; contracts, in other
words, in which the idea of self-interest is totally absent on the part of
the transferor. For this very reason, the same Article 1274 provides
that in remuneratory contracts, the consideration is the service or
benefit for which the remuneration is given; causa is not liberality in
these cases because the contract or conveyance is not made out of
pure beneficence, but "solvendi animo." In consonance with this view,
this Supreme Court in Philippine Long Distance Co. vs. Jeturian * G.R.
L-7756, July 30, 1955, like the Supreme Court of Spain in its decision of
16 Feb. 1899, has ruled that bonuses granted to employees to excite
their zeal and efficiency, with consequent benefit for the employer, do
not constitute donation having liberality for a consideration. Here the
facts as found by the Court of Appeals (and which we can not vary)
demonstrate that in making the donation in question, the late
Salvador P. Lopez was not moved exclusively by the desire to benefit
appellant Conchita Liguez, but also to secure her cohabiting with him,
so that he could gratify his sexual impulses. This is clear from the
confession of Lopez to the witnesses Rodriguez and Ragay, that he
was in love with appellant, but her parents would not agree unless he
donated the land in question to her. Actually, therefore, the donation
was but one part of an onerous transaction (at least with
appellant's parents) that must be viewed in its totality. Thus
considered, the conveyance was clearly predicated upon an illicit
causa. Appellant seeks to differentiate between the alleged liberality
of Lopez, as causa for the donation in her favor, and his desire for
cohabiting with appellant, as motives that impelled him to make the
donation, and quotes from Manresa and the jurisprudence of this Court
on the distinction that must be maintained between causa and
motives (De Jesus vs. Urrutia and Co., 33 Phil. 171). It is well to note,
however that Manresa himself (Vol. 8, pp. 641-642), while maintaining
the distinction and upholding the noperativeness of the motives of
the parties to determine the validity of the contract, expressly excepts
from the rule those contracts that are conditioned upon the
attainment of the motives of either party.
. . . distincion importantisima, que impide anular el contrato por la sola
influencia
de los motivos a no ser que se hubiera subordinando al cumplimiento
de estos
como condiciones la eficacia de aquel.
The same view is held by the Supreme Court of Spain, in its decisions
of February 4,
1941, and December 4, 1946, holding that the motive may be
regarded as causa when it predetermines the purpose of the contract.
In the present case, it is scarcely disputable that Lopez would not have
conveyed the property in question had he known that appellant would
refuse to cohabit with him; so that the cohabitation was an implied
condition to the donation, and being unlawful, necessarily tainted the
donation itself.
The Court of Appeals rejected the appellant's claim on the basis of the
well- known rule
"in pari delicto non oritur actio" as embodied in Article 1306 of 1889
(reproduced in Article 1412 of the new Civil Code):
ART. 1412. If the act in which the unlawful or forbidden cause consists
does not
constitute a criminal offense, the following rules shall be observed:
(1) When the fault is on the part of both contracting parties, neither
may recover
what he has given by virtue of the contract, or demand the
performance of the
other's undertaking;
(2) When only one of the contracting parties is at fault, he cannot
recover, what
he has given by reason of the contract, or ask for fulfillment of what
has been
promised him. The other, who is not at fault, may demand the return
of what he
has given without any obligation to comply with his promise.
In our opinion, the Court of Appeals erred in applying to the present
case the pari
delicto rule. First, because it can not be said that both parties here had
equal guilt when we consider that as against the deceased Salvador P.
Lopez, who was a man advanced in years and mature experience, the
appellant was a mere minor, 16 years of age, when the donation was
made; that there is no finding made by the Court of Appeals that she
was fully aware of the terms of the bargain entered into by and Lopez
and her parents; that, her acceptance in the deed of donation (which
was authorized by Article 626 of the Old Civil Code) did not necessarily
imply knowledge of conditions and terms not set forth therein; and
that the substance of the testimony of the instrumental witnesses is
that it was the appellant's parents who insisted on the donation before
allowing her to live with Lopez. These facts are more suggestive of
seduction than of immoral bargaining on the part of appellant. It must
not be forgotten that illegality is not presumed, but must be duly and
adequately proved. In the second place, the rule that parties to an
illegal contract, if equally guilty, will not be aided by the law but will
both be left where it finds them, has been interpreted by this Court as
barring the party from pleading the illegality of the bargain either as a
cause of action or as a defense. Memo auditor propriam turpitudinem
allegans. Said this Court in Perez vs. Herranz, 7 Phil. 695-696:
It is unnecessary to determine whether a vessel for which a certificate
and
license have been fraudulently obtained incurs forfeiture under these
or any other
provisions of this act. It is enough for this case that the statute
prohibits such an
arrangement as that between the plaintiff and defendant so as to
render illegal
both the arrangement itself and all contracts between the parties
growing out of
it. It does not, however, follow that the plaintiff can succeed in this
action. There are
two answers to his claim as urged in his brief. It is a familiar principle
that the
courts will not aid either party to enforce an illegal contract, but will
leave them
both where it finds them; but where the plaintiff can establish a cause
of action
without exposing its illegality, the vice does not affect his right to
recover. The
American authorities cited by the plaintiff fully sustain this doctrine.
