Art.
13 Periods As a result of the incident, Firestone terminated Lariosa's services on August 2, 1983, citing as
RULE 22
Computation of Time
Section 1. How to compute time. — In computing any period of time prescribed or allowed by
these Rules, or by order of the court, or by any applicable statute, the day of the act or event from
which the designated period of time begins to run is to be excluded and the date of performance
included. If the last day of the period, as thus computed, falls on a Saturday a Sunday, or a legal
holiday in the place where the court sits, the time shall not run until the next working day. (a)
Section 2. Effect of interruption. — Should an act be done which effectively interrupts the running
of the period, the allowable period after such interruption shall start to run on the day after notice
of the cessation of the cause thereof.
The day of the act that caused the interruption shall be excluded in the computation of the period.
(n)
G.R. No. 70479 February 27, 1987
FIRESTONE TIRE AND RUBBER COMPANY OF THE PHILIPPINES, petitioner,
vs.
CARLOS LARIOSA and NATIONAL LABOR RELATIONS COMMISSION, respondents.
FERNAN, J:
In this petition for certiorari, petitioner Firestone Tire and Rubber Company of the Philippines
[Firestone for brevity] assails the decision of public respondent National Labor Relations
Commission which ordered the reinstatement without backwages of Carlos Lariosa, a dismissed
tire builder of petitioner, as having been rendered with grave abuse of discretion amounting to
lack of jurisdiction.
The facts are as follows:
Carlos Lariosa started working with Firestone on January 3, 1972 as a factory worker. At the time
of his dismissal, he was a tire builder.
At around 2:00 o'clock in the afternoon of July 27, 1983, as he was about to leave the company
premises Lariosa submitted himself to a routine check by the security guards at the west gate. He
was frisked by Security Guard Ambrosio Liso [Lizo] while his personal bag was inspected by
Security Guard Virgilio Olvez. In the course of the inspection, sixteen [16] wool flannel swabs, all
belonging to the company, were found inside his bag, tucked underneath his soiled clothes.
grounds therefor: "stealing company property and loss of trust." 1 Firestone also filed a criminal
complaint against him with the Rizal provincial fiscal for attempted theft [IS No. 83-436-M]. 2
Lariosa, on the other hand, sued Firestone before the Ministry of Labor and Employment for
illegal dismissal, violation of Batas Pambansa Blg. 130 and its related rules and regulations, and
damages. The Labor Arbiter, in his decision dated May 8, 1984, found Lariosa's dismissal
justified. 3 However, on appeal, the National Labor Relations Commission on December 28, 1984
reversed the decision of the Labor Arbiter [with one commissioner voting for affirmance] and held
that the dismissal of Lariosa was too severe a penalty. It therefore ordered Lariosa's
reinstatement but without backwages, the period when he was out of work to be considered a
suspension. 4
Petitioner Firestone, in this special civil action for certiorari, contends that the NLRC erred in not
dismissing Lariosa's appeal for being late, in finding that Lariosa was not accorded due process
and in reversing the Labor Arbiter.
We shall deal first with the timeliness of the appeal. It is admitted that Lariosa filed his appeal on
June 7, 1984 or after the lapse of fourteen days from notice of the decision of the Labor Arbiter.
Article 223 of the Labor Code clearly provides for a reglementary period of ten days within which
to appeal decision of the Labor Arbiter to the NLRC. The ten-day period has been interpreted by
this Court in the case of Vir-jen Shipping and Marine Services, Inc. vs. NLRC, G.R. No. 58011-
12, July 20, 1982, 115 SCRA 347, 361, to mean ten "calendar" days and not ten "working" days.
However, the "Notice of Decision" which Lariosa's lawyer received together with a copy of the
arbiter's decision advised them that an appeal could be taken to the NLRC within ten "working"
days from receipt of the said decision. 5
Mindful of the fact that Lariosa's counsel must have been misled by the implementing rules of the
labor commission and considering that the shortened period for appeal is principally intended
more for the employees' benefit, rather than that of the employer, We are inclined to overlook this
particular procedural lapse and to proceed with the resolution of the instant case.
A review of the record shows that Lariosa was indubitably involved in the attempted theft of the
flannel swabs. During the investigation called by the company's industrial relations manager Ms.
Villavicencio on July 28, 1983, or one day after the incident, Security Guards Liso and Olvez
contradicted Lariosa's bare claim that he had no intention to bring home the swabs and that he
had simply overlooked that he had earlier placed them inside his bag after they were given to him
by his shift supervisor while he was busy at work. Guard Olvez stated that when he confronted
Lariosa with the swabs, the latter replied that they were for "home use." And when he requested
Lariosa to stay behind while he reported the matter to the authorities, Lariosa refused and
hurriedly left the premises and boarded a passing jeepney. 6
From the records, it is likewise clear that Firestone did not act arbitrarily in terminating Lariosa's
services. On the contrary, there are transcripts to prove that an investigation of the incident was
promptly conducted in the presence of the employee concerned, the union president and the
security guards who witnessed the attempted asportation. Records also belie the allegation that
Lariosa was shown his walking papers on the very day of the incident. The letter of Ms.
Villavicencio to Lariosa dated August 1, 1983 informing the latter of his dismissal effective August
2, 1983 conclusively shows that he was discharged only on August 2, 1983, after an investigation
was held to ventilate the truth about the July 27 incident. 7 Thus, we cannot agree with the
1
NLRC's conclusion that even if Firestone had found substantial proof of Lariosa's misconduct, it
did not observe the statutory requirements of due process.
There is no gainsaying that theft committed by an employee constitutes a valid reason for his
dismissal by the employer. Although as a rule this Court leans over backwards to help workers
and employees continue with their employment or to mitigate the penalties imposed on them,
acts of dishonesty in the handling of company property are a different matter. 8
Thus, under Article 283 of the Labor Code, an employer may terminate an employment for
"serious misconduct" or for "fraud or willful breach by the employee of the trust reposed in him by
his employer or representative."
If there is sufficient evidence that an employee has been guilty of a breach of trust or that his
employer has ample reasons to distrust him, the labor tribunal cannot justly deny to the employer
the authority to dismiss such an employee. 9
As a tire builder, Lariosa was entrusted with certain materials for use in his job. On the day in
question, he was given two bundles of wool flannel swabs [ten pieces per bundle] for cleaning
disks. He used four swabs from one pack and kept the rest [sixteen pieces] in his "blue travelling
bag." 10 Why he placed the swabs in his personal bag, which is not the usual receptacle for
company property, has not been satisfactorily explained.
If Lariosa, by his own wrong-doing, could no longer be trusted, it would be an act of oppression to
compel the company to retain him, fully aware that such an employee could, in the long run,
endanger its very viability.
The employer's obligation to give his workers just compensation and treatment carries with it the
corollary right to expect from the workers adequate work, diligence and good conduct. 11
In view of the foregoing, We rule that Firestone had valid grounds to dispense with the services of
Lariosa and that the NLRC acted with grave abuse of discretion in ordering his reinstatement.
However, considering that Lariosa had worked with the company for eleven years with no known
previous bad record, the ends of social and compassionate justice would be served if he is paid
full separation pay but not reinstatement without backages as decreed by the NLRC. 12
WHEREFORE, the petition is granted. The decision of the National Labor Relations Commission
dated December 28, 1984 is reversed and set aside. Petitioner Firestone Tire and Rubber
Company of the Philippines is directed to pay its dismissed worker Carlos Lariosa the separation
pay to which he may be entitled under the law, or any collective bargaining agreement or
company rules or practice, whichever is higher.
SO ORDERED.
Alampay, Gutierrez, Jr., Paras, Padilla and Bidin JJ., concur.
Cortes, J., took no part.
G.R. No. L-14858 December 29, 1960
MARIANO S. GONZAGA, petitioner-appellee,
vs.
AUGUSTO CE DAVID, as Registrar of the Motor Vehicles Office of Cagayan, respondent-
appellant.
Office of the Asst. Solicitor General Guillermo E. Torres and Solicitor E. D. Ignacio for appellant.
Ventura V. Perez for appellee.
REYES, J.B.L., J.:
The essential antecedents of this case are not disputed. On February, 1957, Mariano Gonzaga,
as owner, registered with the Motor Vehicles Office a cargo truck and a passenger bus, paying
the first installment for registration fees due on said vehicles for 1957. To cover the second
installment for registration fees, Gonzaga remitted to the Provincial Treasurer of Cagayan, by
registered mail, P500.00, under postal money orders Nos. 18553, 18554 and 18555, purchased
from and issued by the Post Office of Camalaniugan, Cagayan. The postal cancellation mark on
the envelope containing the remittance of Gonzaga bears the date August 31, 1957; so does the
postal cancellation mark on the face of the money orders.
The Registrar of the Motor Vehicles Office of Cagayan ruled that pursuant to Section 8 (1), Act
3992, otherwise known as the Revised Motor Vehicle Law, the second installment for registration
fees was payable on or before the last working day of August; that the last working day of August,
1957 was Friday, August 30, 1957; that consequently, the remittance of Gonzaga bearing postal
cancellation mark dated August 31, 1957 was made beyond the time fixed by law. Accordingly,
said official sought to impose a 50% delinquency penalty, or otherwise, threatened to confiscate
the certificate of registration for the two trucks (Annexes "B" & "C").lawphil.net
Gonzaga brought this action in the Court of First Instance, which, upon a stipulation of facts,
rendered judgment, the dispositive part reading —
POR TANTO, el Juzgado dicta decision declarando, como por la presente declara, que
el pago hecho con los giros postales Nos. 18553, 18554 y 18555, por el recurrente, se
ha hecho dentro del plazo fijado por ley; y, por tanto, el recurrente no ha incurrido con
morosidad en cuanto a dicho pago.
Se ordena al recurrido, sus agentes y representantes, que se abstengan de confiscar el
certificado de registro de los dos trucks del recurrente, por la alegada morosidad del
citado pago.
Sin costas.
ASI SE ORDENA.
2
The only issue in this appeal is whether the remittance of petitioner-appellee covering the second
installment of registration fees for 1957, made by registered mail with postal cancellation dated
August 31, 1957, was within the time fixed by law.
The following are the pertinent provisions of Act 3992 as amended —
Sec. 8 (I) ". . . The registration fees provided in this Act for trucks may be payable in two
equal installments, the first to be paid on or before the last working day of February, and
the second to be paid on or before the last working day of August. (Emphasis supplied)
Sec. 6 (b) "The date of cancellation of the postage stamps of envelopes containing
money orders, checks, or cash shall be considered as the date of
application. . . .
In support of its contention that August 30, and not August 31, was the last working day of
August, 1957, respondent-appellant invokes Republic Act No. 1880, otherwise known as the "40-
Hour Week Law", pursuant to which government offices are to hold office from Monday to Friday
only, unless one of those expressly exempted therefrom.
