Liguez v.

CA, supra

Facts:
Conchita Liguez filed a complaint against the widow and heirs of Salvador Lopez
to recover a parcel of 51.84 hectares of land in Davao. She averred to be its legal
owner, pursuant to a deed of donation executed in her favor by Salvador. At the time
the deed was executed, Conchita was 16. She had also been living with Salvador’s
parents for barely a month. The deed of donation recites that the donor Salvador, “for
and in consideration of his love and affection” for Conchita, and “also for the good and
valuable services rendered to Salvador by Conchita, does by these presents, voluntarily
give, grant and donate”.
The donation was made in view of Salvador’s desire to have sexual relations with
Conchita. Furthermore, Conchita’s parents would not allow Conchita to live with him
unless he first donated the subject land. The donated land originally belonged to the
conjugal partnership of Salvador and his wife, Maria Ngo. The deed of donation was
inoperative, and null and void because: (a) Lopez had no right to donate conjugal
property to Conchita; and (b) the donation was tainted with illegal causa or
consideration.

Issue:
Whether or not the conveyance was predicated on illegal causa.

Ruling:
Yes. Conchita Liguez 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 or the legitimes of Salvador’s forced heirs. Under the cited Art.
1274, liberality of the donor is deemed causa only in contracts that are of “pure”
beneficence, or contracts designed solely and exclusively to procure the welfare of the
beneficiary, without any intent of producing any satisfaction for the donor.
 In this case, Salvador was not moved exclusively by the desire to benefit
Conchita, but also to secure her cohabiting with him, and so that he could gratify his
sexual impulses. This is clear from Salvador’s confession to two witnesses that he was
in love with her 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 Conchita’s parents) that must be viewed in its totality. Thus considered, the
conveyance was clearly predicated upon an illicit causa. Lopez would not have
conveyed the property in question had he known that Conchita would refuse to cohabit
with him. The cohabitation was an implied condition to the donation and being unlawful,
necessarily tainted the donation.
Moreover, the CA erred in applying the pari delicto rule. It cannot be said that
both parties had equal guilt. Salvador was a man advanced in years and mature
experience, and Conchita was only 16 when the donation was made. Her acceptance of
the deed does not imply knowledge of conditions and terms not set forth therein.
Witnesses testified that it was Conchita’s parents who insisted on the donation. The rule
that parties to an illegal contract, if equally guilty, will not be aided by the law but will
both be left where it finds them, has been interpreted by this Court as barring the party
from pleading the illegality of the bargain either as a cause of action or as a defense.
But where the plaintiff can establish a cause of action without exposing its illegality, the
vice does not affect the right to recover.

Rellosa v. Gaw Cheen Hum, 93 Phil. 827 (1953)

Facts:
On February 2, 1944, Dionisio Rellosa sold to Gaw Chee Hun a parcel of land,
together with the house erected thereon, situated in the City of Manila, Philippines, for
the sum of P25,000. The vendor remained in possession of the property under a
contract of lease entered into on the same date between the same parties.
Alleging that the sale was executed subject to the condition that the vendee, being a
Chinese citizen, would obtain the approval of the Japanese Military Administration in
accordance with (seirei) No. 6 issued on April 2, 1943, by the Japanese authorities, and
said approval has not been obtained, and that, even if said requirement were met, the
sale would at all events be void under article XIII, section 5, of our Constitution.
The vendor instituted the present action in the Court of First Instance of Manila
seeking the annulment of the sale.

Issue:
1. Whether the sale was void because it is against the constitution.
2. Whether the petitioner have the sale declared null and void and recover the
property considering the effect of the law governing rescission of contracts.

Ruling:
1. Yes, the court held that under the Constitution, aliens may not acquire private
or public agricultural lands, including residential lands. This matter has been once more
submitted to the court for deliberation, but the ruling was reaffirmed. This ruling fully
disposes of the question touching on the validity of the sale of the property herein
involved.
2. No, even if the plaintiffs can still invoke the Constitution to set aside the sale in
question, they are now prevented from doing so if their purpose is to recover the lands
that they have voluntarily parted with, because of their guilty knowledge that what they
were doing was in violation of the Constitution. They cannot escape this conclusion
because they are presumed to know the law.

Philippine Banking Corp., v. Lui She, 21 SCRA 52 (1967)

Facts:
Justina Santos executed on a contract of lease of real properties in favor of
Wong. The lease was for 50 years, although the lessee was given the right to withdraw
at any time from the agreement.
Subsequently, she executed another contract giving Wong the option to buy the
leased premises for P120,000, payable within ten years at a monthly installment of
P1,000. The option imposed on him the obligation to pay for the food of the dogs and
the salaries of the maids in her household, the charge not to exceed P1,800 a month.
The option was conditioned on his obtaining Philippine citizenship, a petition for which
was then pending in the CFI of Rizal.
It appears, however, that this application for naturalization was withdrawn when it
was discovered that he was not a resident of Rizal. On October 28, 1958 she filed a
petition to adopt him and his children on the erroneous belief that adoption would confer
on them Philippine citizenship. The error was discovered and the proceedings were
abandoned.
In two wills, she bade her legatees to respect the contracts she had entered into
with Wong, but in a codicil of a later date she appears to have a change of heart.
Claiming that the various contracts were made by her because of machinations and
inducements practiced by him, she now directed her executor to secure the annulment
of the contracts.

