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G.R.No.L17043

TodayisTuesday,July19,2016

RepublicofthePhilippines
SUPREMECOURT
Manila
ENBANC
G.R.No.L17043January31,1961
NATIVIDADHERRERA,assistedbyherhusbandEMIGDIOSALAZAR,plaintiffsappellants,
vs.
LUYKIMGUANandLINOBANGAYAN,defendantsappellees.
T.delosSantosforplaintiffsappellants.
RafaelC.ClimacoandAbelardoS.Fernandezfordefendantsappellees.
BARRERA,J.:
This is an appeal from the decision of the Court of First Instance of Zamboanga City (a) dismissing plaintiff
appellant'scomplaintfortherecoveryofthree(3)parcelsoflandandtheirproduceinthesumofP320,000.00
and(b)instead,sentencingplaintifftopayP2,000.00forattorney'sfeesandP1,000.00forexpensesoflitigation,
todefendantLinoBangayan,andP2,000.00asattorney'sfeesandP500.00asexpensesoflitigation,totheother
defendantLuyKimGuan.
The pertinent facts as found by the trial court and upon which its decision was predicated are set forth in the
followingportionofthedecisionappealedfrom:
The Plaintiff Natividad Herrera is the legitimate daughter of Luis Herrera, now deceased and who died in
Chinasometimeafterhewenttothatcountryinthelastpartof1931orearlypartof1932.ThesaidLuis
Herrera in his lifetime was the owner of three (3) parcels of land and their improvements, known as Lots
1740,4465and4467ofExpedienteNo.5,G.L.R.O.Record477andthearea,nature,improvementsand
bound of each and every of these three (3) lots are sufficiently described in the complaint filed by the
plaintiffs.
BeforeleavingforChina,however,LuisHerreraexecutedonDecember1,1931,adeedofGeneralPower
of Attorney, Exhibit 'B', which authorized and empowered the defendant Kim Guan, among others to
administerandsellthepropertiesofsaidLuisHerrera.
Lot 1740 was originally covered by Original CertificateTitle 8601 registered in the name of Luis Herrera,
marriedtoGOBang.ThislotwassoldbythedefendantLuyKiminhiscapacityasattorneyinfactofthe
deceased Luis Her to Luy Chay on September 11, 1939, as shown in Exhibit "2", corresponding deed of
sale.Transfer Certificate ofTitle 3162, Exhibit "3", was issued to Luy Chay by virtue of deed of sale. On
August 28, 1941, to secure a loan of P2,00 a deed of mortgage to the Zamboanga Mutual Building and
Association was executed by Luy Chay, Exhibit "4". On January 31, 1947, the said Luy Chay executed a
deedofsale,Exhibit"E",infavorofLinoBangayan.ByvirtueofthisTransferCertificateofTitleT2567was
issuedtoLinoBangayanonJune24,1949,Exhibit"1":
Lots4465and4467wereoriginallyregisteredintheofLuisHerrera,marriedtoGoBang,underOriginal
CertificateofTitleNo.014360,Exhibit"5".OnDecember1,1931,LuisHerrerasoldonehalf()undivided
share and to Herrera and Go Bang, the other half (), as shown by Exhibit "12" and Exhibit "12A", the
latteranannotationmadetheRegisterofDeedsoftheCityofZamboanga,inwhichstatedasfollows:
CanceladoelpresenteCertificadoenvirtuddeunaescrituradetraspasoyensulugarsehaexpedidoel
CertificadodeTNo.494(T13045)delTomo2delLibrodeCertificadodeTransferencias.
(Fdo)R.D.MACROHON
RegistradordeTitulos
CiudaddeZamboanga
On July 23, 1937, Luis Herrera thru his attorneyinfact Luy Kim Guan, one of the defendants, sold to
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Nicomedes Salazar his one half () participation in these two (2) lots, as shown in Exhibit "C", the
corresponding deed of sale for P3,000.00 Transfer Certificate of Title No. T494(T13045) was is to
NicomedesSalazarandtothedefendantLuyKimGuan,Exhibit'7'.OnAugust4,1937,thedefendantLuy
Kim Guan Nicomedes Salazar executed a deed of mortgage in favor of Bank of the Philippine Islands to
securealoanofP3,500.00,Exhibit'6'.OnAugust17,1937,thedefendantLuyKimGuanandNicomedes
Salazar sold Lot 4465 to Carlos Eijansantos for the sum of P100.00 as shown in Exhibit "9", the
correspondingdeedofsale,andTransferCertificateofTitleNo.T2653wasissuedonSeptember7,1939
to Carlos Eijansantos, Exhibit "10". Nicomedes Salazar sold his one half () interest on Lot 4467 to the
defendantLinoBangayanforP3,000.00onFebruary22,1949,Exhibit'B',andthecorrespondingTransfer
CertificateofTitleT2654wasissuedtoLinoBangayanandtoLuyKimGuan,botharecoownersinequal
shares,Exhibit"8".OpinionoftheCityAttorney,Exhibit"p",andanaffidavitofAtty.JoseT.Atilano,Exhibit
"O",statethatLinoBangayanisaFilipinocitizen.
Asadmittedbybothparties(plaintiffsanddefendants),LuisHerreraisnowdeceased,butastothespecific
andprecisedateofhisdeaththeevidenceofbothpartiesfailedtoshow.
Itisthecontentionofplaintiffappellantthatallthetransactionsmentionedintheprecedingquotedportionofthe
decisionwerefraudulentandwereexecutedafterthedeathofLuisHerreraand,consequently,whenthepowerof
attorneywasnolongeroperative.ItisalsoclaimedthatthedefendantsLinoBangayanandLuyKimGuanwho
nowclaimtobetheownersofLotsNos.1740and4467areChinesebynationalityand,therefore,aredisqualified
toacquirerealproperties.Plaintiffappellant,inaddition,questionsthesupposeddeedofsaleallegedlyexecuted
byLuisHerreraonDecember1,1931infavorofdefendantLuyKimGuan,conveyingonehalfinterestonthetwo
lots,Nos.4465and4467,assertingthatwhatwasactuallyexecutedonthatdate,jointlywiththegeneralpowerof
attorney,wasaleasecontractoverthesamepropertiesforaperiodof20yearsforwhichLuyKimGuanpaidthe
sumofP2,000.00.
Wefindallthecontentionsofplaintiffappellantuntenable.Startingwithherclaimthattheseconddeedexecuted
onDecember1,1931byLuisHerrerawasaleasecontractinsteadofadeedofsaleasassertedbydefendant
LuyKimGuan,wefindthattheonlyevidenceinsupportofhercontentionisherowntestimonyandthatofher
husbandtotheeffectthatthedeceasedLuisHerrerashowedthesaiddocumenttothem,andtheyremembered
the same to be a lease contract on the three properties for a period of 20 years in consideration of P2,000.00.
TheirtestimonywassoughttobecorroboratedbythedeclarationoftheclerkofAtty.EnriqueA.Fernandez,who
allegedly notarized the document. Outside of this oral testimony, given more than 23 years after the supposed
instrument was read by them, no other evidence was adduced. On the other hand, defendant Luy Kim Gua
produced in evidence a certification1 signed by the Register of Deeds of Dipolog, Zamboanga (Exh. 11) to the
effectthatadeedofsale,datedDecember1,1931,wasexecutebyLuisHerrerainfavorofLuyKimGuanand
entered in the Primary Book No. 4 as duly registered on September 30, 1936 under Original Certificate ofTitle
No. 14360. It is to be noted that the deed of sale was registered shortly after the issuance in the name of Luis
HerreraofOriginCertificateofTitleNo.14360pursuanttoDecreeNo.59093,coveringthetwolots,Nos.4465
and4467(Exh.5)datedApril7,1936.InvirtueofsaiddeedofsaleofDecember1,1931,OriginalCertificateof
Title No. 1436 was cancelled and Transfer Certificate of Title No. 1304 (Exh. 12) in the names of the conjugal
partnershipofthespousesLuisHerreraandGoBang,onehalfshare,anLuyKimGuan,single,onehalfshare,
wasissuedonSeptember30,1936.Later,oronJuly23,1937,LuyKimGuan,inhiscapacityasattorneyinfact
of Luis Herrera, sold the half interest of the latter in the two parcels o land, in favor of Nicomedes Salazar,
whereuponTCTNo.13045wascancelledandTCTNo.RT657(494T13045(Exh.7)wasissuedinthenames
ofLuyKimGuananNicomedesSalazarinundividedequalshares.OnAugust4,1937,bothLuyKimGuanand
Nicomedes Salazar mortgaged the two parcels in favor of the Bank of the Philippine Islands for the sum of
P3,500.00(Exh.6).OnAugust17,1937,NicomedesSalazarandLuyKimGuasoldtheirrespectivesharesinLot
No.4465toCarloEijansantos(Exh.9),subjecttothemortgage,resultingintheissuanceofTCTNo.2653(Exh.