The principle
applies equally to a defense. The law in those islands applicable to the
case is
found in article 1305 of the Civil Code, shutting out from relief either
of the two
guilty parties to an illegal or vicious contract.
In the case at bar the plaintiff could establish prima facie his sole
ownership by
the bill of sale from Smith, Bell and Co. and the official registration.
The
defendant, on his part, might overthrow this title by proof through a
certain
subsequent agreement between him and the plaintiff, dated March 16,
1902, that
they had become owners in common of the vessel, 'the agreement not
disclosing
the illegal motive for placing the formal title in the plaintiff. Such an
ownership is
not in itself prohibited, for the United States courts recognize the
equitable
ownership of a vessel as against the holder of a legal title, where the
arrangement is not one in fraud of the law. (Weston vs. Penniman,
Federal Case
17455; Scudder vs. Calais Steamboat Company, Federal Case 12566.).
On this proof, the defendant being a part owner of the vessel, would
have
defeated the action for its exclusive possession by the plaintiff. The
burden would
then be cast upon the plaintiff to show the illegality of the
arrangement, which the
cases cited he would not be allowed to do.
The rule was reaffirmed in Lima vs. Lini Chu Kao, 51 Phil. 477.
The situation confronting us is exactly analogous. The appellant seeks
recovery of the disputed land on the strength of a donation regular on
its face. To defeat its effect, the appellees must plead and prove that
the same is illegal. But such plea on the part of the Lopez heirs is not
receivable, since Lopez, himself, if living, would be barred from setting
up that plea; and his heirs, as his privies and successors in interest,
can have no better rights than Lopez himself.
Appellees, as successors of the late donor, being thus precluded from
pleading the
defense of immorality or illegal causa of the donation, the total or
partial ineffectiveness of the same must be decided by different legal
principles. In this regard, the Court of Appeals correctly held that
Lopez could not donate the entirety of the property in litigation, to the
prejudice of his wife Maria Ngo, because said property was conjugal in
character and the right of the husband to donate community property
is strictly limited by
law (Civil Code of 1889, Arts. 1409, 1415, 1413; Baello vs. Villanueva,
54 Phil. 213).
ART. 1409. The conjugal partnership shall also be chargeable with
anything
which may have been given or promised by the husband alone to the acto ilegal o frraudulento de caracter oneroso, al decir en el art. 1.419:
children "Tambien
born of the marriage in order to obtain employment for them or give se traera a colacion en el inventario de la sociedad el importe de las
then, a donaciones y enajenaciones que deban considerarse ilegales o
profession or by both spouses by common consent, should they not fraudulentas,
have con sujecion al art. 1.413.' (Debio tambien citarse el articulo 1.415,
stipulated that such expenditures should be borne in whole or in part que es el que
by the habla de donaciones.)lawphi1.net
separate property of one of them.". "En resumen: el marido solo puede donar los bienes gananciales
ART. 1415. The husband may dispose of the property of the conjugal dentro de los
partnership limites marcados en el art. 1.415. Sin embargo, solo la mujer o sus
for the purposes mentioned in Article 1409.) herederos
ART. 1413. In addition to his powers as manager the husband may for pueden reclamar contra la valides de la donacion, pues solo en su
a valuable interes
consideration alienate and encumber the property of the conjugal establece la prohibicion. La mujer o sus herederos, para poder dejar
partnership sin efecto el
without the consent of the wife. acto, han de sufrir verdadero perjuicio, entendiendose que no le hay
The text of the articles makes it plain that the donation made by the hasta, tanto
husband in que, terminada por cualquier causa la sociedad de gananciales, y
contravention of law is not void in its entirety, but only in so far as it hecha su
prejudices the liquidacion, no pueda imputarse lo donado al haber por cualquier
interest of the wife. In this regard, as Manresa points out concepto del
(Commentaries, 5th Ed., pp. marido, ni obtener en su consecuencia la mujer la dibida
650-651, 652-653), the law asks no distinction between gratuitous indemnizacion. La
transfers and donacioni reviste por tanto legalmente, una eficacia condicional, y en
conveyances for a consideration. armonia
Puede la mujer como proprietaria hacer anular las donaciones aun con este caracter, deben fijarse los efectos de la misma con relacion a
durante el los
matrimonio? Esta es, en suma, la cuestion, reducida a determinar si la adquirentes y a los terceros poseedores, teniendo, en su caso, en
distinta cuenta lo
naturaleza entre los actos a titulo oneroso y los actos a titulo lucrativo, dispuesto en la ley Hipotecaria. Para prevenir todo perjuicio, puede la
y sus mujer,
especiales y diversas circunstancias, pueden motivar una solucion durante el matrimonio inmediatamente al acto, hacer constar ante los
diferente en Tribunales
cuanto a la epoca en que la mujer he de reclamar y obtener la nulidad su existencia y solicitor medidas de precaucion, como ya se ha dicho.
del acto; Para
cuestion que no deja de ser interesantisima.lawphi1.net evitarlo en lo sucesivo, y cuando las circunstancias lo requieran,
El Codigo, a pesar de la variacion que ha introducido en el proyecto de puede instar la
1851, declaracion de prodigalidad.