Issue:
Whether the contracts involving Wong were valid.

Ruling:
No, the contracts show nothing that is necessarily illegal, but considered
collectively, they reveal an insidious pattern to subvert by indirection what the
Constitution directly prohibits. To be sure, a lease to an alien for a reasonable period is
valid. So is an option giving an alien the right to buy real property on condition that he is
granted Philippine citizenship.
 But if an alien is given not only a lease of, but also an option to buy, a piece of
land, by virtue of which the Filipino owner cannot sell or otherwise dispose of his
property, this to last for 50 years, then it becomes clear that the arrangement is a virtual
transfer of ownership whereby the owner divests himself in stages not only of the right
to enjoy the land but also of the right to dispose of it.
Article 1416 of the Civil Code provides, as an exception to the rule on pari
delicto, that “When the agreement is not illegal per se but is merely prohibited, and the
prohibition by law is designed for the protection of the plaintiff, he may, if public policy is
thereby enhanced, recover what he has paid or delivered.” The Constitutional provision
that “Save in cases of hereditary succession, no private agricultural land shall be
transferred or assigned except to individuals, corporations, or associations qualified to
acquire or hold lands of the public domain in the Philippines” is an expression of public
policy to conserve lands for the Filipinos.
Accordingly, the contracts in question are annulled and set aside; the land
subject-matter of the contracts is ordered returned to the estate of Justina Santos.

Frenzel v. Catito, 406 SCRA 55 (2003)

Facts:
Petitioner Alfred Fritz Frenzel is an Australian citizen of German descent. He was
so enamored with Ederlina that he bought her numerous properties such as house and
lot in Quezon City and in Davao City. He also put up a beauty parlor business in the
name of Ederlina. Alfred was unaware that Ederlina was married until her spouse Klaus
Muller wrote a letter to Alfred begging the latter to leave her wife alone.
When Alfred and Ederlinas relationship started deteriorating. Ederlina had not
been able to secure a divorce from Klaus. The latter could charge her for bigamy and
could even involve Alfred, who himself was still married. To avoid complications, Alfred
decided to live separately from Ederlina and cut off all contacts with her.
 On October 15, 1985, Alfred wrote to Ederlinas father, complaining that Ederlina
had taken all his life savings and because of this, he was virtually penniless. He further
accused the Catito family of acquiring for themselves the properties he had purchased
with his own money. He demanded the return of all the amounts that Ederlina and her
family had stolen and turn over all the properties acquired by him and Ederlina during
their coverture.

Issue:
Whether the petitioner could recover the money used in purchasing the several
properties.

Ruling:
No, even if, as claimed by the petitioner, the sales in question were entered into
by him as the real vendee, the said transactions are in violation of the Constitution;
hence, are null and void ab initio. A contract that violates the Constitution and the law, is
null and void and vests no rights and creates no obligations. It produces no legal effect
at all. The petitioner, being a party to an illegal contract, cannot come into a court of law
and ask to have his illegal objective carried out. One who loses his money or property
by knowingly engaging in a contract or transaction which involves his own moral
turpitude may not maintain an action for his losses. To him who moves in deliberation
and premeditation, the law is unyielding. The law will not aid either party to an illegal
contract or agreement; it leaves the parties where it finds them.

Acabal and Nicolas vs. Acabal (G.R. No. 148376. March 31, 2005)

Facts:
The parents of the respondent Villaner Acabal (Alejandro and Felicidad) owned a
parcel of land containing 18.15 hectares situated in Negros Oriental. In 1971, the
parents transferred ownership over the said land for P2,000 to Villaner through a Deed
of Absolute Sale. At that time, Villaner was married to Justiniana Lipajan. - In 1990,
Villaner, already a widower, conveyed the property to petitioner Leonardo Acabal, his
nephew/godson, through a document, which appeared to be a "Deed of Absolute Sale"
for P10,000.00. Subsequently, Leonardo conveyed the same property to petitioner
Ramon Nicolas. - In 1993, Villaner filed an action against Leonardo and Ramon Nicolas
with the Dumaguete RTC for the annulment of the deeds of sale. During the trial,
Villaner argued that his intention was only to rent the property, not to sell it to Leonardo,
and that the document he signed was a lease contract, not a deed of absolute sale.
Villaner also argued that the deed of sale was fabricated and fictitious, as he did not
recognize the signatures of the witnesses within the document. However, he did not
present any evidence to support his claims. - The RTC decided in favor of Leonardo
Acabal and Ramon Nicolas. However, upon appeal to the CA, the RTC decision was
reversed. - Leonardo and Ramon then elevated the case to the SC, arguing that the CA
erred in reversing the RTC decision even though Villaner failed to present a single
witness to prove his arguments.

Issue:
1. Whether or not the CA erred in reversing the RTC ruling.
2. Whether or not the co-heirs of Villaner cannot be bound by such a sale due to
their lack of consent.