10)coveringtheentirelotNo.4465inthenameofsaidCarlosEijansantos.OnFebruary23,1949,Nicomedes
SalazarsoldhisshallshareinLotNo.4467toLinoBangayan,asaconsequenceofwhich,TCTNo.2654(Exh.
B)wasissuedcoveringsaidLotNo.4467inthenamesofLuyKimGuanandLinoBangayaninundividedequal
shares.
With respect to Lot No. 1740, the same was sold by Luy Kim Guan, in his capacity as attorneyinfact of Luis
Herrera,onSeptember11,1939toLuyChay(SeeExh.2)who,inAugust,1941,mortgagedthesame(Exh.4)to
the Zamboanga Mutual Loan and BuildingAssociation (See TCT No. 3162 [Exh. 3] issued in the name of Luy
Chay). Later on, Luy Chay sold the entire lot to defendant Lino Bangayan by virtue of the deed of sale dated
January31,1947(Exh.E),andasaconsequencethereof,TCTNo.2567wasissuedinthenameofsaidvendee.
(SeeExh.1).Asaresultofthesevarioustransactions,dulyrecordedinthecorrespondingofficeoftheRegisterof
Deeds,andcoveredbyappropriatetransfercertificatesoftitle,thepropertiesarenowregisteredinthefollowing
manner:LotNo.1740,inthenameofLinoBangayanLotNo.4465,inthenameofCarlosEijansantosandLot
No.4467,inthenamesofLinoBangayanandLuyKimGuaninundividedequalshares.
In the face of these documentary evidence presented by the defendants, the trial court correctly upheld the
contention of the defendants as against that of plaintiffappellant who claims that the second deed executed by
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LuisHerrerain1931wasaleasecontract.Itispertinenttonotewhatthelowercourtstatedinthisregard,thatis,
iftheseconddeedexecutedbyLuisHerrerawasaleasecontractcovering,the3lotsinquestionforaperiodof
twenty(20)years,therewouldhavebeennopurposeforhimtoconstituteLuyKimGuanas.hisattorneyinfact
toadministerandtakechargeofthesamepropertiesalreadycoveredbytheleasecontract.
Coming now to the contention that these transactions are null and void and of no effect because they were
executedbytheattorneyinfactafterthedeathofhisPrincipal,sufficeittosaythatasfoundbythelowercourt,
thedateofdeathofLuisHerrerahasnotbeensatisfactorilyproven.TheonlyevidencepresentedbythePlaintiff
appellantinthisrespectisasupposedletterreceivedfromacertain"Candi",datedatAmoyinNovember,1936,
purporting to give information that Luis Herrera (without mentioning his name) had died inAugust of that year.
Thispieceofevidencewasproperlyrejectedbythelowercourtforlackofidentification.theotherhand,wehave
the testimony of the witness Chung Lian to the effect that when he was inAmoy the year 1940, Luis Herrera
visited him and had a conversation with him, showing that the latter was still alive at the time. Since the
documentshadbeenexecutedtheattorneyinfactonein1937andtheotherin1939,itisevident,ifweareto
believe this testimony, that the documents were executed during the lifetime of the principal. Be that as it may,
evengrantingarguendothatLuisHerreradiddiein1936,plaintiffspresentednoproofandthereisnoindication
intherecord,thattheageLuyKimGuanwasawareofthedeathofhisprinceatthetimehesoldtheproperty.
Thedeathoftheprincipaldoesnotrendertheactofanagentunenforceable,wherethelatterhadnoknowledge
ofsuchextinguishmenttheagency.2
AppellantsalsoraisethequestionofthelegalityofthetitlesacquiredbyLuyChayandLinoBangayan,onground
thattheyaredisqualifiedtoacquirerealpropertiesinthePhilippines.Thispointissimilarlywithoutmebecause
thereisnoevidencetosupporttheclaim.Infact,inthedeedofsaleaswellasinTCTNo.3162issuedtoLuy
Chay, the latter was referred to as a citizen of the Philippines. Nevertheless, the lower court acknowledged the
probability that Luy Chay could have been actually a Chinese citizens.3 At any rate, the property was
subsequently purchased by Lino Bangayan, as a result which TCT No. 3162 in the name of Luy Chay was
cancelledandanothercertificate(TCTNo.T2567)wasissuedinfavorofsaidvendee.
AstoBangayan'squalification,thelowercourtheldthatsaiddefendanthadsufficientlyestablishedhisPhilippine
citizenshipthroughExhibitP,concurredinbytheSecretaryofJustice.Wefindnoreasontodisturbsuchruling.
WithrespecttoLuyKimGuan,whileitistruethatheisaChinesecitizen,nevertheless,inasmuchasheacquired
hisonehalfshareinLotNo.4467in1931,longbeforetheConstitutionwasadopted,hisownershipcannotbe
attackedonaccountofhiscitizenship.
Appellants,inthisappeal,contestthejudgmentofthecourtaquoawardingdefendantsLinoBangayanandLuy
KimGuanattorney'sfeesinthesumofP2,000.00each,andexpensesoflitigationintheamountsofP1,000.00
andP500.00,respectively.Weagreewiththeappellantinthisregard.
ThisCourthaslaiddowntherulethatintheabsenceofstipulation,awinningpartymaybeawardedattorney's
fees only in case plaintiff's action or defendant's stand is so untenable as to amount to gross and evident bad
faith.4 The same thing however, can not be said of the case at bar. As a matter of fact, the trial court itself
declaredthatthecomplaintwasfiledingoodfaith.Attorney'sfees,therefore,cannotbeawardedtodefendants
simply because the judgment was favorable to them and adverse to plaintiff, for it may amount to imposing a
premiumontherighttoredressgrievancesincourt.Andsowithexpensesoflitigation.Awinningpartymaybe
entitledtoexpensesoflitigationonlywherehe,byreasonofplaintiff'sclearlyunjustifiableclaimsordefendant's
unreasonablerefusaltohisdemands,wascompelledtoincursaidexpenditures.Evidently,thefactsofthiscase
donotwarrantthegrantingofsuchlitigationexpensestodefendants.Intheabsenceofproofthattheactionwas
intendedforreasonsotherthanhonest,wemayagreewiththetrialcourtthatthesamemusthavebeeninstituted
byplaintiffsintheirbeliefthattheyhaveavalidcauseagainstthedefendants.
WHEREFORE, and with the above modification, the decision appealed from is hereby affirmed in all other
respects without prejudice to appellants' right to demand from the agent (Luy Kim Guan) an accounting of
proceedsoftheagency,ifsuchrightisstillavailable.Nocosts.Soordered.
Paras,C.J.,Bengzon,Padilla,BautistaAngelo,Labrador,Concepcion,Reyes,J.B.L.,ParedesandDizon,concur.

Footnotes
1ThecorrespondingdeedintheofficeoftheRegisterofDeedswasdestroyedduringthewar.
2Art.1738,oldCivilCodeBuason,etal.v.Panuyas,56O.G.6925.
3Atthedateofthehearing,LuyChaywasbelievedtoalreadydead,hence,hewasnotpresentedincourt.
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4Jimenezv.Bucoy,G.R.No.L10221,February28,1958CastilloV.Samonte,G.R.No.L13146,January

30,1960.
TheLawphilProjectArellanoLawFoundation

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