As correctly held by the court below, the fact that pursuant to Republic Act 1880, the Motor
Vehicles Office in Tuguegarao, Cagayan, had no office on Saturday, Aug. 31, 1957, is immaterial
in the case. The last working day contemplated in Sec. 8(I) of Act 3992 as amended should not
necessarily mean the last working day for Motor Vehicle Office. Under Sec. 6(b) of said Act,
providing for payment of registration fees by mail, the date of cancellation of the postage stamps
of the envelope containing the remittance is considered the date of application. Consequently,
where the manner of payment falls under said Section 6(b), the law, in recognizing the date of
cancellation as the date of application, impliedly permits of a remittance or payment within that
last day of August that the Post Office may still effect cancellation; and the remittance, in fact,
bears a postal cancellation, dated August 31, 1957. Moreover, it is not pretended by respondent-
appellant that the Post Office ceased or has ceased to transact business and discharge its
functions on Saturdays by reason alone of Republic Act No. 1880. Clearly, therefore,the
remittance by petitioner-appellee was within the by law, as provided in Section 8 (I), in connection
with Section 6 (b) of Act 3992, as amended.lawphil.net
The fact that August 31, 1957 was declared a special public holiday by Proclamation No. 437
(dated August 21, 1957) of the President of the Philippines did not have the effect of making the
preceding day, August 30, the last day for paying registration fees without penalty. On the
contrary, Section 31 of the Revised Administrative Code provides —
Sec. 31. Pretermission of holiday. — Where the day, or the last day, for doing any act
required or permitted by law falls on a holiday, the act may be done the next succeeding
business day.
In Calano vs. Cruz, 91 Phil., 247, we ruled as follows:
The complaint filed by the petitioner herein was presented in the court a quo on
November 23, 1951, exactly on the eight day after the proclamation of the respondent
as duly elected councilor for the Municipality of Orion, Bataan. It happens, however, that
November 22, 1951, the last day of the seven-day period prescribed by Section 173 of
the Revised Election Code, was declared a "Special Public Holiday For National
Thanksgiving" by Proclamation No. 290, series of 1951, of the President of the
Philippines. The trial court held that the provisions of Section 1 of Rule 28 of the Rules
of Court could not be applied to the case at bar because it is an election case (Rule
132, Rules of Court), and declared that the complaint was filed outside of the period
provided for by law. Assuming that Section 1 of Rule 28 of the Rules of Court is not
applicable, the law applicable is Section 31 of the Revised Administrative Code, which
provides that "Where the day, or the last day, for doing any act required or permitted by
law falls on a holiday, the act may be done on the next succeeding business day." The
court a quo, therefore, committed an error in declaring that the complaint was filed out
of time.
The ruling is on all fours on the issue before us, and against respondent-appellant.
The decision appealed from is affirmed. Without costs..
Bengzon, Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Gutierrez David, Paredes,
and Dizon, JJ., concur.
G.R. No. L-32116 April 2l, 1981
RURAL BANK OF CALOOCAN, INC. and JOSE O. DESIDERIO, JR., petitioners,
vs.
THE COURT OF APPEALS and MAXIMA CASTRO, respondents.
DE CASTRO, * J.:
This is a petition for review by way of certiorari of the decision 1 of the Court of Appeals in CA-
G.R. No. 39760-R entitled "Maxima Castro, plaintiff-appellee, versus Severino Valencia, et al.,
defendants; Rural Bank of Caloocan, Inc., Jose Desiderio, Jr. and Arsenio Reyes, defendants-
appellants," which affirmed in toto the decision of the Court of First Instance of Manila in favor of
plaintiff- appellee, the herein private respondent Maxima Castro.
On December 7, 1959, respondent Maxima Castro, accompanied by Severino Valencia, went to
the Rural Bank of Caloocan to apply for an industrial loan. It was Severino Valencia who
arranged everything about the loan with the bank and who supplied to the latter the personal data
required for Castro's loan application. On December 11, 1959, after the bank approved the loan
for the amount of P3,000.00, Castro, accompanied by the Valencia spouses, signed a promissory
note corresponding to her loan in favor of the bank.
On the same day, December 11, 1959, the Valencia spouses obtained from the bank an equal
amount of loan for P3,000.00. They signed a promissory note (Exhibit "2") corresponding to their
loan in favor of the bank and had Castro affixed thereon her signature as co-maker.
The two loans were secured by a real-estate mortgage (Exhibit "6") on Castro's house and lot of
150 square meters, covered by Transfer Certificate of Title No. 7419 of the Office of the Register
of Deeds of Manila.
3
On February 13, 1961, the sheriff of Manila, thru Acting Chief Deputy Sheriff Basilio Magsambol,
sent a notice of sheriff's sale addressed to Castro, announcing that her property covered by
T.C.T. No. 7419 would be sold at public auction on March 10, 1961 to satisfy the obligation
covering the two promissory notes plus interest and attorney's fees.
Upon request by Castro and the Valencias and with conformity of the bank, the auction sale that
was scheduled for March 10, 1961 was postponed for April 10, 1961. But when April 10, 1961
was subsequently declared a special holiday, the sheriff of Manila sold the property covered by
T.C.T. No. 7419 at a public auction sale that was held on April 11, 1961, which was the next
succeeding business day following the special holiday.
Castro alleged that it was only when she received the letter from the Acting Deputy Sheriff on
February 13, 1961, when she learned for the first time that the mortgage contract (Exhibit "6")
which was an encumbrance on her property was for P6.000.00 and not for P3,000.00 and that
she was made to sign as co-maker of the promissory note (Exhibit "2") without her being informed
of this.
On April 4, 1961, Castro filed a suit denominated "Re: Sum of Money," against petitioners Bank
and Desiderio, the Spouses Valencia, Basilio Magsambol and Arsenio Reyes as defendants in
Civil Case No. 46698 before the Court of First Instance of Manila upon the charge, amongst
others, that thru mistake on her part or fraud on the part of Valencias she was induced to sign as
co-maker of a promissory note (Exhibit "2") and to constitute a mortgage on her house and lot to
secure the questioned note. At the time of filing her complaint, respondent Castro deposited the
amount of P3,383.00 with the court a quo in full payment of her personal loan plus interest.
In her amended complaint, Castro prayed, amongst other, for the annulment as far as she is
concerned of the promissory note (Exhibit "2") and mortgage (Exhibit "6") insofar as it exceeds
P3,000.00; for the discharge of her personal obligation with the bank by reason of a deposit of
P3,383.00 with the court a quo upon the filing of her complaint; for the annulment of the
foreclosure sale of her property covered by T.C.T. No. 7419 in favor of Arsenio Reyes; and for
the award in her favor of attorney's fees, damages and cost.
In their answers, petitioners interposed counterclaims and prayed for the dismissal of said
complaint, with damages, attorney's fees and costs. 2
The pertinent facts arrived from the stipulation of facts entered into by the parties as stated by
respondent Court of Appeals are as follows:
Spawning the present litigation are the facts contained in the following
stipulation of facts submitted by the parties themselves:
1. That the capacity and addresses of all the parties in this case are admitted .
2. That the plaintiff was the registered owner of a residential house and lot
located at Nos. 1268-1270 Carola Street, Sampaloc, Manila, containing an
area of one hundred fifty (150) square meters, more or less, covered by T.C.T.
No. 7419 of the Office of the Register of Deeds of Manila;
3. That the signatures of the plaintiff appearing on the following documents
are genuine:
a) Application for Industrial Loan with the Rural Bank of Caloocan, dated
December 7, 1959 in the amount of P3,000.00 attached as Annex A of this
partial stipulation of facts;
b) Promissory Note dated December 11, 1959 signed by the plaintiff in favor
of the Rural Bank of Caloocan for the amount of P3,000.00 as per Annex B of
this partial stipulation of facts;
c) Application for Industrial Loan with the Rural Bank of Caloocan, dated
December 11, 1959, signed only by the defendants, Severino Valencia and
Catalina Valencia, attached as Annex C, of this partial stipulation of facts;
d) Promissory note in favor of the Rural Bank of Caloocan, dated December
11, 1959 for the amount of P3000.00, signed by the spouses Severino
Valencia and Catalina Valencia as borrowers, and plaintiff Maxima Castro, as
a co-maker, attached as Annex D of this partial stipulation of facts;
e) Real estate mortgage dated December 11, 1959 executed by plaintiff
Maxima Castro, in favor of the Rural Bank of Caloocan, to secure the
obligation of P6,000.00 attached herein as Annex E of this partial stipulation of
facts;
All the parties herein expressly reserved their right to present any evidence
they may desire on the circumstances regarding the execution of the above-
mentioned documents.
4. That the sheriff of Manila, thru Acting Chief Deputy Sheriff, Basilio
Magsambol, sent a notice of sheriff's sale, address to the plaintiff, dated
February 13, 1961, announcing that plaintiff's property covered by TCT No.
7419 of the Register of Deeds of the City of Manila, would be sold at public
auction on March 10, 1961 to satisfy the total obligation of P5,728.50, plus
interest, attorney's fees, etc., as evidenced by the Notice of Sheriff's Sale and
Notice of Extrajudicial Auction Sale of the Mortgaged property, attached
herewith as Annexes F and F-1, respectively, of this stipulation of facts;
5. That upon the request of the plaintiff and defendants-spouses Severino
Valencia and Catalina Valencia, and with the conformity of the Rural Bank of
Caloocan, the Sheriff of Manila postponed the auction sale scheduled for
March 10, 1961 for thirty (30) days and the sheriff re-set the auction sale for
April 10, 1961;
6. That April 10, 1961 was declared a special public holiday; (Note: No. 7 is
omitted upon agreement of the parties.)
4
 8. That on April 11, 1961, the Sheriff of Manila, sold at public auction plaintiff's
property covered by T.C.T. No. 7419 and defendant, Arsenio Reyes, was the
highest bidder and the corresponding certificate of sale was issued to him as
per Annex G of this partial stipulation of facts;
9. That on April 16, 1962, the defendant Arsenio Reyes, executed an Affidavit
of Consolidation of Ownership, a copy of which is hereto attached as Annex H
of this partial stipulation of facts;
10. That on May 9, 1962, the Rural Bank of Caloocan Incorporated executed
the final deed of sale in favor of the defendant, Arsenio Reyes, in the amount
of P7,000.00, a copy of which is attached as Annex I of this partial stipulation
of facts;
11. That the Register of Deeds of the City of Manila issued the Transfer
Certificate of Title No. 67297 in favor of the defendant, Arsenio Reyes, in lieu
of Transfer Certificate of Title No. 7419 which was in the name of plaintiff,
Maxima Castro, which was cancelled;
12. That after defendant, Arsenio Reyes, had consolidated his title to the
property as per T.C.T. No. 67299, plaintiff filed a notice of lis pendens with the
Register of Deeds of Manila and the same was annotated in the back of
T.C.T. No. 67299 as per Annex J of this partial stipulation of facts; and
13. That the parties hereby reserved their rights to present additional evidence
on matters not covered by this partial stipulation of facts.
WHEREFORE, it is respectfully prayed that the foregoing partial stipulation of
facts be approved and admitted by this Honorable Court.
As for the evidence presented during the trial, We quote from the decision of the Court of Appeals
the statement thereof, as follows:
In addition to the foregoing stipulation of facts, plaintiff claims she is a 70-year
old widow who cannot read and write the English language; that she can
speak the Pampango dialect only; that she has only finished second grade
(t.s.n., p. 4, December 11, 1964); that in December 1959, she needed money
in the amount of P3,000.00 to invest in the business of the defendant spouses
Valencia, who accompanied her to the defendant bank for the purpose of
securing a loan of P3,000.00; that while at the defendant bank, an employee
handed to her several forms already prepared which she was asked to sign on
the places indicated, with no one explaining to her the nature and contents of
the documents; that she did not even receive a copy thereof; that she was
given a check in the amount of P2,882.85 which she delivered to defendant
spouses; that sometime in February 1961, she received a letter from the
Acting Deputy Sheriff of Manila, regarding the extrajudicial foreclosure sale of
her property; that it was then when she learned for the first time that the
mortgage indebtedness secured by the mortgage on her property was
P6,000.00 and not P3,000.00; that upon investigation of her lawyer, it was
found that the papers she was made to sign were:
(a) Application for a loan of P3,000.00 dated December 7, 1959 (Exh. B-1 and
Exh. 1);
(b) Promissory note dated December 11, 1959 for the said loan of P3,000.00
(Exh- B-2);
(c) Promissory note dated December 11, 1959 for P3,000.00 with the
defendants Valencia spouses as borrowers and appellee as co-maker (Exh.
B-4 or Exh. 2).
The auction sale set for March 10, 1961 was postponed co April 10, 1961
upon the request of defendant spouses Valencia who needed more time
within which to pay their loan of P3,000.00 with the defendant bank; plaintiff
claims that when she filed the complaint she deposited with the Clerk of Court
the sum of P3,383.00 in full payment of her loan of P3,000.00 with the
defendant bank, plus interest at the rate of 12% per annum up to April 3, 1961
(Exh. D).
As additional evidence for the defendant bank, its manager declared that
sometime in December, 1959, plaintiff was brought to the Office of the Bank
by an employee- (t.s.n., p 4, January 27, 1966). She wept, there to inquire if
she could get a loan from the bank. The claims he asked the amount and the
purpose of the loan and the security to he given and plaintiff said she would
need P3.000.00 to be invested in a drugstore in which she was a partner
(t.s.n., p. 811. She offered as security for the loan her lot and house at Carola
St., Sampaloc, Manila, which was promptly investigated by the defendant
bank's inspector. Then a few days later, plaintiff came back to the bank with
the wife of defendant Valencia A date was allegedly set for plaintiff and the
defendant spouses for the processing of their application, but on the day fixed,
plaintiff came without the defendant spouses. She signed the application and
the other papers pertinent to the loan after she was interviewed by the
manager of the defendant. After the application of plaintiff was made,
defendant spouses had their application for a loan also prepared and signed
(see Exh. 13). In his interview of plaintiff and defendant spouses, the manager
of the bank was able to gather that plaintiff was in joint venture with the
defendant spouses wherein she agreed to invest P3,000.00 as additional
capital in the laboratory owned by said spouses (t.s.n., pp. 16-17) 3
The Court of Appeals, upon evaluation of the evidence, affirmed in toto the decision of the Court
of First Instance of Manila, the dispositive portion of which reads:
FOR ALL THE FOREGOING CONSIDERATIONS, the Court renders
judgment and:
(1) Declares that the promissory note, Exhibit '2', is invalid as against plaintiff
herein;
5
 (2) Declares that the contract of mortgage, Exhibit '6', is null and void, in so far
as the amount thereof exceeds the sum of P3,000.00 representing the
principal obligation of plaintiff, plus the interest thereon at 12% per annum;
(3) Annuls the extrajudicial foreclosure sale at public auction of the mortgaged
property held on April 11, 1961, as well as all the process and actuations
made in pursuance of or in implementation thereto;
(4) Holds that the total unpaid obligation of plaintiff to defendant Rural Bank of
Caloocan, Inc., is only the amount of P3,000.00, plus the interest thereon at
12% per annum, as of April 3, 1961, and orders that plaintiff's deposit of
P3,383.00 in the Office of the Clerk of Court be applied to the payment
thereof;
(5) Orders defendant Rural Bank of Caloocan, Inc. to return to defendant
Arsenio Reyes the purchase price the latter paid for the mortgaged property at
the public auction, as well as reimburse him of all the expenses he has
incurred relative to the sale thereof;
(6) Orders defendants spouses Severino D. Valencia and Catalina Valencia to
pay defendant Rural Bank of Caloocan, Inc. the amount of P3,000.00 plus the
corresponding 12% interest thereon per annum from December 11, 1960 until
fully paid; and
Orders defendants Rural Bank of Caloocan, Inc., Jose Desiderio, Jr. and
spouses Severino D. Valencia and Catalina Valencia to pay plaintiff, jointly
and severally, the sum of P600.00 by way of attorney's fees, as well as costs.
In view of the conclusion that the court has thus reached, the counterclaims of
defendant Rural Bank of Caloocan, Inc., Jose Desiderio, Jr. and Arsenio
Reyes are hereby dismissed, as a corollary
The Court further denies the motion of defendant Arsenio Reyes for an Order
requiring Maxima Castro to deposit rentals filed on November 16, 1963,
resolution of which was held in abeyance pending final determination of the
case on the merits, also as a consequence of the conclusion aforesaid. 4
Petitioners Bank and Jose Desiderio moved for the reconsideration 5 of respondent court's
decision. The motion having been denied, 6 they now come before this Court in the instant
petition, with the following Assignment of Errors, to wit:
I THE COURT OF APPEALS ERRED IN NOT DECLARING AS VALID AND
THE COURT OF APPEALS ERRED IN UPHOLDING THE PARTIAL
ANNULMENT OF THE PROMISSORY NOTE, EXHIBIT 2, AND THE
MORTGAGE, EXHIBIT 6, INSOFAR AS THEY AFFECT RESPONDENT
MAXIMA CASTRO VIS-A-VIS PETITIONER BANK DESPITE THE TOTAL
ABSENCE OF EITHER ALLEGATION IN THE COMPLAINT OR
COMPETENT PROOF IN THE EVIDENCE OF ANY FRAUD OR OTHER
UNLAWFUL CONDUCT COMMITTED OR PARTICIPATED IN BY
PETITIONERS IN PROCURING THE EXECUTION OF SAID CONTRACTS
FROM RESPONDENT CASTRO.
II
THE COURT OF APPEALS ERRED IN IMPUTING UPON AND
CONSIDERING PREJUDICIALLY AGAINST PETITIONERS, AS BASIS FOR
THE PARTIAL ANNULMENT OF THE CONTRACTS AFORESAID ITS
FINDING OF FRAUD PERPETRATED BY THE VALENCIA SPOUSES UPON
RESPONDENT CASTRO IN UTTER VIOLATION OF THE RES INTER ALIOS
ACTA RULE.
III
THE COURT OF APPEAL ERRED IN NOT HOLDING THAT, UNDER THE
FACTS FOUND BY IT, RESPONDENT CASTRO IS UNDER ESTOPPEL TO
IMPUGN THE REGULARITY AND VALIDITY OF HER QUESTIONED
TRANSACTION WITH PETITIONER BANK.
IV
THE COURT OF APPEALS ERRED IN NOT FINDING THAT, BETWEEN
PETITIONERS AND RESPONDENT CASTRO, THE LATTER SHOULD
SUFFER THE CONSEQUENCES OF THE FRAUD PERPETRATED BY THE
VALENCIA SPOUSES, IN AS MUCH AS IT WAS THRU RESPONDENT
CASTRO'S NEGLIGENCE OR ACQUIESCENSE IF NOT ACTUAL
CONNIVANCE THAT THE PERPETRATION OF SAID FRAUD WAS MADE
POSSIBLE.
V
THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF THE
DEPOSIT BY RESPONDENT CASTRO OF P3,383.00 WITH THE COURT
BELOW AS A TENDER AND CONSIGNATION OF PAYMENT SUFFICIENT
TO DISCHARGE SAID RESPONDENT FROM HER OBLIGATION WITH
PETITIONER BANK.
VI
BINDING UPON RESPONDENT CASTRO THE HOLDING OF THE SALE ON
FORECLOSURE ON THE BUSINESS DAY NEXT FOLLOWING THE
ORIGINALLY SCHEDULED DATE THEREFOR WHICH WAS DECLARED A
HOLIDAY WITHOUT NECESSITY OF FURTHER NOTICE THEREOF.
6
The issue raised in the first three (3) assignment of errors is whether or not respondent court
correctly affirmed the lower court in declaring the promissory note (Exhibit 2) invalid insofar as
they affect respondent Castro vis-a-vis petitioner bank, and the mortgage contract (Exhibit 6)
valid up to the amount of P3,000.00 only.
Respondent court declared that the consent of Castro to the promissory note (Exhibit 2) where
she signed as co-maker with the Valencias as principal borrowers and her acquiescence to the
mortgage contract (Exhibit 6) where she encumbered her property to secure the amount of
P6,000.00 was obtained by fraud perpetrated on her by the Valencias who had abused her
confidence, taking advantage of her old age and ignorance of her financial need. Respondent
court added that "the mandate of fair play decrees that she should be relieved of her obligation
under the contract" pursuant to Articles 24 7 and 1332 8 of the Civil Code.
The decision in effect relieved Castro of any liability to the promissory note (Exhibit 2) and the
mortgage contract (Exhibit 6) was deemed valid up to the amount of P3,000.00 only which was
equivalent to her personal loan to the bank.
Petitioners argued that since the Valencias were solely declared in the decision to be responsible
for the fraud against Castro, in the light of the res inter alios acta rule, a finding of fraud
perpetrated by the spouses against Castro cannot be taken to operate prejudicially against the
bank. Petitioners concluded that respondent court erred in not giving effect to the promissory note
(Exhibit 2) insofar as they affect Castro and the bank and in declaring that the mortgage contract
(Exhibit 6) was valid only to the extent of Castro's personal loan of P3,000.00.
The records of the case reveal that respondent court's findings of fraud against the Valencias is
well supported by evidence. Moreover, the findings of fact by respondent court in the matter is
deemed final. 9 The decision declared the Valencias solely responsible for the defraudation of
Castro. Petitioners' contention that the decision was silent regarding the participation of the bank
in the fraud is, therefore, correct.
We cannot agree with the contention of petitioners that the bank was defrauded by the Valencias.
For one, no claim was made on this in the lower court. For another, petitioners did not submit
proof to support its contention.
At any rate, We observe that while the Valencias defrauded Castro by making her sign the
promissory note (Exhibit 2) and the mortgage contract (Exhibit 6), they also misrepresented to the
bank Castro's personal qualifications in order to secure its consent to the loan. This must be the
reason which prompted the bank to contend that it was defrauded by the Valencias. But to
reiterate, We cannot agree with the contention for reasons above-mentioned. However, if the
contention deserves any consideration at all, it is in indicating the admission of petitioners that the
bank committed mistake in giving its consent to the contracts.
Thus, as a result of the fraud upon Castro and the misrepresentation to the bank inflicted by the
Valencias both Castro and the bank committed mistake in giving their consents to the contracts.
In other words, substantial mistake vitiated their consents given. For if Castro had been aware of
what she signed and the bank of the true qualifications of the loan applicants, it is evident that
they would not have given their consents to the contracts.
Pursuant to Article 1342 of the Civil Code which provides:
Art. 1342. Misrepresentation by a third person does not vitiate consent, unless
such misrepresentation has created substantial mistake and the same is
mutual.
We cannot declare the promissory note (Exhibit 2) valid between the bank and Castro and the
mortgage contract (Exhibit 6) binding on Castro beyond the amount of P3,000.00, for while the
contracts may not be invalidated insofar as they affect the bank and Castro on the ground of
fraud because the bank was not a participant thereto, such may however be invalidated on the
ground of substantial mistake mutually committed by them as a consequence of the fraud and
misrepresentation inflicted by the Valencias. Thus, in the case of Hill vs. Veloso, 10 this Court
declared that a contract may be annulled on the ground of vitiated consent if deceit by a third
person, even without connivance or complicity with one of the contracting parties, resulted in
mutual error on the part of the parties to the contract.
Petitioners argued that the amended complaint fails to contain even a general averment of fraud
or mistake, and its mention in the prayer is definitely not a substantial compliance with the
requirement of Section 5, Rule 8 of the Rules of Court. The records of the case, however, will
show that the amended complaint contained a particular averment of fraud against the Valencias
in full compliance with the provision of the Rules of Court. Although, the amended complaint
made no mention of mistake being incurred in by the bank and Castro, such mention is not
essential in order that the promissory note (Exhibit 2) may be declared of no binding effect
between them and the mortgage (Exhibit 6) valid up to the amount of P3,000.00 only. The reason
is that the mistake they mutually suffered was a mere consequence of the fraud perpetrated by
the Valencias against them. Thus, the fraud particularly averred in the complaint, having been
proven, is deemed sufficient basis for the declaration of the promissory note (Exhibit 2) invalid
insofar as it affects Castro vis-a-vis the bank, and the mortgage contract (Exhibit 6) valid only up
to the amount of P3,000.00.
The second issue raised in the fourth assignment of errors is who between Castro and the bank
should suffer the consequences of the fraud perpetrated by the Valencias.
In attributing to Castro an consequences of the loss, petitioners argue that it was her negligence
or acquiescence if not her actual connivance that made the fraud possible.
Petitioners' argument utterly disregards the findings of respondent Court of Appeals wherein
petitioners' negligence in the contracts has been aptly demonstrated, to wit:
A witness for the defendant bank, Rodolfo Desiderio claims he had subjected
the plaintiff-appellee to several interviews. If this were true why is it that her
age was placed at 61 instead of 70; why was she described in the application
(Exh. B-1-9) as drug manufacturer when in fact she was not; why was it
placed in the application that she has income of P20,000.00 when according
to plaintiff-appellee, she his not even given such kind of information -the true
fact being that she was being paid P1.20 per picul of the sugarcane
production in her hacienda and 500 cavans on the palay production. 11
From the foregoing, it is evident that the bank was as much , guilty as Castro was, of negligence
in giving its consent to the contracts. It apparently relied on representations made by the Valencia
spouses when it should have directly obtained the needed data from Castro who was the
acknowledged owner of the property offered as collateral. Moreover, considering Castro's
7
personal circumstances – her lack of education, ignorance and old age – she cannot be
considered utterly neglectful for having been defrauded. On the contrary, it is demanded of
petitioners to exercise the highest order of care and prudence in its business dealings with the
Valencias considering that it is engaged in a banking business –a business affected with public
interest. It should have ascertained Castro's awareness of what she was signing or made her
understand what obligations she was assuming, considering that she was giving accommodation
to, without any consideration from the Valencia spouses.
Petitioners further argue that Castro's act of holding the Valencias as her agent led the bank to
believe that they were authorized to speak and bind her. She cannot now be permitted to deny
the authority of the Valencias to act as her agent for one who clothes another with apparent
authority as her agent is not permitted to deny such authority.
The authority of the Valencias was only to follow-up Castro's loan application with the bank. They
were not authorized to borrow for her. This is apparent from the fact that Castro went to the Bank
to sign the promissory note for her loan of P3,000.00. If her act had been understood by the Bank
to be a grant of an authority to the Valencia to borrow in her behalf, it should have required a
special power of attorney executed by Castro in their favor. Since the bank did not, We can rightly
assume that it did not entertain the notion, that the Valencia spouses were in any manner acting
as an agent of Castro.
When the Valencias borrowed from the Bank a personal loan of P3,000.00 evidenced by a
promissory note (Exhibit 2) and mortgaged (Exhibit 6) Castro's property to secure said loan, the
Valencias acted for their own behalf. Considering however that for the loan in which the
Valencias appeared as principal borrowers, it was the property of Castro that was being
mortgaged to secure said loan, the Bank should have exercised due care and prudence by
making proper inquiry if Castro's consent to the mortgage was without any taint or defect. The
possibility of her not knowing that she signed the promissory note (Exhibit 2) as co-maker with
the Valencias and that her property was mortgaged to secure the two loans instead of her own
personal loan only, in view of her personal circumstances – ignorance, lack of education and old
age – should have placed the Bank on prudent inquiry to protect its interest and that of the public
it serves. With the recent occurrence of events that have supposedly affected adversely our
banking system, attributable to laxity in the conduct of bank business by its officials, the need of
extreme caution and prudence by said officials and employees in the discharge of their functions
cannot be over-emphasized.
Question is, likewise, raised as to the propriety of respondent court's decision which declared that
Castro's consignation in court of the amount of P3,383.00 was validly made. It is contended that
the consignation was made without prior offer or tender of payment to the Bank, and it therefore,
not valid. In holding that there is a substantial compliance with the provision of Article 1256 of the
Civil Code, respondent court considered the fact that the Bank was holding Castro liable for the
sum of P6,000.00 plus 12% interest per annum, while the amount consigned was only P3,000.00
plus 12% interest; that at the time of consignation, the Bank had long foreclosed the mortgage
extrajudicially and the sale of the mortgage property had already been scheduled for April 10,
1961 for non-payment of the obligation, and that despite the fact that the Bank already knew of
the deposit made by Castro because the receipt of the deposit was attached to the record of the
case, said Bank had not made any claim of such deposit, and that therefore, Castro was right in
thinking that it was futile and useless for her to make previous offer and tender of payment
directly to the Bank only in the aforesaid amount of P3,000.00 plus 12% interest. Under the
foregoing circumstances, the consignation made by Castro was valid. if not under the strict
provision of the law, under the more liberal considerations of equity.
The final issue raised is the validity or invalidity of the extrajudicial foreclosure sale at public
auction of the mortgaged property that was held on April 11, 1961.
Petitioners contended that the public auction sale that was held on April 11, 1961 which was the
next business day after the scheduled date of the sale on April 10, 1961, a special public holiday,
was permissible and valid pursuant to the provisions of Section 31 of the Revised Administrative
Code which ordains:
Pretermission of holiday. – Where the day, or the last day, for doing any act
required or permitted by law falls on a holiday, the act may be done on the
next succeeding business day.
Respondent court ruled that the aforesaid sale is null and void, it not having been carried out in
accordance with Section 9 of Act No. 3135, which provides:
Section 9. – Notice shall be given by posting notices of the sale for not less
than twenty days in at least three public places of the municipality or city
where the property is situated, and if such property is worth more than four
hundred pesos, such notice shall also be published once a week for at least
three consecutive weeks in a newspaper of general circulation in the
municipality or city.
We agree with respondent court. The pretermission of a holiday applies only "where the day, or
the last day for doing any act required or permitted by law falls on a holiday," or when the last day
of a given period for doing an act falls on a holiday. It does not apply to a day fixed by an office or
officer of the government for an act to be done, as distinguished from a period of time within
which an act should be done, which may be on any day within that specified period. For example,
if a party is required by law to file his answer to a complaint within fifteen (15) days from receipt of
the summons and the last day falls on a holiday, the last day is deemed moved to the next
succeeding business day. But, if the court fixes the trial of a case on a certain day but the said
date is subsequently declared a public holiday, the trial thereof is not automatically transferred to
the next succeeding business day. Since April 10, 1961 was not the day or the last day set by law
for the extrajudicial foreclosure sale, nor the last day of a given period but a date fixed by the
deputy sheriff, the aforesaid sale cannot legally be made on the next succeeding business day
without the notices of the sale on that day being posted as prescribed in Section 9, Act No. 3135.
WHEREFORE, finding no reversible error in the judgment under review, We affirm the same in
toto. No pronouncement as to cost.
SO ORDERED.
Teehankee (Acting, C.J.) Makasiar, Fernandez, Guerrero and Melencio-Herrera, JJ., concur.
8
G.R. No. 143687 July 31, 2001
SPOUSES RAMON ESTANISLAO, JR. and DINA TEOTICO ESTANISLAO, petitioners,
vs.
COURT OF APPEALS, HI-YIELD REALTY, INC., HUMBERTO BASCO, and NORBERTO
VASQUEZ,respondents.
MENDOZA, J.:
1 petitioners' suit and ordered them to pay damages to private respondents. The dispositive portion
This is a petition for review of the decision, dated March 20, 2000, of the Court of Appeals,
affirming the decision of the Regional Trial Court; Branch 128, Caloocan City, which dismissed
petitioners' complaint for annulment of private respondent Hi-Yield Realty, Inc.'s title and instead
ordered petitioners to pay damages and attorney's fees to private respondents, and the appeals
court's resolution,2 dated June 20, 2000, denying petitioners' motion for reconsideration.
The antecedent facts are as follows:
In 1985, spouses Ramon Estanislao, Jr. and Dina Teotico Estanislao, petitioners herein,
mortgaged to respondent Hi-Yield Realty, Inc. a parcel of land, registered in their name under
TCT No. 120717, together with the buildings and improvements thereon. The mortgage was
constituted to secure a loan of P200,000.00. For petitioners' failure to comply with some of its
conditions, the mortgage was extra-judicially foreclosed and the property was sold on December
9, 1988 for P445,000.00 to Hi-Yield Realty, Inc. as the highest bidder. The Certificate of Sale
issued to the highest bidder was registered with the Registry of Deeds of Caloocan City on June
9, 1992.
On June 4, 1993, petitioner Ramon Estanislao, Jr. offered to redeem the property by tendering to
Atty. Humberto Basco, the notary public who conducted the sale, a PCIB manager's check in the
amount of P445,000.00 (Exh. E). The amount covered the auction price alone as petitioner
Estanislao allegedly did not know the amount of interest and other charges/assessments. In his
letter of June 4, 1993 enclosing the manager's check, petitioner Estanislao requested that a
purchaser's statement of interest and other charges be furnished to him.
However, on June 15, 1993, Atty. Basco returned the PCIB check to petitioner Estanislao on the
ground that its amount did not include the interests, charges, and penalties. In his letter (Exh. G;
Exh. 24), Atty. Basco stated that no certificate of redemption could be issued unless the amount
was fully paid and settled.
Without waiting for purchaser's statement of interest and other charges which he had requested,
petitioner Estanislao again tendered to private respondents on June 21, 1993 the PCIB check for
P445,000.00 and another PCIB manager's check (Exh. H) for P81,521.27 to cover the interest.
The checks were, however, rejected by private respondents for being inadequate.
On July 14, 1993, petitioner Estanislao found from the records of the Registry of Deeds of
Caloocan City that their property had been transferred in the name of private respondent Hi-Yield
Realty, Inc. The Affidavit of Consolidation of Ownership, dated June 10, 1993 (Exh. I), was
notarized by Atty. Basco and filed with the Registry of Deeds on June 14, 1993. On June 15,
1993, private respondent Norberto Vasquez, Acting Registrar of Deeds, ordered the annotation of
the Affidavit of Consolidation of Ownership, the cancellation of TCT No. 120717 (Exh. A), and the
issuance of TCT No. 265782 (Exh. J) in the name of Hi-Yield Realty, Inc.
On August 13, 1993, petitioner spouses brought suit against private respondents in the Regional
Trial Court of Caloocan City, seeking the annulment of the Affidavit of Consolidation of
Ownership, the cancellation of TCT No. 265782, and the payment of damages and attorney's
fees.
On December 7, 1995, the Regional Trial Court, Branch 128, Caloocan City, dismissed
of its decision reads:
WHEREFORE, in view of the foregoing premises, this Court decides in favor of
defendants and ordering plaintiff-spouses Ramon Estanislao, Jr. and Dina Teotico
Estanislao the following:
1. To pay defendant Norberto Vasquez P50,000.00 as moral damages and P20,000.00
as attorney's fees;
2. To pay defendant Hi-Yield Realty, Inc. P20,000.00 as attorney's fees; and
3. To pay defendant Humberto B. Basco P20,000.00 as attorney's fees.
Cost against the plaintiff.
SO ORDERED.3
Petitioners appealed to the Court of Appeals which rendered a decision on March 20, 2000
affirming in toto the decision of the trial court. On June 20, 2000, it denied petitioners' motion for
reconsideration. Hence, this petition for review on certiorari.
Petitioners contend that the respondent Court of Appeals erred:
41.1. when it made findings and conclusions in its Decision not within the issues raised
before the trial court, and not supported by the evidence on record;
41.2. when it erroneously included as part of the redemption price the "other charges"
(taxes and assessments) although the petitioner was not aware thereof, and no notice
of taxes and assessment was filed with the Registry of Deeds;
41.3. when it had evidently and utterly disregarded the doctrines laid down by this
Honorable Court in the cases of Rosario vs. Tayug Rural Bank, Inc., 22 SCRA 1220,
and Castillo vs. Nagtalon, 4 SCRA 48, as regards liberal interpretation of redemption
rules, without even discussing, even in passing, why those cases decided by this
Honorable court are not applicable in the case at bar;
9
 41.4. when it also absolutely disregarded the doctrine laid down by this Honorable Court
in the case of Rosales vs. Yboa, 120 SCRA 869, that interests of 1% monthly on the
redemption price shall commence to run only from the date of registration of the
certificate of sale, also without discussing, even in passing, why the said case is not
applicable in the case at bar;
41.5. when it misapplied the case of Conejero, et al. vs. Court of Appeals, et al., 16
SCRA 775, apropos the necessity of consigning the redemption price, in the case at
bar;
41.6. when it ruled that the appellants failed to present any evidence whatsoever in
support of the allegation of "fraudulent collusion and unholy alliance" among the
defendants-appellees with respect to the registration of the Affidavit of Consolidation of
Ownership and the issuance of the new TCT in favor of Hi-Yield Realty;
41.7. when it awarded moral damages and attorney's fees in favor of the respondents
contrary to the prevailing jurisprudence; and
41.8. when it failed to grant the relief prayed for by the petitioners including damages
and attorney's fees.4
We find the petition to be without merit.
First. Section 6 of Act No. 3135 provides:
In all cases in which an extrajudicial sale is made under the special power hereinbefore
referred to, the debtor, his successors in interest or any judicial creditor or judgment
creditor of said debtor, or any person having a lien on the property subsequent to the
mortgage or deed of trust under which the property is sold, may redeem the same at
any time within the term of one year from and after the date of the sale; and such
redemption shall be governed by the provisions of sections four hundred and sixty-four
to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in so far as
these are not inconsistent with the provisions of this Act.5
The references to §§464-466 of the Code of Civil Procedure must be understood to be to §§29-
31 of Rule 39 of the 1964 Rules of Court, which was the applicable law at the time material to this
case. It will be noted that while Act No. 3135, §6 speaks of the right of a debtor to redeem
property sold at auction sale in extrajudicial foreclosure of mortgage "within the term of one year
from and after the date of the sale," which means within a period of 365 days, Rule 39, §30 of the
1964 Rules of Court spoke of the right of a judgment debtor to redeem property sold at auction
"within twelve (12) months after the sale," which means within 360 days on the basis of 30 days
in a month. This is because Art. 13 of the Civil Code provides that "When the laws speak of
years, months, days or nights, it shall be understood that years are of three hundred sixty-five
days each; months, of thirty days; days, of twenty-four hours; and nights, from sunset to sunrise."
The discrepancy was corrected in Rule 39, §28 of the 1997 Rules of Court, effective July 1, 1997,
which changed the period from "twelve (12) months" to "one (1) year."
Although the prevailing law at the time of the auction sale in this case was the 1964 Rules of
Court, the question is actually merely of academic interest in this case, because even if the
period of redemption is 365 days, the tender of the full redemption price made by petitioners on
June 21, 1993 was 12 days late counted from the expiration of the redemption period on June 9,
1993.
The right of redemption should be exercised within the period prescribed by law. As explained by
this Court in Basbas v. Entena:6
. . . [T]he right of legal redemption must be exercised within specified time limits; and
the statutory periods would be rendered meaningless and of easy evasion unless the
redemptioner is required to make an actual tender in good faith of what he believed to
be the reasonable price of the land sought to be redeemed. The existence of the right of
redemption operates to depress the market value of the land until the period expires,
and to render that period indefinite by permitting the tenant to file a suit for redemption,
with either party unable to foresee when final judgment will terminate the action, would
render nugatory the period of two years fixed by the statute for making the redemption
and virtually paralyze any efforts of the landowner to realize the value of his land. No
buyer can be expected to acquire it without any certainty as to the amount for which it
may be redeemed, so that he can recover at least his investment in case of redemption.
In the meantime, the landowner's needs and obligations cannot be met. It is doubtful if
any such result was intended by the statute, absent clear wording to that effect.
Moreover, the tender of payment must be for the full amount of the purchase price. Otherwise, to
allow payment by installments would be to allow the indefinite extension of the redemption
period.7 Consequently, the payment tendered by petitioners on June 4, 1993, while made within
the period of redemption (365 days), was ineffective since the amount offered did not include the
interest but was limited to the purchase price.
Indeed, Rule 39, §30 of the 1964 Rules of Court (now Rule 39, §28 of the 1997 Rules of Civil
Procedure) provided:
The judgment debtor, or redemptioner, may redeem the property from the purchaser, at
any time within twelve (12) months after the sale, on paying the purchaser the amount
of his purchase, with one per centum per month interest thereon in addition, up to the
time of redemption, together with the amount of any assessment or taxes which the
purchaser may have paid thereon after purchase, and interest on such last-named
amount at the same rate . . .
Written notice of any redemption must be given to the officer who made the sale and a
duplicate filed with the registrar of deeds of the province, and if any assessments or
taxes are paid by the redemptioner or if he has or acquires any lien other than that upon
which the redemption was made, notice thereof must in like manner be given to the
officer and filed with the registrar of deeds; if such notice be not filed, the property may
be redeemed without paying such assessments, taxes, or liens.
In Bodiongan v. Court of Appeals,8 it was held:
In order to effect a redemption, the judgment debtor must pay the purchaser the
redemption price composed of the following: (1) the price which the purchaser paid for
the property; (2) interest of 1% per month on the purchase price; (3) the amount of any
10
 assessments or taxes which the purchaser may have paid on the property after the
purchase; and (4) interest of 1% per month on such assessments and taxes . . .
The appellate court erred in ruling that the interest due from the mortgage was P240,300.00, at
one percent monthly interest of the auction price of P445,000.00, computed from the date of sale
on June 9, 1988 [December 9, 1988]. The interest on the auction price should be computed not
from the date of the sale, as the appeals court appears to have done, but from the registration
thereof. Since the period of redemption begins only from the date of the registration of the
certificate of sale in the Registry of Deeds, the computation of the interest on the purchase price
should also be made to commence from that date. 9 Hence, the interest due on the auction price
for 12 months, i.e., from June 9, 1992 to June 9, 1993, is only P53,400.00 (P445,000.00 x 1% x
12 months) and the amount of P81,521.27, which petitioners tendered on June 21, 1993, was in
excess of the accrued interest due. Nevertheless, as the tender of payment of the interest and
the purchase price of P445,000.00 was late, such tender did not effect a valid redemption.
There are additional amounts to be made in order to effect a valid redemption required by law,
but, as respondent Hi-Yield Realty, Inc. failed to comply with certain requirements, petitioners'
failure to pay these additional amounts may be considered excused. As provided in Rule 39, §30
of the 1964 Rules of Court, the redemptioner must also pay the assessment or taxes paid by the
purchaser. However, the latter must give notice to the officer who conducted the sale of the
assessments or taxes paid by him and file the same with the Registry of Deeds. In fact, the
Certificate of Sale, (Exh. C; Exh. 3) issued to Hi-Yield Realty, Inc. in this case clearly stated:
It is hereby required of said highest bidder that a statement of any amount of
assessment or taxes, which may have been paid on account of this purchase, and such
other liens chargeable to a redemptioner, WITH PROOFS THEREOF, all in accordance
with Sec. 30, Rule 39 of the New Rules of Court [now §28 of Rule 39 of the 1997 Rules
of Civil Procedure], should be submitted to this Office, for purposes of computing the
actual amount payable by MORTGAGORS/REDEMPTIONERS, in case of
redemption.10
If no such notice is given, the property may be redeemed without paying such assessments or
taxes.
Petitioners were not furnished by respondent Hi-Yield Realty, Inc. such statement of
account.11 Neither was such statement filed with the Registry of Deeds. Respondent Hi-Yield
Realty, Inc. claimed that a statement of account (Exh. 8-C and Exh. 8-D) was furnished the office
of Atty. Basco, the notary public who had conducted the sale, as received by Elizabeth Roque, an
employee therein.12 However, Atty. Basco denied having received the statement. 13Petitioners
were therefore justified in not paying any assessments or taxes which respondent Hi-Yield
Realty, Inc. may have paid.
Second. Petitioners accuse private respondents of "fraudulent collusion and unholy alliance" in
the registration of the Affidavit of Consolidation of Ownership and the issuance of the new TCT to
Hi-Yield Realty, Inc. We find this allegation to be without basis. As already stated, the period of
redemption expired on June 9, 1993 without petitioners being able to pay the purchase price plus
the interest required by Rule 39, §30 of the 1964 Rules of Court. Hence, the consolidation of
ownership in the purchaser was justified.
Moreover, the records show that Atty. Vasquez, who was at the time Acting Registrar of Deeds of
Caloocan City, approved the registration of the Affidavit of Consolidation of Ownership filed by
the purchaser Hi-Yield Realty, Inc. on June 14, 1993 upon payment by the latter of the
registration fee.14 This was five days after the expiration of redemption period on June 9,
1993.15 Atty. Vasquez denied knowing any of the persons connected with Hi-Yield Realty, Inc. or
Atty. Basco and that he only met them for the first time during the pre-trial.16 For his part, Atty.
Manuel Soriano, Jr., who is the president and chairman of the board of Hi-Yield Realty, Inc.,
testified that he does not personally know Atty. Vasquez, and that he never went to the Registry
of Deeds since a company employee usually took care of the registration process. 17
On the other hand, we find no basis for the award of moral damages to private respondents. The
law presumes good faith, and any person who seeks an award of damages due to acts of another
has the burden of proving that the latter acted in bad faith or with ill motive. 18 It is not enough that
one says he suffered mental anguish, serious anxiety, social humiliation, wounded feelings, and
the like as a result of the actuations of the other party. 19 Proof of moral suffering must be
introduced, otherwise the award for moral damages is not proper. 20 In this case, the evidence
presented by private respondents is insufficient to overcome the presumption of good faith.
Nor can the award of attorney's fees be sustained in the light of the policy that no premium should
be placed on the right to litigate.21 No penalty should be imposed on those who exercise such
right in good faith, even though erroneously. 22 The fact that private respondents incurred
expenses to protect their rights does not necessarily imply that the action which they were
opposing was instituted in bad faith. The award of attorney's fees must be deleted where the
award of moral and exemplary damages are eliminated. 23
WHEREFORE, the decision of the Court of Appeals is AFFIRMED with the MODIFICATION that
the award of moral damages and attorney's fees to private respondents is deleted.
SO ORDERED.
Bellosillo, Quisumbing and De Leon, Jr., JJ ., concur.
Buena, J ., abroad.
Art. 15 Nationality Principle
Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in
the country where they were solemnized, and valid there as such, shall also be valid in this
country, except those prohibited under Articles 35 (1), (4), (5) and (6), 3637 and 38. (17a)
Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the
Filipino spouse shall have capacity to remarry under Philippine law. (As amended by Executive
Order 227)
11
G.R. No. L-23678 June 6, 1967
TESTATE ESTATE OF AMOS G. BELLIS, deceased.
PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.
Vicente R. Macasaet and Jose D. Villena for oppositors appellants.
Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
BENGZON, J.P., J.:
This is a direct appeal to Us, upon a question purely of law, from an order of the Court of First
Instance of Manila dated April 30, 1964, approving the project of partition filed by the executor in
Civil Case No. 37089 therein.1äwphï1.ñët
The facts of the case are as follows:
Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the United States." By
his first wife, Mary E. Mallen, whom he divorced, he had five legitimate children: Edward A. Bellis,
George Bellis (who pre-deceased him in infancy), Henry A. Bellis, Alexander Bellis and Anna
Bellis Allsman; by his second wife, Violet Kennedy, who survived him, he had three legitimate
children: Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he had three illegitimate
children: Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis.
On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in which he directed that
after all taxes, obligations, and expenses of administration are paid for, his distributable estate
should be divided, in trust, in the following order and manner: (a) $240,000.00 to his first wife,
Mary E. Mallen; (b) P120,000.00 to his three illegitimate children, Amos Bellis, Jr., Maria Cristina
Bellis, Miriam Palma Bellis, or P40,000.00 each and (c) after the foregoing two items have been
satisfied, the remainder shall go to his seven surviving children by his first and second wives,
namely: Edward A. Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman, Edwin G.
Bellis, Walter S. Bellis, and Dorothy E. Bellis, in equal shares.1äwphï1.ñët
Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San Antonio, Texas, U.S.A.
His will was admitted to probate in the Court of First Instance of Manila on September 15, 1958.
The People's Bank and Trust Company, as executor of the will, paid all the bequests therein
including the amount of $240,000.00 in the form of shares of stock to Mary E. Mallen and to the
three (3) illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis,
various amounts totalling P40,000.00 each in satisfaction of their respective legacies, or a total of
P120,000.00, which it released from time to time according as the lower court approved and
allowed the various motions or petitions filed by the latter three requesting partial advances on
account of their respective legacies.
On January 8, 1964, preparatory to closing its administration, the executor submitted and filed its
"Executor's Final Account, Report of Administration and Project of Partition" wherein it
reported, inter alia, the satisfaction of the legacy of Mary E. Mallen by the delivery to her of
shares of stock amounting to $240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina
Bellis and Miriam Palma Bellis in the amount of P40,000.00 each or a total of P120,000.00. In the
project of partition, the executor — pursuant to the "Twelfth" clause of the testator's Last Will and
Testament — divided the residuary estate into seven equal portions for the benefit of the
testator's seven legitimate children by his first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their respective
oppositions to the project of partition on the ground that they were deprived of their legitimes as
illegitimate children and, therefore, compulsory heirs of the deceased.
Amos Bellis, Jr. interposed no opposition despite notice to him, proof of service of which is
evidenced by the registry receipt submitted on April 27, 1964 by the executor. 1
After the parties filed their respective memoranda and other pertinent pleadings, the lower court,
on April 30, 1964, issued an order overruling the oppositions and approving the executor's final
account, report and administration and project of partition. Relying upon Art. 16 of the Civil Code,
it applied the national law of the decedent, which in this case is Texas law, which did not provide
for legitimes.
Their respective motions for reconsideration having been denied by the lower court on June 11,
1964, oppositors-appellants appealed to this Court to raise the issue of which law must apply —
Texas law or Philippine law.
In this regard, the parties do not submit the case on, nor even discuss, the doctrine of renvoi,
applied by this Court in Aznar v. Christensen Garcia, L-16749, January 31, 1963. Said doctrine is
usually pertinent where the decedent is a national of one country, and a domicile of another. In
the present case, it is not disputed that the decedent was both a national of Texas and a domicile
thereof at the time of his death.2 So that even assuming Texas has a conflict of law rule providing
that the domiciliary system (law of the domicile) should govern, the same would not result in a
reference back (renvoi) to Philippine law, but would still refer to Texas law. Nonetheless, if Texas
has a conflicts rule adopting the situs theory (lex rei sitae) calling for the application of the law of
the place where the properties are situated, renvoi would arise, since the properties here involved
are found in the Philippines. In the absence, however, of proof as to the conflict of law rule of
Texas, it should not be presumed different from ours.3 Appellants' position is therefore not rested
on the doctrine of renvoi. As stated, they never invoked nor even mentioned it in their arguments.
Rather, they argue that their case falls under the circumstances mentioned in the third paragraph
of Article 17 in relation to Article 16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the
decedent, in intestate or testamentary successions, with regard to four items: (a) the order of
succession; (b) the amount of successional rights; (e) the intrinsic validity of the provisions of the
will; and (d) the capacity to succeed. They provide that —
ART. 16. Real property as well as personal property is subject to the law of the country
where it is situated.
12
 However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may he the nature of the property and
regardless of the country wherein said property may be found.
ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.
Appellants would however counter that Art. 17, paragraph three, of the Civil Code, stating that —
Prohibitive laws concerning persons, their acts or property, and those which have for
their object public order, public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by determinations or conventions
agreed upon in a foreign country.
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not correct.
Precisely, Congress deleted the phrase, "notwithstanding the provisions of this and the next
preceding article" when they incorporated Art. 11 of the old Civil Code as Art. 17 of the new Civil
Code, while reproducing without substantial change the second paragraph of Art. 10 of the old
Civil Code as Art. 16 in the new. It must have been their purpose to make the second paragraph
of Art. 16 a specific provision in itself which must be applied in testate and intestate succession.
As further indication of this legislative intent, Congress added a new provision, under Art. 1039,
which decrees that capacity to succeed is to be governed by the national law of the decedent.
It is therefore evident that whatever public policy or good customs may be involved in our System
of legitimes, Congress has not intended to extend the same to the succession of foreign
nationals. For it has specifically chosen to leave, inter alia, the amount of successional rights, to
the decedent's national law. Specific provisions must prevail over general ones.
Appellants would also point out that the decedent executed two wills — one to govern his Texas
estate and the other his Philippine estate — arguing from this that he intended Philippine law to
govern his Philippine estate. Assuming that such was the decedent's intention in executing a
separate Philippine will, it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50
Phil. 867, 870, a provision in a foreigner's will to the effect that his properties shall be distributed
in accordance with Philippine law and not with his national law, is illegal and void, for his national
law cannot be ignored in regard to those matters that Article 10 — now Article 16 — of the Civil
Code states said national law should govern.
The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A.,
and that under the laws of Texas, there are no forced heirs or legitimes. Accordingly, since the
intrinsic validity of the provision of the will and the amount of successional rights are to be
determined under Texas law, the Philippine law on legitimes cannot be applied to the testacy of
Amos G. Bellis.
Wherefore, the order of the probate court is hereby affirmed in toto, with costs against appellants.
So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro, JJ.,
concur
Art. 16 Testamentary Succession/Conflict Rules
G.R. No. L-16749 January 31, 1963
IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. CHRISTENSEN, DECEASED.
ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of the deceased, Executor
and Heir-appellees,
vs.
HELEN CHRISTENSEN GARCIA, oppositor-appellant.
M. R. Sotelo for executor and heir-appellees.
Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant.
LABRADOR, J.:
This is an appeal from a decision of the Court of First Instance of Davao, Hon. Vicente N. Cusi,
Jr., presiding, in Special Proceeding No. 622 of said court, dated September 14, 1949, approving
among things the final accounts of the executor, directing the executor to reimburse Maria Lucy
Christensen the amount of P3,600 paid by her to Helen Christensen Garcia as her legacy, and
declaring Maria Lucy Christensen entitled to the residue of the property to be enjoyed during her
lifetime, and in case of death without issue, one-half of said residue to be payable to Mrs. Carrie
Louise C. Borton, etc., in accordance with the provisions of the will of the testator Edward E.
Christensen. The will was executed in Manila on March 5, 1951 and contains the following
provisions:
3. I declare ... that I have but ONE (1) child, named MARIA LUCY CHRISTENSEN (now
Mrs. Bernard Daney), who was born in the Philippines about twenty-eight years ago,
and who is now residing at No. 665 Rodger Young Village, Los Angeles, California,
U.S.A.
4. I further declare that I now have no living ascendants, and no descendants except my
above named daughter, MARIA LUCY CHRISTENSEN DANEY.
xxx xxx xxx
7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN, now married to
Eduardo Garcia, about eighteen years of age and who, notwithstanding the fact that she
was baptized Christensen, is not in any way related to me, nor has she been at any
time adopted by me, and who, from all information I have now resides in Egpit, Digos,
Davao, Philippines, the sum of THREE THOUSAND SIX HUNDRED PESOS
(P3,600.00), Philippine Currency the same to be deposited in trust for the said Maria
Helen Christensen with the Davao Branch of the Philippine National Bank, and paid to
her at the rate of One Hundred Pesos (P100.00), Philippine Currency per month until
the principal thereof as well as any interest which may have accrued thereon, is
exhausted..
xxx xxx xxx
13
 12. I hereby give, devise and bequeath, unto my well-beloved daughter, the said MARIA
LUCY CHRISTENSEN DANEY (Mrs. Bernard Daney), now residing as aforesaid at No.
665 Rodger Young Village, Los Angeles, California, U.S.A., all the income from the rest,
remainder, and residue of my property and estate, real, personal and/or mixed, of
whatsoever kind or character, and wheresoever situated, of which I may be possessed
at my death and which may have come to me from any source whatsoever, during her
lifetime: ....
It is in accordance with the above-quoted provisions that the executor in his final account and
project of partition ratified the payment of only P3,600 to Helen Christensen Garcia and proposed
that the residue of the estate be transferred to his daughter, Maria Lucy Christensen.
Opposition to the approval of the project of partition was filed by Helen Christensen Garcia,
insofar as it deprives her (Helen) of her legitime as an acknowledged natural child, she having
been declared by Us in G.R. Nos. L-11483-84 an acknowledged natural child of the deceased
Edward E. Christensen. The legal grounds of opposition are (a) that the distribution should be
governed by the laws of the Philippines, and (b) that said order of distribution is contrary thereto
insofar as it denies to Helen Christensen, one of two acknowledged natural children, one-half of
the estate in full ownership. In amplification of the above grounds it was alleged that the law that
should govern the estate of the deceased Christensen should not be the internal law of California
alone, but the entire law thereof because several foreign elements are involved, that the forum is
the Philippines and even if the case were decided in California, Section 946 of the California Civil
Code, which requires that the domicile of the decedent should apply, should be applicable. It was
also alleged that Maria Helen Christensen having been declared an acknowledged natural child
of the decedent, she is deemed for all purposes legitimate from the time of her birth.
The court below ruled that as Edward E. Christensen was a citizen of the United States and of
the State of California at the time of his death, the successional rights and intrinsic validity of the
provisions in his will are to be governed by the law of California, in accordance with which a
testator has the right to dispose of his property in the way he desires, because the right of
absolute dominion over his property is sacred and inviolable (In re McDaniel's Estate, 77 Cal.
Appl. 2d 877, 176 P. 2d 952, and In re Kaufman, 117 Cal. 286, 49 Pac. 192, cited in page 179,
Record on Appeal). Oppositor Maria Helen Christensen, through counsel, filed various motions
for reconsideration, but these were denied. Hence, this appeal.
The most important assignments of error are as follows:
I Mr. Christensen's next arrival in the Philippines was in July of the year 1913. However,
THE LOWER COURT ERRED IN IGNORING THE DECISION OF THE HONORABLE
SUPREME COURT THAT HELEN IS THE ACKNOWLEDGED NATURAL CHILD OF EDWARD
E. CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING HER OF HER JUST SHARE IN
THE INHERITANCE.
II
THE LOWER COURT ERRED IN ENTIRELY IGNORING AND/OR FAILING TO RECOGNIZE
THE EXISTENCE OF SEVERAL FACTORS, ELEMENTS AND CIRCUMSTANCES CALLING
FOR THE APPLICATION OF INTERNAL LAW.
III
THE LOWER COURT ERRED IN FAILING TO RECOGNIZE THAT UNDER INTERNATIONAL
LAW, PARTICULARLY UNDER THE RENVOI DOCTRINE, THE INTRINSIC VALIDITY OF THE
TESTAMENTARY DISPOSITION OF THE DISTRIBUTION OF THE ESTATE OF THE
DECEASED EDWARD E. CHRISTENSEN SHOULD BE GOVERNED BY THE LAWS OF THE
PHILIPPINES.
IV
THE LOWER COURT ERRED IN NOT DECLARING THAT THE SCHEDULE OF
DISTRIBUTION SUBMITTED BY THE EXECUTOR IS CONTRARY TO THE PHILIPPINE LAWS.
V
THE LOWER COURT ERRED IN NOT DECLARING THAT UNDER THE PHILIPPINE LAWS
HELEN CHRISTENSEN GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE ESTATE IN FULL
OWNERSHIP.
There is no question that Edward E. Christensen was a citizen of the United States and of the
State of California at the time of his death. But there is also no question that at the time of his
death he was domiciled in the Philippines, as witness the following facts admitted by the executor
himself in appellee's brief:
In the proceedings for admission of the will to probate, the facts of record show that the
deceased Edward E. Christensen was born on November 29, 1875 in New York City,
N.Y., U.S.A.; his first arrival in the Philippines, as an appointed school teacher, was on
July 1, 1901, on board the U.S. Army Transport "Sheridan" with Port of Embarkation as
the City of San Francisco, in the State of California, U.S.A. He stayed in the Philippines
until 1904.
In December, 1904, Mr. Christensen returned to the United States and stayed there for
the following nine years until 1913, during which time he resided in, and was teaching
school in Sacramento, California.
in 1928, he again departed the Philippines for the United States and came back here
the following year, 1929. Some nine years later, in 1938, he again returned to his own
country, and came back to the Philippines the following year, 1939.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be
admitted and approved by this Honorable Court, without prejudice to the parties
adducing other evidence to prove their case not covered by this stipulation of
facts. 1äwphï1.ñët
Being an American citizen, Mr. Christensen was interned by the Japanese Military
Forces in the Philippines during World War II. Upon liberation, in April 1945, he left for
the United States but returned to the Philippines in December, 1945. Appellees
14
 Collective Exhibits "6", CFI Davao, Sp. Proc. 622, as Exhibits "AA", "BB" and "CC-
Daney"; Exhs. "MM", "MM-l", "MM-2-Daney" and p. 473, t.s.n., July 21, 1953.)
In April, 1951, Edward E. Christensen returned once more to California shortly after the
making of his last will and testament (now in question herein) which he executed at his
lawyers' offices in Manila on March 5, 1951. He died at the St. Luke's Hospital in the
City of Manila on April 30, 1953. (pp. 2-3)
In arriving at the conclusion that the domicile of the deceased is the Philippines, we are
persuaded by the fact that he was born in New York, migrated to California and resided there for
nine years, and since he came to the Philippines in 1913 he returned to California very rarely and
only for short visits (perhaps to relatives), and considering that he appears never to have owned
or acquired a home or properties in that state, which would indicate that he would ultimately
abandon the Philippines and make home in the State of California.
Sec. 16. Residence is a term used with many shades of meaning from mere temporary
presence to the most permanent abode. Generally, however, it is used to denote
something more than mere physical presence. (Goodrich on Conflict of Laws, p. 29)
As to his citizenship, however, We find that the citizenship that he acquired in California when he
resided in Sacramento, California from 1904 to 1913, was never lost by his stay in the
Philippines, for the latter was a territory of the United States (not a state) until 1946 and the
deceased appears to have considered himself as a citizen of California by the fact that when he
executed his will in 1951 he declared that he was a citizen of that State; so that he appears never
to have intended to abandon his California citizenship by acquiring another. This conclusion is in
accordance with the following principle expounded by Goodrich in his Conflict of Laws.
The terms "'residence" and "domicile" might well be taken to mean the same thing, a
place of permanent abode. But domicile, as has been shown, has acquired a technical
meaning. Thus one may be domiciled in a place where he has never been. And he may
reside in a place where he has no domicile. The man with two homes, between which
he divides his time, certainly resides in each one, while living in it. But if he went on
business which would require his presence for several weeks or months, he might
properly be said to have sufficient connection with the place to be called a resident. It is
clear, however, that, if he treated his settlement as continuing only for the particular
business in hand, not giving up his former "home," he could not be a domiciled New
Yorker. Acquisition of a domicile of choice requires the exercise of intention as well as
physical presence. "Residence simply requires bodily presence of an inhabitant in a
given place, while domicile requires bodily presence in that place and also an intention
to make it one's domicile." Residence, however, is a term used with many shades of
meaning, from the merest temporary presence to the most permanent abode, and it is
not safe to insist that any one use et the only proper one. (Goodrich, p. 29)
The law that governs the validity of his testamentary dispositions is defined in Article 16 of the
Civil Code of the Philippines, which is as follows:
ART. 16. Real property as well as personal property is subject to the law of the country
where it is situated.
However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of
testamentary provisions, shall be regulated by the national law of the person whose
succession is under consideration, whatever may be the nature of the property and
regardless of the country where said property may be found.
The application of this article in the case at bar requires the determination of the meaning of the
term "national law"is used therein.
There is no single American law governing the validity of testamentary provisions in the United
States, each state of the Union having its own private law applicable to its citizens only and in
force only within the state. The "national law" indicated in Article 16 of the Civil Code above
quoted can not, therefore, possibly mean or apply to any general American law. So it can refer to
no other than the private law of the State of California.
The next question is: What is the law in California governing the disposition of personal property?
The decision of the court below, sustains the contention of the executor-appellee that under the
California Probate Code, a testator may dispose of his property by will in the form and manner he
desires, citing the case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P. 2d 952. But appellant
invokes the provisions of Article 946 of the Civil Code of California, which is as follows:
If there is no law to the contrary, in the place where personal property is situated, it is
deemed to follow the person of its owner, and is governed by the law of his domicile.
The existence of this provision is alleged in appellant's opposition and is not denied. We have
checked it in the California Civil Code and it is there. Appellee, on the other hand, relies on the
case cited in the decision and testified to by a witness. (Only the case of Kaufman is correctly
cited.) It is argued on executor's behalf that as the deceased Christensen was a citizen of the
State of California, the internal law thereof, which is that given in the abovecited case, should
govern the determination of the validity of the testamentary provisions of Christensen's will, such
law being in force in the State of California of which Christensen was a citizen. Appellant, on the
other hand, insists that Article 946 should be applicable, and in accordance therewith and
following the doctrine of the renvoi, the question of the validity of the testamentary provision in
question should be referred back to the law of the decedent's domicile, which is the Philippines.
The theory of doctrine of renvoi has been defined by various authors, thus:
The problem has been stated in this way: "When the Conflict of Laws rule of the forum
refers a jural matter to a foreign law for decision, is the reference to the purely internal
rules of law of the foreign system; i.e., to the totality of the foreign law minus its Conflict
of Laws rules?"
On logic, the solution is not an easy one. The Michigan court chose to accept the
renvoi, that is, applied the Conflict of Laws rule of Illinois which referred the matter back
to Michigan law. But once having determined the the Conflict of Laws principle is the
rule looked to, it is difficult to see why the reference back should not have been to
Michigan Conflict of Laws. This would have resulted in the "endless chain of references"
which has so often been criticized be legal writers. The opponents of the renvoi would
have looked merely to the internal law of Illinois, thus rejecting the renvoi or the
15
reference back. Yet there seems no compelling logical reason why the original
reference should be the internal law rather than to the Conflict of Laws rule. It is true
that such a solution avoids going on a merry-go-round, but those who have accepted
the renvoi theory avoid this inextricabilis circulas by getting off at the second reference
and at that point applying internal law. Perhaps the opponents of the renvoi are a bit
more consistent for they look always to internal law as the rule of reference.
Strangely enough, both the advocates for and the objectors to the renvoi plead that
greater uniformity will result from adoption of their respective views. And still more
strange is the fact that the only way to achieve uniformity in this choice-of-law problem
is if in the dispute the two states whose laws form the legal basis of the litigation
disagree as to whether the renvoi should be accepted. If both reject, or both accept the
doctrine, the result of the litigation will vary with the choice of the forum. In the case
stated above, had the Michigan court rejected the renvoi, judgment would have been
against the woman; if the suit had been brought in the Illinois courts, and they too
rejected the renvoi, judgment would be for the woman. The same result would happen,
though the courts would switch with respect to which would hold liability, if both courts
accepted the renvoi.
The Restatement accepts the renvoi theory in two instances: where the title to land is in
question, and where the validity of a decree of divorce is challenged. In these cases the
Conflict of Laws rule of the situs of the land, or the domicile of the parties in the divorce
case, is applied by the forum, but any further reference goes only to the internal law.
Thus, a person's title to land, recognized by the situs, will be recognized by every court;
and every divorce, valid by the domicile of the parties, will be valid everywhere.
(Goodrich, Conflict of Laws, Sec. 7, pp. 13-14.)
X, a citizen of Massachusetts, dies intestate, domiciled in France, leaving movable
property in Massachusetts, England, and France. The question arises as to how this
property is to be distributed among X's next of kin.
Assume (1) that this question arises in a Massachusetts court. There the rule of the
conflict of laws as to intestate succession to movables calls for an application of the law
of the deceased's last domicile. Since by hypothesis X's last domicile was France, the
natural thing for the Massachusetts court to do would be to turn to French statute of
distributions, or whatever corresponds thereto in French law, and decree a distribution
accordingly. An examination of French law, however, would show that if a French court
were called upon to determine how this property should be distributed, it would refer the
distribution to the national law of the deceased, thus applying the Massachusetts statute
of distributions. So on the surface of things the Massachusetts court has open to it
alternative course of action: (a) either to apply the French law is to intestate succession,
or (b) to resolve itself into a French court and apply the Massachusetts statute of
distributions, on the assumption that this is what a French court would do. If it accepts
the so-called renvoidoctrine, it will follow the latter course, thus applying its own law.
This is one type of renvoi. A jural matter is presented which the conflict-of-laws rule of
the forum refers to a foreign law, the conflict-of-laws rule of which, in turn, refers the
matter back again to the law of the forum. This is renvoi in the narrower sense. The
German term for this judicial process is 'Ruckverweisung.'" (Harvard Law Review, Vol.
31, pp. 523-571.)
After a decision has been arrived at that a foreign law is to be resorted to as governing
a particular case, the further question may arise: Are the rules as to the conflict of laws
contained in such foreign law also to be resorted to? This is a question which, while it
has been considered by the courts in but a few instances, has been the subject of
frequent discussion by textwriters and essayists; and the doctrine involved has been
descriptively designated by them as the "Renvoyer" to send back, or the
"Ruchversweisung", or the "Weiterverweisung", since an affirmative answer to the
question postulated and the operation of the adoption of the foreign law in toto would in
many cases result in returning the main controversy to be decided according to the law
of the forum. ... (16 C.J.S. 872.)
Another theory, known as the "doctrine of renvoi", has been advanced. The theory of
the doctrine of renvoi is that the court of the forum, in determining the question before it,
must take into account the whole law of the other jurisdiction, but also its rules as to
conflict of laws, and then apply the law to the actual question which the rules of the
other jurisdiction prescribe. This may be the law of the forum. The doctrine of
the renvoi has generally been repudiated by the American authorities. (2 Am. Jur. 296)
The scope of the theory of renvoi has also been defined and the reasons for its application in a
country explained by Prof. Lorenzen in an article in the Yale Law Journal, Vol. 27, 1917-1918, pp.
529-531. The pertinent parts of the article are quoted herein below:
The recognition of the renvoi theory implies that the rules of the conflict of laws are to
be understood as incorporating not only the ordinary or internal law of the foreign state
or country, but its rules of the conflict of laws as well. According to this theory 'the law of
a country' means the whole of its law.
xxx xxx xxx
Von Bar presented his views at the meeting of the Institute of International Law, at
Neuchatel, in 1900, in the form of the following theses:
(1) Every court shall observe the law of its country as regards the application of foreign
laws.
(2) Provided that no express provision to the contrary exists, the court shall respect:
(a) The provisions of a foreign law which disclaims the right to bind its
nationals abroad as regards their personal statute, and desires that said
personal statute shall be determined by the law of the domicile, or even by the
law of the place where the act in question occurred.
(b) The decision of two or more foreign systems of law, provided it be certain
that one of them is necessarily competent, which agree in attributing the
determination of a question to the same system of law.
xxx xxx xxx
16
 If, for example, the English law directs its judge to distribute the personal estate of an
Englishman who has died domiciled in Belgium in accordance with the law of his
domicile, he must first inquire whether the law of Belgium would distribute personal
property upon death in accordance with the law of domicile, and if he finds that the
Belgian law would make the distribution in accordance with the law of nationality — that
is the English law — he must accept this reference back to his own law.
We note that Article 946 of the California Civil Code is its conflict of laws rule, while the rule
applied in In re Kaufman, Supra, its internal law. If the law on succession and the conflict of laws
rules of California are to be enforced jointly, each in its own intended and appropriate sphere, the
principle cited In re Kaufman should apply to citizens living in the State, but Article 946 should
apply to such of its citizens as are not domiciled in California but in other jurisdictions. The rule
laid down of resorting to the law of the domicile in the determination of matters with foreign
element involved is in accord with the general principle of American law that the domiciliary law
should govern in most matters or rights which follow the person of the owner.
When a man dies leaving personal property in one or more states, and leaves a will
directing the manner of distribution of the property, the law of the state where he was
domiciled at the time of his death will be looked to in deciding legal questions about the
will, almost as completely as the law of situs is consulted in questions about the devise
of land. It is logical that, since the domiciliary rules control devolution of the personal
estate in case of intestate succession, the same rules should determine the validity of
an attempted testamentary dispostion of the property. Here, also, it is not that the
domiciliary has effect beyond the borders of the domiciliary state. The rules of the
domicile are recognized as controlling by the Conflict of Laws rules at the situs property,
and the reason for the recognition as in the case of intestate succession, is the general
convenience of the doctrine. The New York court has said on the point: 'The general
principle that a dispostiton of a personal property, valid at the domicile of the owner, is
valid anywhere, is one of the universal application. It had its origin in that international
comity which was one of the first fruits of civilization, and it this age, when business
intercourse and the process of accumulating property take but little notice of boundary
lines, the practical wisdom and justice of the rule is more apparent than ever. (Goodrich,
Conflict of Laws, Sec. 164, pp. 442-443.)
The conflict of laws rule in California, Article 946, Civil Code, precisely refers back the case, when
a decedent is not domiciled in California, to the law of his domicile, the Philippines in the case at
bar. The court of the domicile can not and should not refer the case back to California; such
action would leave the issue incapable of determination because the case will then be like a
football, tossed back and forth between the two states, between the country of which the
decedent was a citizen and the country of his domicile. The Philippine court must apply its own
law as directed in the conflict of laws rule of the state of the decedent, if the question has to be
decided, especially as the application of the internal law of California provides no legitime for
children while the Philippine law, Arts. 887(4) and 894, Civil Code of the Philippines, makes
natural children legally acknowledged forced heirs of the parent recognizing them.
The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs. Palmaroli, 40 Phil. 105;
Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton vs. Rider Babcock, 52 Phil. 130; and Gibbs
vs. Government, 59 Phil. 293.) cited by appellees to support the decision can not possibly apply
in the case at bar, for two important reasons, i.e., the subject in each case does not appear to be
a citizen of a state in the United States but with domicile in the Philippines, and it does not appear
in each case that there exists in the state of which the subject is a citizen, a law similar to or
identical with Art. 946 of the California Civil Code.
We therefore find that as the domicile of the deceased Christensen, a citizen of California, is the
Philippines, the validity of the provisions of his will depriving his acknowledged natural child, the
appellant, should be governed by the Philippine Law, the domicile, pursuant to Art. 946 of the
Civil Code of California, not by the internal law of California..
WHEREFORE, the decision appealed from is hereby reversed and the case returned to the lower
court with instructions that the partition be made as the Philippine law on succession provides.
Judgment reversed, with costs against appellees.
Padilla, Bautista Angelo, Concepcion, Reyes, Barrera, Paredes, Dizon, Regala and Makalintal,
JJ., concur.
Bengzon, C.J., took no part.

Appellees argue that what Article 16 of the Civil Code of the Philippines pointed out as
the national law is the internal law of California. But as above explained the laws of California
have prescribed two sets of laws for its citizens, one for residents therein and another for those
domiciled in other jurisdictions. Reason demands that We should enforce the California internal
law prescribed for its citizens residing therein, and enforce the conflict of laws rules for the
citizens domiciled abroad. If we must enforce the law of California as in comity we are bound to
go, as so declared in Article 16 of our Civil Code, then we must enforce the law of California in
accordance with the express mandate thereof and as above explained, i.e., apply the internal law
for residents therein, and its conflict-of-laws rule for those domiciled abroad.

It is argued on appellees' behalf that the clause "if there is no law to the contrary in the place
where the property is situated" in Sec. 946 of the California Civil Code refers to Article 16 of the
Civil Code of the Philippines and that the law to the contrary in the Philippines is the provision in
said Article 16 that the national law of the deceased should govern. This contention can not be
sustained. As explained in the various authorities cited above the national law mentioned in
Article 16 of our Civil Code is the law on conflict of laws in the California Civil Code, i.e., Article
946, which authorizes the reference or return of the question to the law of the testator's domicile.
17
G.R. No. L-22595 November 1, 1927
Testate Estate of Joseph G. Brimo, JUAN MICIANO, administrator, petitioner-appellee,
vs.
ANDRE BRIMO, opponent-appellant.
Ross, Lawrence and Selph for appellant.
Camus and Delgado for appellee.
ROMUALDEZ, J.:
The partition of the estate left by the deceased Joseph G. Brimo is in question in this case.
The judicial administrator of this estate filed a scheme of partition. Andre Brimo, one of the
brothers of the deceased, opposed it. The court, however, approved it.
The errors which the oppositor-appellant assigns are:
(1) The approval of said scheme of partition; (2) denial of his participation in the inheritance; (3)
the denial of the motion for reconsideration of the order approving the partition; (4) the approval
of the purchase made by the Pietro Lana of the deceased's business and the deed of transfer of
said business; and (5) the declaration that the Turkish laws are impertinent to this cause, and the
failure not to postpone the approval of the scheme of partition and the delivery of the deceased's
business to Pietro Lanza until the receipt of the depositions requested in reference to the Turkish
laws.
The appellant's opposition is based on the fact that the partition in question puts into effect the
provisions of Joseph G. Brimo's will which are not in accordance with the laws of his Turkish
nationality, for which reason they are void as being in violation or article 10 of the Civil Code
which, among other things, provides the following:
Nevertheless, legal and testamentary successions, in respect to the order of succession
as well as to the amount of the successional rights and the intrinsic validity of their
provisions, shall be regulated by the national law of the person whose succession is in
question, whatever may be the nature of the property or the country in which it may be
situated.
But the fact is that the oppositor did not prove that said testimentary dispositions are not in
accordance with the Turkish laws, inasmuch as he did not present any evidence showing what
the Turkish laws are on the matter, and in the absence of evidence on such laws, they are
presumed to be the same as those of the Philippines. (Lim and Lim vs. Collector of Customs, 36
Phil., 472.)
It has not been proved in these proceedings what the Turkish laws are. He, himself,
acknowledges it when he desires to be given an opportunity to present evidence on this point; so
much so that he assigns as an error of the court in not having deferred the approval of the
scheme of partition until the receipt of certain testimony requested regarding the Turkish laws on
the matter.
The refusal to give the oppositor another opportunity to prove such laws does not constitute an
error. It is discretionary with the trial court, and, taking into consideration that the oppositor was
granted ample opportunity to introduce competent evidence, we find no abuse of discretion on
the part of the court in this particular. There is, therefore, no evidence in the record that the
national law of the testator Joseph G. Brimo was violated in the testamentary dispositions in
question which, not being contrary to our laws in force, must be complied with and
executed. lawphil.net
Therefore, the approval of the scheme of partition in this respect was not erroneous.
In regard to the first assignment of error which deals with the exclusion of the herein appellant as
a legatee, inasmuch as he is one of the persons designated as such in will, it must be taken into
consideration that such exclusion is based on the last part of the second clause of the will, which
says:
Second. I like desire to state that although by law, I am a Turkish citizen, this citizenship
having been conferred upon me by conquest and not by free choice, nor by nationality
and, on the other hand, having resided for a considerable length of time in the
Philippine Islands where I succeeded in acquiring all of the property that I now possess,
it is my wish that the distribution of my property and everything in connection with this,
my will, be made and disposed of in accordance with the laws in force in the Philippine
islands, requesting all of my relatives to respect this wish, otherwise, I annul and cancel
beforehand whatever disposition found in this will favorable to the person or persons
who fail to comply with this request.
The institution of legatees in this will is conditional, and the condition is that the instituted legatees
must respect the testator's will to distribute his property, not in accordance with the laws of his
nationality, but in accordance with the laws of the Philippines.
If this condition as it is expressed were legal and valid, any legatee who fails to comply with it, as
the herein oppositor who, by his attitude in these proceedings has not respected the will of the
testator, as expressed, is prevented from receiving his legacy.
The fact is, however, that the said condition is void, being contrary to law, for article 792 of the
civil Code provides the following:
Impossible conditions and those contrary to law or good morals shall be considered as
not imposed and shall not prejudice the heir or legatee in any manner whatsoever, even
should the testator otherwise provide.
And said condition is contrary to law because it expressly ignores the testator's national law
when, according to article 10 of the civil Code above quoted, such national law of the testator is
the one to govern his testamentary dispositions.
18
Said condition then, in the light of the legal provisions above cited, is considered unwritten, and
the institution of legatees in said will is unconditional and consequently valid and effective even
as to the herein oppositor.

It results from all this that the second clause of the will regarding the law which shall govern it,
and to the condition imposed upon the legatees, is null and void, being contrary to law.

All of the remaining clauses of said will with all their dispositions and requests are perfectly valid
and effective it not appearing that said clauses are contrary to the testator's national law.

Therefore, the orders appealed from are modified and it is directed that the distribution of this
estate be made in such a manner as to include the herein appellant Andre Brimo as one of the
legatees, and the scheme of partition submitted by the judicial administrator is approved in all
other respects, without any pronouncement as to costs.

So ordered.

Street, Malcolm, Avanceña, Villamor and Ostrand, JJ., concur.

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