Ruling:
1. Yes, the CA erred in reversing the RTC ruling. The burden of proof lies with
the party who makes the allegations. Since it was Villaner who alleged that the deed
was fabricated and fictitious, he must prove it by competent evidence. He must rely on
the strength of his own evidence and not upon the weakness of that of his opponent.
Except for his bare allegation that the transaction was one of lease, he failed to provide
any other evidence to further support his claims.
2. Yes, the co-heirs cannot be bound by such a sale since they did not consent to
it. The subject property was acquired during the marriage of Villaner and Justinana.
Under Art. 160 of the CC, all properties acquired during the marriage are presumed to
belong to the conjugal partnership. Due to the death of Justiniana, Villaner and his
children, as her heirs, have become, in effect, co-owners of the subject property, with
each of them receiving 1/9 share of Justiniana's portion (or 1/18 of the entire conjugal
property). Villaner's share over the whole property, therefore, is 10/18, or 5/9, while his
co-heirs are entitled to 4/9 of the property.

Frenzel vs. Catito (G.R. No. 143958. July 11, 2003)

Facts:
Petitioner Alfred Fritz Frenzel is an Australian citizen of German descent. He was
so enamored with Ederlina that he bought her numerous properties such as house and
lot in Quezon City and in Davao City. He also put up a beauty parlor business in the
name of Ederlina. Alfred was unaware that Ederlina was married until her spouse Klaus
Muller wrote a letter to Alfred begging the latter to leave her wife alone.
When Alfred and Ederlinas relationship started deteriorating. Ederlina had not
been able to secure a divorce from Klaus. The latter could charge her for bigamy and
could even involve Alfred, who himself was still married. To avoid complications, Alfred
decided to live separately from Ederlina and cut off all contacts with her.
On October 15, 1985, Alfred wrote to Ederlinas father, complaining that Ederlina
had taken all his life savings and because of this, he was virtually penniless. He further
accused the Catito family of acquiring for themselves the properties he had purchased
with his own money. He demanded the return of all the amounts that Ederlina and her
family had stolen and turn over all the properties acquired by him and Ederlina during
their coverture.

Issue:
Whether the petitioner could recover the money used in purchasing the several
properties.
Ruling:
No, even if, as claimed by the petitioner, the sales in question were entered into
by him as the real vendee, the said transactions are in violation of the Constitution;
hence, are null and void ab initio. A contract that violates the Constitution and the law, is
null and void and vests no rights and creates no obligations. It produces no legal effect
at all. The petitioner, being a party to an illegal contract, cannot come into a court of law
and ask to have his illegal objective carried out. One who loses his money or property
by knowingly engaging in a contract or transaction which involves his own moral
turpitude may not maintain an action for his losses. To him who moves in deliberation
and premeditation, the law is unyielding. The law will not aid either party to an illegal
contract or agreement; it leaves the parties where it finds them.

Villaroel v. Estrada, 71 Phil. 140 (1940)

Facts:
On May 9, 1912, Alejandro F. Callao, the mother of the defendant Juan F.
Villarroel, obtained from the spouses Mariano Estrada and Severina a loan of P1,000
payable after seven years. Alejandra died, leaving as sole heir to the defendant. The
spouses Mariano Estrada and Severina also died, leaving as sole heir the plaintiff
Bernardino Estrada. On August 9, 1930, the defendant signed a document (Exhibit B)
by which it declares the applicant to owe the amount of P1,000, with an interest of 12
percent per year. This action deals with the collection of this amount.

Issue:
Is the defendant Juan under obligation to pay the loan that already prescribed if
he subsequently declared that he owed it to plaintiff Bernardino?

Ruling:
 Yes. Although the action to recover the original debt has already been prescribed
when the claim was filed in this case, the question that arises in this appeal is mainly
whether, notwithstanding such a prescription, the action (maybe) brought. However, the
present action is not based on the original obligation contracted by the defendant’s
mother, who has already been prescribed, but in which the defendant contracted on
August 9, 1930 upon assuming the fulfillment of that obligation, already prescribed.
Since the defendant is the sole inheritor of the primitive debtor, with the right to succeed
in his inheritance, that debt, brought by his mother legally, although it has lost its
effectiveness by prescription, is now, however, for a moral obligation, which is
consideration Sufficient to create and render effective and enforceable its obligation
voluntarily contracted on August 9, 1930 in Exhibit B.
The rule that a new promise to pay a pre-paid debt must be made by the same
obligated person or by another legally authorized by it, is not applicable to the present
case in which it is not required to fulfill the obligation of the obligee originally, but of
which he voluntarily wanted to assume this obligation.

Fisher v. Robb, 69 Phil. 101 (1939)

Facts:
John C. Robb made a business trip to Shanghai as per request by the board of
directors of the Philippine Greyhound Club, Inc. to study the operation of a dog racing
course. The defendant stayed at American Club where he became acquainted with
Fisher. Upon knowing the purpose of the defendant, the plaintiff, himself asked the
defendant if he could be part of the stockholder. The defendant agreed to it, and the
plaintiff then paid the first installment.
The defendant went back to Manila and the board of directors of PGCI issued a
call for the payment of the second installment in which the plaintiff answered that he had
already paid the same. The PGCI was then replaced by The Philippine Racing Club.
The defendant then sends letters to plaintiff informing him of the critical condition of the
PGCI to reimburse the second installment out of moral responsibility.

Issue:
Whether or not there was sufficient consideration to justify the promise made by
the defendant-appellant in his letters.

Ruling:
No. The Supreme Court held that the promise made by an organizer of a dog
racing course to a stockholder to return to him certain amounts paid by the latter in
satisfaction of his subscription upon the belief of said organizer that he was morally
responsible because of the failure of the enterprise, is not the consideration required by
article 1261 of the Civil Code as an essential element for the legal existence of an
onerous contract which would bind the promisor to comply with his promise.

Article 1261. There is no contract unless the following requisites

exists:

1. The consent of the contracting parties;

2. A definite object which is the subject-matter of the contract;
3. A consideration for the obligation established.

In the present case, while the defendant-appellant told the plaintiff-appellee that he
felt morally responsible for the second payments which had been made to carry out his
plan, and that Mr. Hilscher and he would do everything possible so that the stockholders
who had made second payments may receive the amount paid by them from their
personal funds because they voluntarily assumed the responsibility to make such
payment as soon as they receive from the Philippine racing Club certain shares for their
services as promoters of said organization, it does not appear that the plaintiff-appellee
had consented to said form of reimbursement which he had directly paid to the
Philippine Greyhound Club, Inc., in satisfaction of the second installment. The first
essential requisite required by the cited article 1261 of the Civil Code for the existence
of a contract, does not exists.

Kalalo v. Luz, 34 SCRA 337 (1970)

Facts:
Kalalo the plaintiff is a licensed civil engineer he entered into an agreement with
defendant Alfredo J. Luz a license architect. Plaintiff sent a statement of account to
defendant stating his fee for the service that he rendered. The defendant however did
not pay the plaintiff of the exact amount that he requested because some of appellee’s
services were not in accordance with the agreement and appellee’s claims were not
justified by the services actually rendered. Defendant alleges that plaintiff had no cause
of action, that plaintiff was in estoppel because of certain acts, representations,
admissions and/or silence, which led appellant to believe certain facts to exist and to act
upon said facts.

Issue:
Whether or not under the doctrine of estoppel would apply in this case.

Ruling:
No. The statement of accounts could not estop appellee, because appellant did
not rely thereon as found by the Commissioner. Under article 1431 of the Civil Code, in
order that estoppel may apply the person, to whom representations have been made
and who claims the estoppel in his favor must have relied or acted on such
representations.
The essential elements of estoppel in pais may be considered in relation to the
party sought to be estopped, and in relation to the party invoking the estoppel in his
favor. As related to the party to be estopped, the essential elements are: (1) conduct
amounting to false representation or concealment of material facts or at least calculated
to convey the impression that the facts are otherwise than, and inconsistent with, those
which the party subsequently attempts to assert; (2) intent, or at least expectation that
his conduct shall be acted upon by, or at least influence, the other party; and (3)
knowledge, actual or constructive, of the real facts. As related to the party claiming the
estoppel, the essential elements are (1) lack of knowledge and of the means of
knowledge of the truth as the facts in questions; (2) (reliance, in good faith, upon the
conduct or statements of the party to be estopped; (3) action or inaction based thereon
of such character as to change the position or status of the party claiming the estoppel,
to his injury, detriment or prejudice.
The first essential element in relation to the party sought to be estopped does not
obtain in the instant case, for, as appears in the Report of the Commissioner, appellee
testified “that when he wrote Exhibit 1 and prepared Exhibit 1-A, he had not yet
consulted the services of his counsel and it was only upon advice of counsel that the
terms of the contract were interpreted to him resulting in his subsequent letters to the
defendant demanding payments of his fees pursuant to the contract Exhibit A.” It is
established, therefore, that Exhibit 1-A was written by appellee through ignorance or
mistake. Anent this matter, it has been held that if an act, conduct or misrepresentation
of the party sought to be estopped is due to ignorance founded on innocent mistake,
estoppel will not arise. Regarding the essential elements of estoppel in relation to the
party claiming the estoppel, the first element does not obtain in the instant case, for it
cannot be said that appellant did not know, or at least did not have the means of
knowing, the services rendered to him by appellee and the fees due thereon as
provided in Exhibit A. The second element is also wanting, for, as adverted to, appellant
did not rely on Exhibit 1-A but consistently denied the accounts stated therein. Neither
does the third element obtain, for appellant did not act on the basis of the
representations in Exhibit 1-A, and there was no change in his position, to his own injury
or prejudice.
 Manila Lodge No. 761 Benevolent and Protective Order of the Elks v. CA, 73
SCRA 168 (1976)

Facts:
The Philippine Commission Enacted Act No. 1360 which authorized the City of
Manila to reclaim a portion of Manila Bay. Subsequently Act No. 1657 amended the
former act which states that the City of Manila was authorized to sell or lease the set
aside for hotel site. The City of Manila sells the land to Manila Lodge No. 761 then the
latter sold the land to Tarlac Development Corporation. The City of Manila filed a
petition for re-annotation of its right to repurchased. The TDC then filed a complaint that
the City of Manila was estopped from repurchasing the property.

Issue:
Whether or not the City of Manila was estopped from questioning the validity of
the sale.

Ruling:
The Government is never estopped by mistakes or errors on the pan of its
agents, and estoppel does not apply to a municipal corporation to validate a contract
that is prohibited by law or is against Republic policy, and the sale executed by the City
of Manila-to-Manila Lodge was certainly a contract prohibited by law. Moreover,
estoppel cannot be urged even if the City of Manila accepted the benefits of such
contract of sale and the Manila Lodge No. 761 had performed its part of the agreement,
for to apply the doctrine of estoppel against the City of Manila in this case would be
tantamount to enabling it to do indirectly what it could not do directly.
The sale of the subject property executed by the City of Manila to the Manila
Lodge No. 761, BPOE, was void and inexistent for lack of subject matter. It suffered
from an incurable defect that could not be ratified either by lapse of time or by express
ratification. The Manila Lodge No. 761 therefore acquired no right by virtue of the said
sale. Hence to consider now the contract inexistent as it always has seen, cannot be, as
claimed by the Manila Lodge No. 761, an impairment of the obligations of contracts, for
there was it, contemplation of law, no contract at all.

Miguel v. Catalino, 26 SCRA 234 (1969)

Facts:
Bacaquio was an owner of a parcel of land and subsequently sold it to Catalino
Agyapao, father of defendant Florendo Catalino for for P300.00 in 1928 which of the
purchase price P100.00 was paid and receipted for when the land was surveyed, but
the receipt was lost; the balance was paid after the certificate of title was issued.
Bacaquio. No formal deed of sale was executed, but since the sale in 1928, or for more
than 30 years, vendee Catalino Agyapao and his son, defendant-appellee Florendo
Catalino, had been in possession of the land, in the concept of owner, paying the taxes
thereon and introducing improvements. Grace Ventura, by herself alone, “sold” as per
her Transferor’s Affidavit presented, anew the same land for P300.00 to defendant
Florendo Catalino. Catalino Agyapao in turn sold the land to his son, the defendant
Florendo Catalino. It is worth noting that in the Original Certificate Title of the subject
land, no encumbrance or sale has ever been annotated in the certificate of title. Simeon,
Emilia and Marcelina Miguel, and appellant Grace Ventura brought suit against
Florendo Catalino for the recovery of the land, plaintiffs claiming to be the children and
heirs of the original registered owner, and averred that defendant, without their
knowledge or consent, had unlawfully taken possession of the land, gathered its
produce and unlawfully excluded plaintiffs therefrom. Defendant answered pleading
ownership and adverse possession for 30 years. After trial the Court dismissed the
complaint, declared defendant to be the rightful owner, and ordered the Register of
Deeds to issue a transfer certificate in lieu of the original.

Issue:
Who is the rightful owner of the land? Does the principle of estoppel apply?
Ruling:
The sale of the land by Bacaquio to Catalino Agyapao, defendant’s father, is null
and void ab initio, for lack of executive approval. Section 145(b) of the Administrative
Code of Mindanao and Sulu, providing that no conveyance or encumbrance of real
property shall be made in that department by any non-christian inhabitant of the same,
unless, among other requirements, the deed shall bear indorsed upon it the approval of
the provincial governor or his representative duly authorized in writing for the purpose
and Section 146 of the same Code, declaring that every contract or agreement made in
violation of Section 145 “shall be null and void”.Since the sale is technically invalid,
Bacaquio remained, in law, the owner of the land until his death in 1943, when his title
passed on, by the law on succession, to his heirs, the plaintiffs-appellants.
Notwithstanding, the Court is of the opinion that the judgment in favor of
defendant-appellee Florendo Catalino must be sustained. For despite the invalidity of
his sale to Catalino Agyapao, father of defendant-appellee, the vendor Bacaquio
suffered the latter to enter, possess and enjoy the land in question without protest, from
1928 to 1943, when the seller died; and the appellants, in turn, while succeeding the
deceased, also remained inactive, without taking any step to reivindicate the lot from
1944 to 1962, when the present suit was commenced in court. Even granting
appellants’ proposition that no prescription lies against their father’s recorded title, their
passivity and inaction for more than 34 years (1928-1962) justifies the defendant-
appellee in setting up the equitable defense of laches in his own behalf. As a result, the
action of plaintiffs-appellants must be considered barred and the Court below correctly
so held. Courts cannot look with favor at parties who, by their silence, delay and
inaction, knowingly induce another to spend time, effort and expense in cultivating the
land, paying taxes and making improvements thereon for 30 long years, only to spring
from ambush and claim title when the possessor’s efforts and the rise of land values
offer an opportunity to make easy profit at his expense.
The four elements of laches are present in the case at bar, namely: (a) conduct
on the part of the defendant, or of one under whom he claims, giving rise to the situation
of which complaint is made and for which the complaint seeks a remedy; (b) delay in
asserting the complainant’s rights, the complainant having had knowledge or notice, of
the defendant’s conduct and having been afforded an opportunity to institute a suit; (c)
lack of knowledge or notice on the part of the defendant that the complainant would
assert the right on which he bases his suit; and (d) injury or prejudice to the defendant
in the event relief is accorded to the complainant or the suit is not held to be barred. In
the case at bar, Bacaquio sold the land in 1928 but the sale is void for lack of the
governor’s approval. The vendor, and also his heirs after him, could have instituted an
action to annul the sale from that time, since they knew of the invalidity of the sale,
which is a matter of law; they did not have to wait for 34 years to institute suit. The
defendant was made to feel secure in the belief that no action would be filed against
him by such passivity, and also because he “bought” again the land in 1949 from Grace
Ventura who alone tried to question his ownership; so that the defendant will be plainly
prejudiced in the event the present action is not held to be barred.
The defense of laches applies independently of prescription. Laches is different
from the statute of limitations. Prescription is concerned with the fact of delay, whereas
laches is concerned with the effect of delay. Prescription is a matter of time; laches is
principally a question of the inequity of permitting a claim to be enforced, this inequity
being founded on some change in the condition of the property or the relation of the
parties. The prescription is statutory; laches is not. Laches applies in equity, whereas
prescription applies at law. Prescription is based on fixed time laches is not.
Since the plaintiffs-appellants are barred from recovery, their divestiture of all the
elements of ownership in the land is complete; and the Court a quo was justified in
ordering that Bacaquio’s original certificate be cancelled, and a new transfer certificate
in the name of Florendo Catalino be issued in lieu thereof by the Register of Deeds.

Read: Annotation, 32 SCRA 542

Facts:
 The right to a day in court is dearly cherished and understandably so. Thereby,
one is enabled to seek the protection the law affords whenever he can show injury to his
person or property. Such a right, however, must be seasonably exercised. For there
are policy considerations of the most exigent character that so compel. It could be lost,
then, under circumstances amounting to laches or prescription. So, it is in the appeal
before us filed by appellant Sofia Gonzales Vda. de Delima, plaintiff below, against
appellee, defendant Eleazar G. Tio, from an order of dismissal of the lower court based
on laches and the prescription of the two causes of action for the recovery the disputed
real property, the transaction out of which the litigation arose dating back to 1936 and
the complaint not being filed until May 8, 1964, a period of almost 28 years. As would
thus be readily discernible, the affirmance of the order of dismissal appears to be
indicated.
The complaint filed by plaintiff on May 8, 1964 sets forth two causes of action. In
the first, after stating the fact of ownership of property consisting of the coconut land in
question, it was alleged that on August 27, 1936 a contract or agreement was executed
in writing whereby for the sum of P600.00 the property of plaintiff was sold by her
husband to Guillermo Tio, predecessor-in-interest of defendant, with the right to
repurchase for an unlimited time, such property sold being paraphernal in character
owned jointly by plaintiff with her sister, Dionisia Gonzales Vda. de Ibañez, who was
neither a party to the contract. It was asserted that their respective husbands did enter
into such contract without having been so authorized. There was the claim made that a
year or two after August 27, 1936, plaintiff sought the return of such coconut land, but
she was prevailed upon not to insist on such demand. It was not until May 8, 1964 that
the complaint was actually filed. The second cause of action asserted that, for reasons
unknown to plaintiff, the aforesaid Guillermo Tio included in the transaction another
parcel of adjoining coconut land which she would likewise seek to recover by this
complaint. There was a motion to dismiss, filed on November 16, 1964, based on the
ground that such first and second causes of action allegedly existing in favor of plaintiff
were barred by the statute of limitation, defendant moreover having acquired the
property, subject matter of the complaint, by acquisitive prescription.
Issue:
Whether or not the vendee had the obligation to resell the land at any time that
the vendor could pay him back the amount agreed upon.

Ruling:
No. It is clear from the complaint that plaintiff waited until almost 28 years from
the time of the transaction before she filed the action on May 8, 1964. In a case not too
dissimilar, Rodriguez v. Rodriguez, this Court held: "Appelant's inaction to enforce her
right, for 28 years, cannot be justified by the lame excuse that she assumed that the
transfer was valid." Laurel-Manila v. Galvan, an equally recent decision, this Court
speaking through justice J. B. L. Reyes, is even more relevant. Thus: "We find no
reversible error in the dismissal of the complaint. Even granting that the order of March
19, 1925, authorizing the sale was invalid in that it did not state the amount of the debt
of the deceased nor the value of his personal estate, nor was a time and place for
hearing and resolving the application previously set, nor was, due notice thereof
ordered to be given to the persons interested (although this is disputed by defendants),
the unexplained interval of twenty-nine (29) years that plaintiffs allowed to elapse
(1925?1954) before making any claim or instituting action constitutes laches that places
them in estoppel to question the validity of the probate court's order and of the
transactions executed in pursuance thereof. The lower court was thus on firm ground in
relying on laches for its order of dismissal. Wherefore, the order of dismissal of
November 15, 1966 is affirmed. No pronouncement as to costs.

Mendoza vs. Reyes and CA (G.R. No. L-31618. August 17, 1983)

Facts:
Ponciano and Julia were married in 1915. The properties in question consisting
of Lots 5 and 6, were bought on installment basis. Thus, the spouses jointly obtained a
loan to pay their balance. The corresponding deed of absolute sale was executed where
the vendee named is 'Julia de Reyes'. Her signatures appear over the caption vendee
and those of Ponciano under the phrase: 'with my marital consent. As a result of these
sales, TCTs were issued in the name of "JULIA REYES married to Ponciano Reyes."
While Ponciano was absent attending his farm in Pampanga, Julia sold
absolutely the lots in question Efren V. Mendoza and Inocencia R. De Mendoza, as
vendees, without the knowledge and consent of Ponciano. At the same time the
spouses were living separately and were not in speaking terms.
Ponciano filed a complaint for the annulment of a deed of sale of two parcels of
land contending that said properties were conjugal properties of himself and his wife
and that she had sold them to petitioners "all by herself" and without his knowledge or
consent.
Petitioner Mendozas alleged that the properties were paraphernal properties of
Julia and that they had purchased the same in good faith and for adequate
consideration. Julia testified that she bought the two parcels of land on installment
basis and that the first payment came from her personal funds. The CFI declared the
properties exclusive and paraphernal properties of Julia and ruled that she could validly
dispose of the same without the consent of her husband.

Issue:
Whether or not the disputed properties are conjugal properties.

Ruling:
Yes. The deed of sale is declared null and void with respect to one- half share of
Ponciano.
Article 153 of the Civil Code provides:

ART. 153. The following are conjugal partnership property:

That which is acquired by onerous title during the marriage at the
expense of the common fund, whether the acquisition be for the
partnership, or for only one of the spouses;
 It is sufficient to prove that the property was acquired during the marriage in
order that the same may be deemed conjugal property. There is no question that the
disputed property was acquired by onerous title during the marriage.
Records show that the funds came from loans obtained by the spouses. Under
Article 161 of the Civil Code, all debts and obligations contracted by the husband and
the wife for the benefit of the conjugal partnership are liabilities of the partnership.
Julia’s claim of exclusive ownership is belied by the Income Tax Returns which
she herself prepared and filed in behalf of the conjugal partnership wherein she made
the statement that the rentals paid to her were income of the conjugal partnership, and
she made to appear the properties in question as capital assets of the conjugal
partnership.

Property acquired during a marriage is presumed to be conjugal and the fact that
the land is later registered in the name of only one of the spouses does not destroy its
conjugal nature. If the fact that property acquired during marriage was registered in the
name of the husband alone does not affect its conjugal nature, neither does registration
in the name of the wife.

Salao v. Salao, 70 SCRA 168 (1976)

Facts:
The spouses Manuel Salao and Valentina Ignacio of Barrio Dampalit, Malabon,
Rizal begot four children named Patricio, Alejandra, Juan and Ambrosia. Manuel Salao
died in 1885. His eldest son, Patricio, died in 1886 survived by his only child. Valentin
Salao. His widow died on May 28, 1914. After her death, her estate was administered
by her daughter Ambrosia. It was partitioned extrajudicially in a notarized deed. The
deed was signed by her four legal heirs, namely, her three children, Alejandra, Juan and
Ambrosia, and her grandson, Valentin Salao, in representation of his deceased father,
Patricio. Prior to the death of Valentina Ignacio her two children, Juan Y. Salao, Sr. and
Ambrosia Salao, secured a Torrens title in their names for a forty-seven-hectare
Calunuran fishpond. Juan Y. Salao, Sr. died on November 3, 1931 at the age of eighty
years. His nephew, Valentin Salao, died on February 9, 1933 at the age of sixty years
according to the death certificate. The intestate estate of Valentin Salao was partitioned
extrajudicially between his two daughters, Benita Salao-Marcelo and Victorina Salao-
Alcuriza. His estate consisted of the two fishponds which he had inherited in 1918 from
his grandmother, Valentina Ignacio. Ambrosia Salao donated to her grandniece, plaintiff
Benita Salao, three lots. It was only after Ambrosia Salao’s death that she
thought of filing an action for the reconveyance of the Calunuran fishpond which was
allegedly held in trust and which had become the sole property of Juan Salao y
Santiago.
During the Japanese occupation and about a year before Ambrosia Salao’s
death on September 14, 1945 due to senility, she donated her one-half proindiviso
share in the two fishponds in question to her nephew, Juan S. Salao, Jr. At that time,
she was living with Juani’s family. He was already the owner of the the other half of the
said fishponds, having inherited it from his father, Juan Y. Salao, Sr. The deed of
denotion included other pieces of real property owned by Ambrosia.

Issue:
Whether or not plaintiffs have successional rights to Ambrosia’s share.

Ruling:
No. The plaintiffs would not have any successional rights to Ambrosia’s share.
The sole legal heir of Ambrosia was her nephew, Juan, Jr., her nearest relative within
the third degree. Valentin Salao, if living in 1945 when Ambrosia died, would have been
also her legal heir, together with his first cousin, Juan, Jr. (Juani). Benita Salao, the
daughter of Valentin, could not represent him in the succession to the estate of
Ambrosia since in the collateral line, representation takes place only in favor of the
children of brothers or sisters whether they be of the full or half blood is (Art 972, Civil
Code). The nephew excludes a grandniece like Benita Salao or great-gandnephews like
the plaintiffs Alcuriza.
 Fabian v. Fabian, 22 SCRA 231 (1968)

Facts:
Pablo Fabian bought from the Philippine Government lot 164 of the Friar Lands
Estate in Muntinlupa, Rizal. By virtue of this purchase, he was issued sale certificate
547. He died on August 2, 1928, survived by four children, namely, Esperanza, Benita I,
Benita II, and Silbina.
On October 5, 1928 Silbina Fabian and Teodora Fabian, niece of the deceased,
executed an affidavit. On the strength of this affidavit, sale certificate 547 was assigned
to them.
The acting Director of Lands, on behalf of the Government, sold lot 164 to Silbina
Fabian Teodora Fabian. The vendees’ spouses forthwith took physical possession
thereof, cultivated it, and appropriated the produce. In that same year, they declared the
lot in their names for taxation purposes. In 1937 the RD of Rizal issued a TCT over lot
164 in their names. They later subdivided the lot into 2 equal parts.
The plaintiffs filed the present action for reconveyance against the defendants’
spouses, averring that Silbina and Teodora, through fraud perpetrated in their affidavit
aforesaid. That by virtue of this affidavit, the said defendants succeeded in having the
sale certificate assigned to them and thereafter in having lot 164 covered by said
certificate transferred in their names; and that by virtue also of these assignment and
transfer, the defendants succeeded fraudulently in having lot 164 registered in their
names. They further allege that the land has not been transferred to an innocent
purchaser for value. A reconveyance thereof is prayed for.
In their answer, the defendants’ spouses claim that Pablo Fabian was not the
owner of lot 164 at the time of his death on August 2, 1928 because he had not paid in
full the amortizations on the lot; that they are the absolute owners thereof, having
purchased it from the Government, and from that year having exercised all the attributes
of ownership thereof up to the present; and that the present action for reconveyance
has already prescribed. The dismissal of the complaint is prayed for.
The lower court rendered judgment declaring that the defendants’ spouses had
acquired a valid and complete title to the property by acquisitive prescription, and
accordingly dismissed the complaint. The latter’s motion for reconsideration was
thereafter denied. Hence, the present recourse.

Issue:
1. Was Pablo Fabian the owner of lot 164 at the time of his death, in the face of
the fact, admitted by the defendants-appellees, that he had not then paid the entire
purchase price thereof?
2. May laches constitute a bar to an action to enforce a constructive trust?
3. Has title to the land vested in the appellees through the mode of acquisitive
prescription?

Ruling:
1. Yes. Lot 164 was a part of the Friar Lands Estate of Muntinlupa, Rizal; its sale
to Pablo Fabian was therefore governed by Act 1120, otherwise known as the Friar
Lands Act. While under section 15 of the said Act, title to the land sold is reserved to the
Government until the purchaser makes full payment of all the required installments and
the interest thereon, this legal reservation refers to the bare, naked title. The equitable
and beneficial title really went to the purchaser the moment he paid the first installment
and was given a certificate of sale. The reservation of the title in favor of the
Government is made merely to protect the interest of the Government so as to preclude
or prevent the purchaser from encumbering or disposing of the lot purchased before the
payment in full of the purchase price. Outside of this protection the Government retains
no right as an owner. For instance, after issuance of the sales certificate and pending
payment in full of the purchase price, the Government may not sell the lot to another. It
may not even encumber it. It may not occupy the land to use or cultivate; neither may it
lease it or even participate or share in its fruits. In other words, the Government does
not and cannot exercise the rights and prerogatives of owner. And when said purchaser
finally pays the final installment on the purchase price and is given a deed of
conveyance and a certificate of title, the title at least in equity, retroacts to the time he
first occupied the land, paid the first installment and was issued the corresponding
certificate of sale. In other words, pending the completion of the payment of the
purchase price, the purchaser is entitled to all the benefits and advantages which may
accrue to the land as well as suffer the losses that may befall it.
2. The assignment and sale of the lot to the defendants Silbina and Teodora
were therefore null and void. To the extent of the participation of the appellants,
application must be made of the principle that if property is acquired through fraud, the
person obtaining it is considered a trustee of an implied trust for the benefit of the
person from whom the property comes.
3. it is already settled in this jurisdiction that an action for reconveyance of real
property based upon a constructive or implied trusts, resulting from fraud, may be
barred by the statute of limitations. the discovery in that case being deemed to have
taken place when new certificates of title were issued exclusively in the names of the
respondents therein.

Bueno v. Reyes, 27 SCRA 1179 (1969)

Facts:

Issue:

Ruling:
 Tamayo v. Calleja, 46 SCRA 27 (1972)

Facts:

Issue:

Ruling:

Heirs of Sanjorjo vs. Quijano (GR. No. 140457. January 19, 2005)

Facts:

Issue:

Ruling:

Aznar Brothers Realty Company vs. Aying (GR No. 144773. May 16, 2005)
Facts:

Issue:

Ruling: