LIGUEZ V.

COURT OF APPEALS

G.R. No. L-11240, December 18, 1957

FACTS:

Liguez filed a complaint against the widow and heirs of the late Salvador P. Lopez to recover a
parcel of 51.84 hectares of land. Plaintiff averred to be its legal owner, pursuant to a deed of donation
of said land, executed in her favor by the late owner, Salvador P. Lopez. The defense interposed that
the donation was null and void for having an illicit cause or consideration, which was plaintiff's entering
into marital relations with Salvador P. Lopez, a married man; and that the property had been
adjudicated to the appellees as heirs of Lopez by the court.The Court of Appeals held that the deed of
donation was inoperative, and null and void (1) because the husband, Lopez, had no right to donate
conjugal property to the plaintiff appellant; and (2) because the donation was tainted with illegal causa
or consideration (illicit sexual relation), of which donor and donee were participants.

Appellant vigorously contends that the Court of First Instance as well as the Court of Appeals erred in
holding the donation void for having an illicit cause or consideration. It is argued that under Article 1274
of the Civil Code of 1889 (which was the governing law in 1943, when the donation was executed), "in
contracts of pure beneficence the consideration is the liberality of the donor", and that liberality per se
can never be illegal, since it is neither against law or morals or public policy.

ISSUE:

Whether or not the deed of donation made by Lopez in favor of Liguez was valid.

RULING:

Under Article 1274, liberality of the donor is deemed causa only in those contracts that are of "pure"
beneficence; that is to say, contracts designed solely and exclusively to procure the welfare of the
beneficiary, without any intent of producing any satisfaction for the donor; contracts, in other words, in
which the idea of self-interest is totally absent on the part of the transferor.

Here the fact that the late Salvador P. Lopez was not moved exclusively by the desire to benefit
appellant Conchita Liguez, but also to secure her cohabiting with him, so that he could gratify his sexual
impulses. This is clear from the confession of Lopez to the witnesses Rodriguez and Ragay that he was in
love with appellant, but her parents would not agree unless he donated the land in question to her.
Actually, therefore, the donation was but one part of an onerous transaction (at least with appellant's
parents) that must be viewed in its totality. Thus considered, the conveyance was clearly predicated
upon an illicit causa.

Appellant seeks to differentiate between the alleged liberality of Lopez, as causa for the donation in her
favor, and his desire for cohabiting with appellant, as motives that impelled him to make the donation,
and quotes from Manresa and the jurisprudence of this Court on the distinction that must be
maintained between causa and motives. It is well to note, however, that Manresa himself, while
maintaining the distinction and upholding the inoperativeness of the motives of the parties to
determine the validity of the contract, expressly excepts from the rule those contracts that are
conditioned upon the attainment of the motives of either party.

Appellees, as successors of the late donor, being thus precluded from pleading the defense of
immorality or illegal causa of the donation, the total or partial ineffectiveness of the same must be
decided by different legal principles. In this regard, the Court of Appeals correctly held that Lopez could
not donate the entirety of the property in litigation, to the prejudice of his wife Maria Ngo, because said
property was conjugal in character, and the right of the husband to donate community property is
strictly limited by law.

Appellant Conchita Liguez was declared by the Supreme Court entitled to so much of the donated
property as may be found, upon proper liquidation, not to prejudice the share of the widow Maria Ngo
in the conjugal partnership with Salvador P. Lopez or the legitimes of the forced heirs of the latter.

NTEGRATED PACKAGING CORP. vs. COURT OF APPEALS

G.R. No. 115117

JUNE 8, 2000

FACTS:

Petitioner and private respondent executed an order agreement whereby private respondent bound
itself to deliver to petitioner 3,450 reams of printing papers under specified schedule of delivery. As of
July 30, 1979, private respondent had delivered to petitioner 1,097 reams of printing paper out of the
total 3,450 reams stated in the agreement. Petitioner alleged it wrote private respondent to
immediately deliver the balance because further delay would greatly prejudice petitioner. From June 5,
1980 and until July 23, 1981, private respondent delivered again to petitioner various quantities of
printing paper amounting to P766,101.70. However, petitioner encountered difficulties paying private
respondent said amount. Accordingly, private respondent made a formal demand upon petitioner to
settle the outstanding account. Private respondent filed a collection suit against petitioner for the sum
of P766,101.70, representing the unpaid purchase price of printing paper bought by petitioner on credit.
In its answer, petitioner denied the material allegations of the complaint. It alleged that private
respondent was able to deliver only 1,097 reams of printing paper which was short of 2,875 reams, in
total disregard of their agreement; that private respondent failed to deliver the balance of the printing
paper despite demand therefor, hence, petitioner suffered actual damages and failed to realize
expected profits.

ISSUE:

Whether or not private respondent violated the order agreement.

RULING:

The transaction between the parties is a contract of sale whereby private respondent (seller) obligates
itself to deliver printing paper to petitioner (buyer) which, in turn, binds itself to pay its equivalent
(price). Both parties concede that the order agreement gives rise to a reciprocal obligation such that the
obligation of one is dependent upon the obligation of the other. Reciprocal obligations are to be
performed simultaneously, so that the performance of one is conditioned upon the simultaneous
fulfillment of the other. Thus, private respondent undertakes to deliver printing paper of various
quantities subject to petitioner’s corresponding obligation to pay, on a maximum 90-day credit, for
these materials. Clearly, petitioner did not fulfill its side of the contract as its last payment in August
1981 could cover only materials covered by delivery invoices dated September and October 1980. Thus,
private respondent did not violate the order agreement.

BORROMEO VS CA

GR No. L-22962 September 28, 1972

FACTS:

Respondent Jose A Villamor was a distributor of lumber belonging to Mr. Miller who was the
agent of the Insular Lumber Company in Ceb City. Defendant usually borrowed from his friend and
former classmate-petitioner Canuto O. Borromeo several amounts of money. On one occasion, with
some pressing obligation to Mr. Miller, defendant borrowed a large sum of money from Borromeo for
which he mortgaged his land and house in Cebu City. Mr. Miller filed a civil action against the defendant
and attached his properties including those mortgaged to plaintiff, inasmuch as the deed of mortgage in
favor of plaintiff could not be registered as it was not properly drawn up. Plaintiff then pressed for
settlement of his obligation, but defendant instead offered to execute a document of future payment.
Liquidation was made and defendant was found to have owed plaintiff the sum of PhP7220.00, for
which defendant signed a promissory therefor on November 29, 1933 with interest at the rate of 12%
per annum, agreeing to pay ‘as soon as I have money.’ The note further stipulates that the defendant
would waive the right of prescription as prescribed in the Civil Code of Procedure. Plaintiff did not
collect within the 1st ten years since defendant did not have any property attached to his name.
However after the second World War, plaintiff then pressed on his demands. The RTC granted his
motion but the CA reversed the ruling claiming that said period was contrary to law?

ISSUE:

Is said period stipulated in the contract valid?

RULING:

The CA erred in its decision. It should be noted that the wordings in said contracts should not
instantly nullify the intent of the parties. The intent of the parties is clear – that an extension of time be
granted to respondent for payment of his debts.

In effect, the first 10 years should not be considered in the prescription of the contract and that the
next ten years is granted from which the counting of the period should begin.
SUNTAY V. COURT OF APPEALS

G.R. No. 114950, December 19, 1995

FACTS:

Respondent Federico Suntay is the owner of a parcel of land and a rice mill, warehouse, and other
improvements situated in the said land. A rice miller, Federico, in a letter applied as a miller-contractor
of the National Rice and Corn Corporation (NARIC). He informed the NARIC that he had a daily rice mill
output of 400 cavans of palay and warehouse storage capacity of 150,000 cavans of palay. His
application, although prepared by his nephew-lawyer, Rafael Suntay, was disapproved, because at that
time he was tied up with several unpaid loans.

For purposes of circumvention, he had thought of allowing Rafael to make the application for him.
Rafael prepared an absolute deed of sale whereby Federico, for and in consideration of P20,000.00
conveyed to Rafael said parcel of land with all its existing structures. Said deed was notarized as
Document No. 57 and recorded on Page 13 of Book 1, Series of 1962, of the Notarial Register of Atty.
Herminio V. Flores. Less than three months after this conveyance, a counter sale was prepared and
signed by Rafael who also caused its delivery to Federico. Through this counter conveyance, the same
parcel of land with all its existing structures was sold by Rafael back to Federico for the same
consideration of P20,000.00. Although on its face, this second deed appears to have been notarized as
Document No. 56 and recorded on Page 15 of Book 1, Series of 1962, of the notarial register of Atty.
Herminio V. Flores, an examination thereof will show that, recorded as Document No. 56 on Page 13, is
not the said deed of sale but a certain "real estate mortgage on a parcel of land with TCT No. 16157 to
secure a loan of P3,500.00 in favor of the Hagonoy Rural Bank."

Nowhere on page 13 of the same notarial register could be found any entry pertaining to Rafael's deed
of sale. Testifying on this irregularity, Atty. Flores admitted that he failed to submit to the Clerk of Court
a copy of the second deed. Neither was he able to enter the same in his notarial register. Even Federico
himself alleged in his Complaint that, when Rafael delivered the second deed to him, it was neither
dated nor notarized.

Upon the execution and registration of the first deed, Certificate of Title No. 0-2015 in the name of
Federico was cancelled and in lieu thereof, TCT No. T-36714 was issued in the name of Rafael. Even
after the execution of the deed, Federico remained in possession of the property sold in concept of
owner. Significantly, notwithstanding the fact that Rafael became the titled owner of said land and rice
mill, he never made any attempt to take possession thereof at any time, while Federico continued to
exercise rights of absolute ownership over the property.

In a letter, dated August 14, 1969, Federico, through his new counsel, Agrava & Agrava, requested that
Rafael deliver his copy of TCT No. T-36714 so that Federico could have the counter deed of sale in his
favor registered in his name. The request having been obviously turned down, Agrava & Agrava filed a
petition with the Court of First Instance of Bulacan asking Rafael to surrender his owner's duplicate
certificate of TCT No. T-36714. In opposition thereto, Rafael chronicled the discrepancy in the
notarization of the second deed of sale upon which said petition was premised and ultimately concluded
that said deed was a counterfeit or "at least not a public document which is sufficient to transfer real
rights according to law." On September 8, 1969, Agrava & Agrava filed a motion to withdraw said
petition, and, on September 13, 1969, the Court granted the same.

On July 8, 1970, Federico filed a complaint for reconveyance and damages against Rafael. In his answer,
Rafael scoffed at the attack against the validity and genuineness of the sale to him of Federico's land and
rice mill. Rafael insisted that said property was "absolutely sold and conveyed . . . for a consideration of
P20,000.00, Philippine currency, and for other valuable consideration".

While the trial court upheld the validity and genuineness of the deed of sale executed by Federico in
favor of Rafael, which deed is referred to above as Exhibit A, it ruled that the counter-deed, referred to
as Exhibit B, executed by Rafael in favor of Federico, was simulated and without consideration, hence,
null and void ab initio.

Moreover, while the trial court adjudged Rafael as the owner of the property in dispute, it did not go to
the extent of ordering Federico to pay back rentals for the use of the property as the court made the
evidential finding that Rafael simply allowed his uncle to have continuous possession of the property
because or their understanding that Federico would subsequently repurchase the same.

From the aforecited decision of the trial court, both Federico and Rafael appealed. The Court of Appeals
rendered judgment affirming the trial court's decision, with a modification that Federico was ordered to
surrender the possession of the disputed property to Rafael. Counsel of Federico filed a motion for
reconsideration of the aforecited decision. While the motion was pending resolution, Atty. Ricardo M.
Fojas entered his appearance in behalf of the heirs of Rafael who had passed away on November 23,
1988. Atty. Fojas prayed that said heirs be substituted as defendants-appellants in the case. The prayer
for substitution was duly noted by the court in a resolution dated April 6, 1993. Thereafter, Atty. Fojas
filed in behalf of the heirs an opposition to the motion for reconsideration. The parties to the case were
heard on oral argument on October 12, 1993. On December 15, 1993, the Court of Appeals reversed
itself and rendered an amended judgment.

ISSUE:

Whether or not the deed of sale executed by Federico in favor of Rafael is simulated and fictitious and,
hence, null and void.
RULING:

In the aggregate, the evidence on record demonstrate a combination of circumstances from

which may be reasonably inferred certain badges of simulation that attach themselves to the deed of
sale in question. The complete absence of an attempt on the part of the buyer to assert his rights of
ownership over the land and rice mill in question is the most protuberant index of simulation.

The deed of sale executed by Federico in favor of his now deceased nephew, Rafael, is absolutely
simulated and fictitious and, hence, null and void, said parties having entered into a sale transaction to
which they did not intend to be legally bound. As no property was validly conveyed under the deed, the
second deed of sale executed by the late Rafael in favor of his uncle, should be considered ineffective
and unavailing.

The allegation of Rafael that the lapse of seven years before Federico sought the issuance of a new title
in his name necessarily makes Federico's claim stale and unenforceable does not hold water. Federico's
title was not in the hands of a stranger or mere acquaintance; it was in the possession of his nephew
who, being his lawyer, had served him faithfully for many years. Federico had been all the while in
possession of the land covered by his title and so there was no pressing reason for Federico to have a
title in his name issued. Even when the relationship between the late Rafael and Federico deteriorated,
and eventually ended, it is not at all strange for Federico to have been complacent and unconcerned
about the status of his title over the disputed property since he has been possessing the same actually,
openly, and adversely, to the exclusion of Rafael. It was only when Federico needed the title in order to
obtain a collaterized loan that Federico began to attend to the task of obtaining a title in his name over
the subject land and rice mill.

SARMING VS. DY

383 SCRA 131, JUNE 6, 2002

FACTS:

A controversy arose regarding the sale of Lot 4163 which was half-owned by the original defendant,
Silveria Flores, although it was solely registered under her name. The other half was originally owned by
Silveria’s brother, Jose. On January 1956, the heirs of Jose entered into a contract with plaintiff
Alejandra Delfino, for the sale of their one-half share of Lot 4163 after offering the same to their co-
owner, Silveria, who declined for lack of money. Silveria did not object to the sale of said portion to
Alejandra.
Atty. Deogracias Pinili, Alejandra’s lawyer then prepared the document of sale. In the preparation of the
document however, OCT no. 4918-A, covering Lot 5734, and not the correct title covering Lot 4163 was
the one delivered to Pinili.

Unaware of the mistake committed, Alejandra immediately took possession of Lot 4163 and introduced
improvements on the said lot.

Two years later, when Alejandra Delfino purchased the adjoinin portion of the lot she had been
occupying, she discovered that what was designated in the deed, Lot 5734, was the wrong lot. Thus,
Alejandra and the vendors filed for the feformation of the Deed of Sale.

ISSUE:

Whether or not reformation is proper in this case.

RULING:

The Court ruled that reformation is proper in the case at bar. Reformation is that remedy in
equity by means of which a written instrument is made or construed so as to express or inform to the
real intention of the parties.

An action for reformation of instrument under this provision of law may prosper only upon the
concurrence of the following requisites:

(1) there must have been a meeting of the minds of the parties to the contract;

(2) the instrument does not express the true intention of the parties; and

(3) the failure of the instrument to express the true intention of the parties is due to mistake, fraud,
inequitable conduct or accident.

All of these requisites are present in this case. There was a meeting of the minds between the parties to
the contract but the deed did not express the true intention ot the parties due to the designation of the
lot subject of the deed. There is no dispute as to the intention of the parties to sell the land to Alejandra
Delfino but there was a mistake as to the designation of the lot intended to be sold as stated in the
Settlement of Estate and Sale.