poniendo como segundo parrafo del articulo 1.413, o como limitacion To determine the prejudice to the widow, it must be shown that the
de las value of her share in
enajenaciones u obligaciones a titulo oneroso, lo que era una the property donated can not be paid out of the husband's share of
limitacion general the community
de todos los actos del marido, muestra, sin embargo, que no ha profits. The requisite data, however, are not available to us and
variado de necessitate a remand of
criterio y que para el las donaciones deben en todo equipararse a the records to the court of origin that settled the estate of the late
cualquier otro Salvador P. Lopez. The situation of the children and forced heirs of
Lopez approximates that of the widow. As privies of their parent, they
are barred from invoking the illegality of the donation. But their right right of the donees, should not be considered as incidental to the
to a legitime out of his estate is not thereby affected, since the probate proceedings aforementioned.
legitime is granted them by the law itself, over and above the wishes The case of Galion vs. Gayares, supra, is not in point. First, because
of the deceased. Hence, the forced heirs are entitled to have the that case involved a stimulated transfer that case have no effect,
donation set aside in so far as in officious: i.e., in excess of the portion while a donation with illegal causa may produce effects under certain
of free disposal (Civil Code of 1889, Articles 636, 654) computed as circumstances where the parties are not of equal guilt; and again,
provided in Articles 818 and 819, and bearing in mind that because the transferee in the Galion case took the property subject to
"collationable gifts" under Article 818 should include gifts made not lis pendens notice, that in this case does not exist.
only in favor of the forced heirs, but even those made in favor of In view of the foregoing, the decisions appealed from are reversed and
strangers, as decided by the Supreme Court of Spain in its decisions of set aside, and the appellant Conchita Liguez declared entitled to so
4 May 1899 and 16 June 1902. So that in computing the legitimes, the much of the donated property as may be found, upon proper
value of the property to herein appellant, Conchita Liguez, should be liquidation, not to prejudice the share of the widow Maria Ngo in the
considered part of the donor's estate. Once again, only the court of conjugal partnership with Salvador P. Lopez or the legitimes of the
origin has the requisite date to determine whether the donation is forced heirs of the latter. The records are ordered remanded to the
inofficious or not. court of origin for further proceedings in accordance with this opinion.
With regard to the improvements in the land in question, the same Costs against appellees. So ordered.
should be governed by the rules of accession and possession in good Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo,
faith, it being undisputed that the widow and heirs of Lopez were Labrador,
unaware of the donation in favor of the appellant when the Concepcion, and Endencia, JJ., concur.
improvements were made.
The appellees, relying on Galion vs. Garayes, 53 Phil. 43, contend that
by her failure to appear at the liquidation proceedings of the estate of
Salvador P. Lopez in July 1943, the appellant has forfeited her right to
uphold the donation if the prejudice to the widow Maria Ngo resulting
from the donation could be made good out of the husband's share in
the conjugal profits. It is also argued that appellant was guilty of EN BANC
laches in failing to enforce her rights as donee until 1951. This line of MACTAN-CEBU INTERNATIONAL
argument overlooks the capital fact that in 1943, appellant was still a AIRPORT AUTHORITY and AIR
minor of sixteen; and she did not reach the age of majority until 1948. TRANSPORTATION OFFICE,
Hence, her action in 1951 was only delayed three years. Nor could she Petitioners,
be properly expected to intervene in the settlement of the estate of - versus -
Lopez: first, because she was a minor during the great part of the BERNARDO L. LOZADA, SR., and the
proceedings; second, because she was not given notice thereof ; and HEIRS OF ROSARIO MERCADO,
third, because the donation did not make her a creditor of the estate. namely, VICENTE LOZADA, MARIO M.
As we have ruled in Lopez vs. Olbes, 15 Phil. 547-548: The prima facie LOZADA, MARCIA L. GODINEZ,
donation inter vivos and its acceptance by the donees having been VIRGINIA L. FLORES, BERNARDO
proved by means of a public instrument, and the donor having been LOZADA, JR., DOLORES GACASAN,
duly notified of said acceptance, the contract is perfect and obligatory SOCORRO CAFARO and ROSARIO
and it is perfectly in order to demand its fulfillment, unless an LOZADA, represented by MARCIA
exception is proved which is based on some legal reason opportunely LOZADA GODINEZ,
alleged by the donor or her heirs. So long as the donation in question Respondents.
has not been judicially proved and declared to be null, inefficacious, or x------------------------------------------------------------------------------------x
irregular, the land donated is of the absolute ownership of the donees DECISION
and consequently, does not form a part of the property of the estate of NACHURA, J.:
the deceased Martina Lopez; wherefore the action instituted This is a petition for review on certiorari under Rule 45 of the Rules of
demanding compliance with the contract, the delivery by the Court, seeking to reverse, annul, and set aside the Decision[1] dated
deforciant of the land donated, or that it be, prohibited to disturb the February
28, 2006 and the Resolution[2] dated February 7, 2007 of the Court of
Appeals (CA) (Cebu City), Twentieth Division, in CA-G.R. CV No. 65796.
The antecedent facts and proceedings are as follows:
Subject of this case is Lot No. 88-SWO-25042 (Lot No. 88), with an
area of
1,017 square meters, more or less, located in Lahug, Cebu City. Its
original
owner was Anastacio Deiparine when the same was subject to
expropriation
proceedings, initiated by the Republic of the Philippines (Republic),
represented by the then Civil Aeronautics Administration (CAA), for the
expansion and improvement of the Lahug Airport. The case was filed
with
the then Court of First Instance of Cebu, Third Branch, and docketed as
Civil Case No. R-1881.
As early as 1947, the lots were already occupied by the U.S. Army.
They
were turned over to the Surplus Property Commission, the Bureau of
Aeronautics, the National Airport Corporation and then to the CAA.
During the pendency of the expropriation proceedings, respondent
Bernardo
L. Lozada, Sr. acquired Lot No. 88 from Deiparine. Consequently,
Transfer
Certificate of Title (TCT) No. 9045 was issued in Lozadas name.
On December 29, 1961, the trial court rendered judgment in favor of
the
Republic and ordered the latter to pay Lozada the fair market value of
Lot
No. 88, adjudged at P3.00 per square meter, with consequential
damages by
way of legal interest computed from November 16, 1947the time
when the
lot was first occupied by the airport.Lozada received the amount
of P3,018.00 by way of payment.
The affected landowners appealed. Pending appeal, the Air
Transportation
Office (ATO), formerly CAA, proposed a compromise settlement
whereby
the owners of the lots affected by the expropriation proceedings would
either
not appeal or withdraw their respective appeals in consideration of a
commitment that the expropriated lots would be resold at the price
they were
expropriated in the event that the ATO would abandon the Lahug
Airport,
pursuant to an established policy involving similar cases. Because of
this
promise, Lozada did not pursue his appeal. Thereafter, Lot No. 88 was
transferred and registered in the name of the Republic under TCT No.
25057.
The projected improvement and expansion plan of the old Lahug
Airport,
however, was not pursued.
Lozada, with the other landowners, contacted then CAA Director
Vicente
Rivera, Jr., requesting to repurchase the lots, as per previous
agreement. The
CAA replied that there might still be a need for the Lahug Airport to be
used
as an emergency DC-3 airport. It reiterated, however, the assurance
that
should this Office dispose and resell the properties which may be
found to
be no longer necessary as an airport, then the policy of this Office is to
give
priority to the former owners subject to the approval of the President.
On November 29, 1989, then President Corazon C. Aquino issued a
Memorandum to the Department of Transportation, directing the
transfer of
general aviation operations of the Lahug Airport to
the Mactan International Airport before the end of 1990 and, upon
such
transfer, the closure of the Lahug Airport.
Sometime in 1990, the Congress of the Philippines passed Republic
Act
(R.A.) No. 6958, entitled An Act Creating the Mactan-Cebu
International
Airport Authority, Transferring Existing Assets of the Mactan
International
Airport and the Lahug Airport to the Authority, Vesting the Authority
with
Power to Administer and Operate the Mactan International Airport and
the
Lahug Airport, and For Other Purposes.
From the date of the institution of the expropriation proceedings up to
the
present, the public purpose of the said expropriation (expansion of the
airport) was never actually initiated, realized, or implemented.
Instead, the
old airport was converted into a commercial complex. Lot No. 88
became
the site of a jail known as Bagong Buhay Rehabilitation Complex, while
a
portion thereof was occupied by squatters.[3] The old airport was
converted
into what is now known as the Ayala I.T. Park, a commercial area.
Thus, on June 4, 1996, petitioners initiated a complaint for the
recovery of
possession and reconveyance of ownership of Lot No. 88. The case
was
docketed as Civil Case No. CEB-18823 and was raffled to the Regional
Trial
Court (RTC), Branch 57, Cebu City. The complaint substantially alleged
as
follows:
(a) Spouses Bernardo and Rosario Lozada were the registered
owners of Lot No. 88 covered by TCT No. 9045;
(b) In the early 1960s, the Republic sought to acquire by
expropriation Lot No. 88, among others, in connection with
its program for the improvement and expansion of
the LahugAirport;
(c) A decision was rendered by the Court of First Instance in favor
of the Government and against the land owners, among
whom was Bernardo Lozada, Sr. appealed therefrom;
(d) During the pendency of the appeal, the parties entered into a
compromise settlement to the effect that the subject property
would be resold to the original owner at the same price when
it was expropriated in the event that the Government
abandons the Lahug Airport;
(e) Title to Lot No. 88 was subsequently transferred to the
Republic of the Philippines (TCT No. 25057);
(f) The projected expansion and improvement of
the Lahug Airport did not materialize;
(g) Plaintiffs sought to repurchase their property from then CAA
Director Vicente Rivera. The latter replied by giving as
assurance that priority would be given to the previous
owners, subject to the approval of the President, should CAA
decide to dispose of the properties;
(h) On November 29, 1989, then President Corazon C. Aquino,
through a Memorandum to the Department of Transportation
and Communications (DOTC), directed the transfer of
general aviation operations at the Lahug Airport to the
Mactan-Cebu International Airport Authority;
(i) Since the public purpose for the expropriation no longer exists,
the property must be returned to the plaintiffs.[4]
In their Answer, petitioners asked for the immediate dismissal of the
complaint. They specifically denied that the Government had made
assurances to reconvey Lot No. 88 to respondents in the event that
the
property would no longer be needed for airport operations. Petitioners
instead asserted that the judgment of condemnation was
unconditional, and
respondents were, therefore, not entitled to recover the expropriated
property
notwithstanding non-use or abandonment thereof.
After pretrial, but before trial on the merits, the parties stipulated on
the
following set of facts:
(1) The lot involved is Lot No. 88-SWO-25042 of the Banilad
Estate, situated in the City of Cebu, containing an area of
One Thousand Seventeen (1,017) square meters, more or
less;
(2) The property was expropriated among several other properties
in Lahug in favor of the Republic of the Philippines by virtue
of a Decision dated December 29, 1961 of the CFI of Cebu
in Civil Case No. R-1881;
(3) The public purpose for which the property was expropriated
was for the purpose of the Lahug Airport;
(4) After the expansion, the property was transferred in the name
of MCIAA; [and]
(5) On November 29, 1989, then President Corazon C. Aquino
directed the Department of Transportation and
Communication to transfer general aviation operations of the
Lahug Airport to the Mactan-Cebu International Airport
Authority and to close the Lahug Airport after such
transfer[.][5]
During trial, respondents presented Bernardo Lozada, Sr. as their lone
witness, while petitioners presented their own witness, Mactan-Cebu
International Airport Authority legal assistant Michael Bacarisas.
On October 22, 1999, the RTC rendered its Decision, disposing as
follows:
WHEREFORE, in the light of the foregoing, the Court hereby
renders judgment in favor of the plaintiffs, Bernardo L. Lozada,
Sr., and the heirs of Rosario Mercado, namely, Vicente M.
Lozada, Marcia L. Godinez, Virginia L. Flores, Bernardo M.
Lozada, Jr., Dolores L. Gacasan, Socorro L. Cafaro and Rosario
M. Lozada, represented by their attorney-in-fact Marcia Lozada
Godinez, and against defendants Cebu-Mactan International
Airport Authority (MCIAA) and Air Transportation Office
(ATO):
1. ordering MCIAA and ATO to restore to plaintiffs the
possession and ownership of their land, Lot No. 88 Psd-821
(SWO-23803), upon payment of the expropriation price to
plaintiffs; and
2. ordering the Register of Deeds to effect the transfer of the
Certificate of Title from defendant[s] to plaintiffs on Lot No. [88],
cancelling TCT No. 20357 in the name of defendant MCIAA and
to issue a new title on the same lot in the name of Bernardo L.
Lozada, Sr. and the heirs of Rosario Mercado, namely: Vicente M.
Lozada, Mario M. Lozada, Marcia L. Godinez, Virginia L. Flores,
Bernardo M. Lozada, Jr., Dolores L. Gacasan, Socorro L. Cafaro
and Rosario M. Lozada.
No pronouncement as to costs.
SO ORDERED.[6]
Aggrieved, petitioners interposed an appeal to the CA. After the filing
of the
necessary appellate briefs, the CA rendered its assailed Decision dated
February 28, 2006, denying petitioners appeal and affirming in toto
the
Decision of the RTC, Branch 57, Cebu City. Petitioners motion for
reconsideration was, likewise, denied in the questioned CA Resolution
dated
February 7, 2007.
Hence, this petition arguing that: (1) the respondents utterly failed to
prove
that there was a repurchase agreement or compromise settlement
between
them and the Government; (2) the judgment in Civil Case No. R-1881
was
absolute and unconditional, giving title in fee simple to the Republic;
and (3)
the respondents claim of verbal assurances from government officials
violates the Statute of Frauds.
The petition should be denied.
Petitioners anchor their claim to the controverted property on the
supposition
that the Decision in the pertinent expropriation proceedings did not
provide
for the condition that should the intended use of Lot No. 88 for the
expansion of the Lahug Airport be aborted or abandoned, the property
would
revert to respondents, being its former owners. Petitioners cite, in
support of
this position, Fery v. Municipality of Cabanatuan,[7] which declared
that the
Government acquires only such rights in expropriated parcels of land
as may
be allowed by the character of its title over the properties
If x x x land is expropriated for a particular purpose, with the
condition that when that purpose is ended or abandoned the
property shall return to its former owner, then, of course, when the
purpose is terminated or abandoned the former owner reacquires
the property so expropriated. If x x x land is expropriated for a
public street and the expropriation is granted upon condition that
the city can only use it for a public street, then, of course, when
the city abandons its use as a public street, it returns to the former
owner, unless there is some statutory provision to the contrary. x x
x. If, upon the contrary, however, the decree of expropriation
gives to the entity a fee simple title, then, of course, the land
becomes the absolute property of the expropriator, whether it be
the State, a province, or municipality, and in that case the nonuser
does not have the effect of defeating the title acquired by the
expropriation proceedings. x x x.
When land has been acquired for public use in fee simple,
unconditionally, either by the exercise of eminent domain or by
purchase, the former owner retains no right in the land, and the
public use may be abandoned, or the land may be devoted to a
different use, without any impairment of the estate or title
acquired, or any reversion to the former owner. x x x.[8]
Contrary to the stance of petitioners, this Court had ruled otherwise
in Heirs of Timoteo Moreno and Maria Rotea v. Mactan-Cebu
International
Airport Authority,[9] thus
Moreover, respondent MCIAA has brought to our attention a
significant and telling portion in the Decision in Civil Case No. R-
1881 validating our discernment that the expropriation by the
predecessors of respondent was ordered under the running
impression that Lahug Airport would continue in operation
As for the public purpose of the expropriation
proceeding, it cannot now be
doubted. Although Mactan Airport is being
constructed, it does not take away the actual
usefulness and importance of the Lahug Airport: it is
handling the air traffic both civilian and
military. From it aircrafts fly to Mindanao and
Visayas and pass thru it on their flights to the North
and Manila. Then, no evidence was adduced to show
how soon is the Mactan Airport to be placed in
operation and whether the LahugAirport will be
closed immediately thereafter. It is up to the other
departments of the Government to determine said
matters. The Court cannot substitute its judgment for
those of the said departments or agencies. In the
absence of such showing, the Court will presume
that the Lahug Airport will continue to be in
operation (emphasis supplied).
While in the trial in Civil Case No. R-1881 [we] could have
simply acknowledged the presence of public purpose for the
exercise of eminent domain regardless of the survival
of Lahug Airport, the trial court in its Decision chose not to do so
but instead prefixed its finding of public purpose upon its
understanding that Lahug Airport will continue to be in
operation. Verily, these meaningful statements in the body of
the Decision warrant the conclusion that the expropriated
properties would remain to be so until it was confirmed
that Lahug Airport was no longer in operation. This inference
further implies two (2) things: (a) after the Lahug Airport ceased
its undertaking as such and the expropriated lots were not being
used for any airport expansion project, the rights vis--vis the
expropriated Lots Nos. 916 and 920 as between the State and their
former owners, petitioners herein, must be equitably adjusted; and
(b) the foregoing unmistakable declarations in the body of
the Decision should merge with and become an intrinsic part of
the fallo thereof which under the premises is clearly inadequate
since the dispositive portion is not in accord with the findings as
contained in the body thereof.[10]
Indeed, the Decision in Civil Case No. R-1881 should be read in its
entirety,
wherein it is apparent that the acquisition by the Republic of the
expropriated lots was subject to the condition that the Lahug Airport
would
continue its operation. The condition not having materialized because
the
airport had been abandoned, the former owner should then be allowed
to
reacquire the expropriated property.[11]
On this note, we take this opportunity to revisit our ruling in Fery,
which
involved an expropriation suit commenced upon parcels of land to be
used
as a site for a public market. Instead of putting up a public market,
respondent Cabanatuan constructed residential houses for lease on
the
area. Claiming that the municipality lost its right to the property taken
since
it did not pursue its public purpose, petitioner Juan Fery, the former
owner
of the lots expropriated, sought to recover his properties. However, as
he had
admitted that, in 1915, respondent Cabanatuan acquired a fee simple
title to
the lands in question, judgment was rendered in favor of the
municipality,
following American jurisprudence, particularly City of Fort Wayne v.
Lake
Shore & M.S. RY. Co.,[12] McConihay v. Theodore Wright,[13] and
Reichling
v. Covington Lumber Co.,[14] all uniformly holding that the transfer to
a third
party of the expropriated real property, which necessarily resulted in
the
abandonment of the particular public purpose for which the property
was
taken, is not a ground for the recovery of the same by its previous
owner, the
title of the expropriating agency being one of fee simple.
Obviously, Fery was not decided pursuant to our now sacredly held
constitutional right that private property shall not be taken for public
use
without just compensation.[15] It is well settled that the taking of
private
property by the Governments power of eminent domain is subject to
two
mandatory requirements: (1) that it is for a particular public purpose;
and (2)
that just compensation be paid to the property owner. These
requirements
partake of the nature of implied conditions that should be complied
with to
enable the condemnor to keep the property expropriated.[16]
More particularly, with respect to the element of public use, the
expropriator
should commit to use the property pursuant to the purpose stated in
the
petition for expropriation filed, failing which, it should file another
petition
for the new purpose. If not, it is then incumbent upon the expropriator
to
return the said property to its private owner, if the latter desires to
reacquire
the same. Otherwise, the judgment of expropriation suffers an intrinsic
flaw,
as it would lack one indispensable element for the proper exercise of
the
power of eminent domain, namely, the particular public purpose for
which
the property will be devoted. Accordingly, the private property owner
would
be denied due process of law, and the judgment would violate the
property
owners right to justice, fairness, and equity.
In light of these premises, we now expressly hold that the taking of
private
property, consequent to the Governments exercise of its power of
eminent
domain, is always subject to the condition that the property be
devoted to the
specific public purpose for which it was taken. Corollarily, if this
particular
purpose or intent is not initiated or not at all pursued, and is
peremptorily
abandoned, then the former owners, if they so desire, may seek the
reversion
of the property, subject to the return of the amount of just
compensation
received. In such a case, the exercise of the power of eminent domain
has
become improper for lack of the required factual justification.[17]
Even without the foregoing declaration, in the instant case, on the
question
of whether respondents were able to establish the existence of an oral
compromise agreement that entitled them to repurchase Lot No. 88
should
the operations of the Lahug Airport be abandoned, we rule in the
affirmative.
It bears stressing that both the RTC, Branch 57, Cebu and the CA have
passed upon this factual issue and have declared, in no uncertain
terms, that
a compromise agreement was, in fact, entered into between the
Government
and respondents, with the former undertaking to resell Lot No. 88 to
the
latter if the improvement and expansion of the Lahug Airport would
not be
pursued. In affirming the factual finding of the RTC to this effect, the
CA
declared
Lozadas testimony is cogent. An octogenarian widower-retiree
and a resident of Moon Park, California since 1974, he testified
that government representatives verbally promised him and his
late wife while the expropriation proceedings were on-going that
the government shall return the property if the purpose for the
expropriation no longer exists. This promise was made at the
premises of the airport. As far as he could remember, there were
no expropriation proceedings against his property in 1952 because
the first notice of expropriation he received was in 1962. Based on
the promise, he did not hire a lawyer. Lozada was firm that he was
promised that the lot would be reverted to him once the public use
of the lot ceases. He made it clear that the verbal promise was
made in Lahug with other lot owners before the 1961 decision
was handed down, though he could not name the government
representatives who made the promise. It was just a verbal
promise; nevertheless, it is binding. The fact that he could not
supply the necessary details for the establishment of his assertions
during cross-examination, but that When it will not be used as
intended, it will be returned back, we just believed in the
government, does not dismantle the credibility and truthfulness of
his allegation. This Court notes that he was 89 years old when he
testified in November 1997 for an incident which happened
decades ago. Still, he is a competent witness capable of perceiving
and making his perception known. The minor lapses are
immaterial. The decision of the competency of a witness rests
primarily with the trial judge and must not be disturbed on appeal
unless it is clear that it was erroneous. The objection to his
competency must be made before he has given any testimony or
as soon as the incompetency becomes apparent. Though Lozada is
not part of the compromise agreement,[18] he nevertheless adduced
sufficient evidence to support his claim.[19]
As correctly found by the CA, unlike in Mactan Cebu International
Airport
Authority v. Court of Appeals,[20] cited by petitioners, where
respondent
therein offered testimonies which were hearsay in nature, the
testimony of
Lozada was based on personal knowledge as the assurance from the
government was personally made to him. His testimony on
crossexamination
destroyed neither his credibility as a witness nor the
truthfulness of his words.
Verily, factual findings of the trial court, especially when affirmed by
the CA, are binding and conclusive on this Court and may not be
reviewed.
A petition for certiorari under Rule 45 of the Rules of Court
contemplates
only questions of law and not of fact.[21] Not one of the exceptions to
this
rule is present in this case to warrant a reversal of such findings.
As regards the position of petitioners that respondents testimonial
evidence
violates the Statute of Frauds, suffice it to state that the Statute of
Frauds
operates only with respect to executory contracts, and does not apply
to
contracts which have been completely or partially performed, the
rationale
thereof being as follows:
In executory contracts there is a wide field for fraud because
unless they be in writing there is no palpable evidence of the
intention of the contracting parties. The statute has precisely been
enacted to prevent fraud. However, if a contract has been totally
or partially performed, the exclusion of parol evidence would
promote fraud or bad faith, for it would enable the defendant to
keep the benefits already delivered by him from the transaction in
litigation, and, at the same time, evade the obligations,
responsibilities or liabilities assumed or contracted by him
thereby.[22]
In this case, the Statute of Frauds, invoked by petitioners to bar the
claim of
respondents for the reacquisition of Lot No. 88, cannot apply, the oral
compromise settlement having been partially performed. By reason of
such
assurance made in their favor, respondents relied on the same by not
pursuing their appeal before the CA.Moreover, contrary to the claim of
petitioners, the fact of Lozadas eventual conformity to the appraisal of
Lot
No. 88 and his seeking the correction of a clerical error in the
judgment as to
the true area of Lot No. 88 do not conclusively establish that
respondents
absolutely parted with their property. To our mind, these acts were
simply
meant to cooperate with the government, particularly because of the
oral
promise made to them.
The right of respondents to repurchase Lot No. 88 may be enforced
based on
a constructive trust constituted on the property held by the
government in
favor of the former. On this note, our ruling in Heirs of Timoteo Moreno
is
instructive, viz.:
Mactan-Cebu International Airport Authority is correct in stating
that one would not find an express statement in the Decision in
Civil Case No. R-1881 to the effect that the [condemned] lot
would return to [the landowner] or that [the landowner] had a
right to repurchase the same if the purpose for which it was
expropriated is ended or abandoned or if the property was to be
used other than as the Lahug Airport. This omission
notwithstanding, and while the inclusion of this pronouncement in
the judgment of condemnation would have been ideal, such
precision is not absolutely necessary nor is it fatal to the cause of
petitioners herein. No doubt, the return or repurchase of the
condemned properties of petitioners could be readily justified as
the manifest legal effect or consequence of the trial courts
underlying presumption that Lahug Airport will continue to be in
operation when it granted the complaint for eminent domain and
the airport discontinued its activities.
The predicament of petitioners involves a constructive trust, one
that is akin to the implied trust referred to in Art. 1454 of the Civil
Code, If an absolute conveyance of property is made in order to
secure the performance of an obligation of the grantor toward the
grantee, a trust by virtue of law is established. If the fulfillment of
the obligation is offered by the grantor when it becomes due, he
may demand the reconveyance of the property to him. In the case
at bar, petitioners conveyed Lots No. 916 and 920 to the
government with the latter obliging itself to use the realties for the
expansion of Lahug Airport; failing to keep its bargain, the
government can be compelled by petitioners to reconvey the
parcels of land to them, otherwise, petitioners would be denied the
use of their properties upon a state of affairs that was not
conceived nor contemplated when the expropriation was
authorized.
Although the symmetry between the instant case and the situation
contemplated by Art. 1454 is not perfect, the provision is
undoubtedly applicable. For, as explained by an expert on the law
of trusts: The only problem of great importance in the field of
constructive trust is to decide whether in the numerous and
varying fact situations presented to the courts there is a wrongful
holding of property and hence a threatened unjust enrichment of
the defendant. Constructive trusts are fictions of equity which are
bound by no unyielding formula when they are used by courts as
devices to remedy any situation in which the holder of legal title
may not in good conscience retain the beneficial interest.
In constructive trusts, the arrangement is temporary and passive in
which the trustees sole duty is to transfer the title and possession
over the property to the plaintiff-beneficiary. Of course,
the wronged party seeking the aid of a court of equity in
establishing a constructive trust must himself do
equity. Accordingly, the court will exercise its discretion in
deciding what acts are required of the plaintiff-beneficiary as
conditions precedent to obtaining such decree and has the
obligation to reimburse the trustee the consideration received from
the latter just as the plaintiff-beneficiary would if he proceeded on
the theory of rescission. In the good judgment of the court, the
trustee may also be paid the necessary expenses he may have
incurred in sustaining the property, his fixed costs for
improvements thereon, and the monetary value of his services in
managing the property to the extent that plaintiff-beneficiary will
secure a benefit from his acts.
The rights and obligations between the constructive trustee and
the beneficiary, in this case, respondent MCIAA and petitioners
over Lots Nos. 916 and 920, are echoed in Art. 1190 of the Civil
Code, When the conditions have for their purpose the
extinguishment of an obligation to give, the parties, upon the
fulfillment of said conditions, shall return to each other what they
have received x x x In case of the loss, deterioration or
improvement of the thing, the provisions which, with respect to the
debtor, are laid down in the preceding article shall be applied to
the party who is bound to return x x x.[23]
On the matter of the repurchase price, while petitioners are obliged to
reconvey Lot No. 88 to respondents, the latter must return to the
former what
they received as just compensation for the expropriation of the
property, plus
legal interest to be computed from default, which in this case runs
from the
time petitioners comply with their obligation to respondents.
Respondents must likewise pay petitioners the necessary expenses
they may
have incurred in maintaining Lot No. 88, as well as the monetary value
of
their services in managing it to the extent that respondents were
benefited
thereby.
Following Article 1187[24] of the Civil Code, petitioners may keep
whatever
income or fruits they may have obtained from Lot No. 88, and
respondents
need not account for the interests that the amounts they received as
just
compensation may have earned in the meantime.
In accordance with Article 1190[25] of the Civil Code vis--vis Article
1189,
which provides that (i)f a thing is improved by its nature, or by time,
the
improvement shall inure to the benefit of the creditor x x x,
respondents, as
creditors, do not have to pay, as part of the process of restitution, the
appreciation in value of Lot No. 88, which is a natural consequence of
nature
and time.[26]
WHEREFORE, the petition is DENIED. The February 28, 2006 Decision
of the Court of Appeals, affirming the October 22, 1999 Decision of the
Regional Trial Court, Branch 87, Cebu City, and its February 7, 2007
Resolution are AFFIRMED with MODIFICATION as follows:
1. Respondents are ORDERED to return to petitioners the just
compensation they received for the expropriation of Lot No. 88, plus
legal
interest, in the case of default, to be computed from the time
petitioners
comply with their obligation to reconvey Lot No. 88 to them;
2. Respondents are ORDERED to pay petitioners the necessary
expenses
the latter incurred in maintaining Lot No. 88, plus the monetary value
of
their services to the extent that respondents were benefited thereby;
3. Petitioners are ENTITLED to keep whatever fruits and income
they may have obtained from Lot No. 88; and
4. Respondents are also ENTITLED to keep whatever interests the
amounts
they received as just compensation may have earned in the
meantime, as
well as the appreciation in value of Lot No. 88, which is a natural
consequence of nature and time;
In light of the foregoing modifications, the case is REMANDED to the
Regional Trial Court, Branch 57, Cebu City, only for the purpose of
receiving evidence on the amounts that respondents will have to pay
petitioners in accordance with this Courts decision. No costs.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice