sales cases- parties to a contract

8/17/2019 Sales Cases- Parties to a Contract

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Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 176474 November 27, 2008

HEIRS O !RTURO RE"ES, re#re$e%&e' b( Eve)(% R. S*% +e%*ve%&r*, petitioners,vs.E-EN! SOCCO+E-TR!N, respondent.

D E C I S I O N

CHICON!/!RIO, J.

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision1dated1 !anuar" #$$% rendered b" the Court of &ppeals in C&'(.R. )P *o. +$%%, which affir-ed theDecision# dated $ !une #$$ of the ffice of the President, in .P. Case *o. $#'&'$$, approving theapplication of respondent /lena )occo'0eltran to purchase the subect propert".

The subect propert" in this case is a parcel of land originall" identified as 2ot *o. %'0, situated in 3a-ora)treet, Dinalupihan, 0ataan, with a total area of %$ suare -eters. t was originall" part of a larger parcel of land, -easuring 1,$## suare -eters, allocated to the )pouses Marcelo 2auian and Constancia )occo6)pouses 2auian7, who paid for the sa-e with !apanese -one". 8hen Marcelo died, the propert" was leftto his wife Constancia. 9pon Constancia:s subseuent death, she left the original parcel of land, along withher other propert", with her heirs ; her siblings, na-el"< =ilo-ena /li>a )occo, sabel )occo de ?ipolito,Miguel R. )occo, and /lena )occo'0eltran. Pursuant to an unnotari>ed docu-ent entitled @/Atraudicial)ettle-ent of the /state of the Deceased Constancia R. )occo,@ eAecuted b" Constancia:s heirs so-eti-e in1B%5, the parcel of land was partitioned into three lots;2ot *o. %'&, 2ot *o. %'0, and 2ot *o. %'C.4 Thesubect propert", 2ot *o. %'0, was adudicated to respondent, but no title had been issued in her na-e.

n #5 !une 1BB+, respondent /lena )occo'0eltran filed an application for the purchase of 2ot *o. %'0 before the Depart-ent of &grarian Refor- 6D&R7, alleging that it was adudicated in her favor in the eAtra' udicial settle-ent of Constancia )occo:s estate.5

Petitioners herein, the heirs of the late &rturo Re"es, filed their protest to respondent:s petition before theD&R on the ground that the subect propert" was sold b" respondent:s brother, Miguel R. )occo, in favor oftheir father, &rturo Re"es, as evidenced b" the Contract to )ell, dated 5 )epte-ber 1B54, stipulating that< %

That a- one of the co'heirs of the /state of the deceased Constancia )occo and that I *m &o %er& assuch a portion of her lot consisting of =our ?undred )uare Meters 64$$7 -ore or less located on the 6sic73a-ora )t., Municipalit" of Dinalupihan, Province of 0ataan, bounded as follows<

A A A A

That for or in consideration of the su- of =/ P/)) 6P5.$$7 per suare -eter, hereb" sell, conve" andtransfer b" wa" of this 3o%'&o%*) $*)e the said 4$$ s.-. -ore or less unto &tt". &rturo C. Re"es, his heirs,ad-inistrator and assigns A A A. 6/-phasis supplied.7

Petitioners averred that the" tooE ph"sical possession of the subect propert" in 1B54 and had beenuninterrupted in their possession of the said propert" since then.

2egal fficer 0rigida Pinlac of the D&R 0ataan Provincial &grarian Refor- ffice conducted aninvestigation, the results of which were contained in her ReportF Reco--endation dated 15 &pril 1BBB.ther than recounting the afore'-entioned facts, 2egal fficer Pinlac also -ade the following findings inher ReportFReco--endation


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Respondent then appealed to the ffice of the D&R )ecretar". n an rder, dated B *ove-ber #$$1, theD&R )ecretar" reversed the Decision of D&R Regional Director &costa after finding that neither petitioners: predecessor'in'interest, &rturo Re"es, nor respondent was an actual occupant of the subect propert".?owever, since it was respondent who applied to purchase the subect propert", she was better ualified toown said propert" as opposed to petitioners, who did not at all appl" to purchase the sa-e. Petitioners werefurther disualified fro- purchasing the subect propert" because the" were not landless. =inall", during theinvestigation of 2egal fficer Pinlac, petitioners reuested that respondent pa" the- the cost of theconstruction of the sEeletal house the" built on the subect propert". This was construed b" the D&R

)ecretar" as a waiver b" petitioners of their right over the subect propert".1 n the said rder, the D&R)ecretar" ordered that<

HEREORE, pre-ises considered, the )epte-ber 15, 1BBB rder is hereb" )/T &)D/ and a newrder is hereb" issued &PPR*( the application to purchase 2ot G*o.H %'0 of /lena )occo'0eltran.14

Petitioners sought re-ed" fro- the ffice of the President b" appealing the B *ove-ber #$$1 Decision ofthe D&R )ecretar". Their appeal was docEeted as .P. Case *o. $#'&'$$. n $ !une #$$, the ffice ofthe President rendered its Decision den"ing petitioners: appeal and affir-ing the D&R )ecretar":sDecision.15 The fallo of the Decision reads<

HEREORE, pre-ises considered, udg-ent appealed fro- is !IRMED and the instantappeal DISMISSED.1%

Petitioners: Motion for Reconsideration was liEewise denied b" the ffice of the President in a Resolutiondated $ )epte-ber #$$4.1 n the said Resolution, the ffice of the President noted that petitioners failed toallege in their -otion the date when the" received the Decision dated $ !une #$$. )uch date was -aterialconsidering that the petitioners: Motion for Reconsideration was filed onl" on 14 &pril #$$4, or al-ost nine-onths after the pro-ulgation of the decision sought to be reconsidered. Thus, it ruled that petitioners:Motion for Reconsideration, filed be"ond fifteen da"s fro- receipt of the decision to be reconsidered,rendered the said decision final and eAecutor".

Conseuentl", petitioners filed an appeal before the Court of &ppeals, docEeted as C&'(.R. )P *o. +$%%.Pending the resolution of this case, the D&R alread" issued on + !ul" #$$5 a Certificate of 2and wnership&ward 6C2&7 over the subect propert" in favor of the respondent:s niece and representative, M"rna)occo'0eltran.1+ Respondent passed awa" on #1 March #$$1,1B but the records do not ascertain the identit"of her legal heirs and her legatees.

&cting on C&'(.R. )P *o. +$%%, the Court of &ppeals subseuentl" pro-ulgated its Decision, dated 1!anuar" #$$%, affir-ing the Decision dated $ !une #$$ of the ffice of the President. t held that

petitioners could not have been actual occupants of the subect propert", since actual occupanc" reuires the positive act of occup"ing and tilling the land, not ust the introduction of an unfinished sEeletal structurethereon. The Contract to )ell on which petitioners based their clai- over the subect propert" was eAecuted b" Miguel )occo, who was not the owner of the said propert" and, therefore, had no right to transfer thesa-e. &ccordingl", the Court of &ppeals affir-ed respondent:s right over the subect propert", which wasderived for- the original allocatees thereof.#$ The fallo of the said Decision reads<

HEREORE, pre-ises considered, the instant PETITION OR REVIE is DISMISSED.&ccordingl", the Decision dated $ !une #$$ and the Resolution dated $ Dece-ber #$$4 both issued b"the ffice of the President are hereb" !IRMED in toto.#1

The Court of &ppeals denied petitioners: Motion for Reconsideration of its Decision in a Resolution dated 1%&ugust #$$%.##

?ence, the present Petition, wherein petitioners raise the following issues<

8?/T?/R R *T T?/ ?*R&02/ C9RT = &PP/&2) /RR/D * &==RM*( T?/=*D*() = T?/ ==C/ = T?/ PR/)D/*T T?&T T?/ )90!/CT 2T ) &C&*T &*D T?&T

P/TT*/R) &R/ *T &CT9&2 CC9P&*T) T?/R/= 0I D/*I*( T?/ 2&TT/R:) C2&MT?&T T?/I ?&/ 0//* * P/*, C*T*99), /JC29)/, *TR9) &*D &D/R)/P))/))* T?/R/= )*C/ 1B54 R =R MR/ T?&* T?RTI 6$7 I/&R).

8?/T?/R R *T T?/ C9RT = &PP/&2) /RR/D 8?/* T ?/2D T?&T P/TT*/R)@C&**T 2/(&22I &CK9R/ T?/ )90!/CT PRP/RTI &) T?/I &R/ *T C*)D/R/D2&*D2/)) &) /D/*C/D 0I & T&J D/C2&R&T*.@

8?/T?/R R *T T?/ C9RT = &PP/&2) /RR/D * ?2D*( T?&T @L8?&T//RR/)/R&T* 8/ ?&/ /R T?/ R(?T = MIR*& )CC T )9CC//D 8&) &2R/&DI)/TT2/D 8?/* * 2/)) T?&* M(9/2 )CC 6PR/D/C/))R'* *T/R/)T = ?/R/*P/TT*/R)7 /J/C9T/D ?) 8&/R = R(?T D&T/D &PR2 1B, #$$5 /R T?/ )90!/CTPRP/RTI * =&R = MIR*& )CC.

8?/T?/R R *T T?/ C9RT = &PP/&2) /RR/D 8?/* T D/*/D P/TT*/R) MT*=R */8 TR&2 T?/R/0I 0R9)?*( &)D/ T?/ =&CT T?&T MIR*& . )CC'&R3(R))2I M)R/PR/)/*T/D * ?/R *=RM&T* )?//T = 0/*/=C&R/) &*D&PP2C&T* T P9RC?&)/ 2T * 2&*D/D /)T&T/) T?&T )?/ ) & =2P* CT3/*,8?/* * TR9T? &*D * =&CT, )?/ ) &2R/&DI &* &M/RC&* *&T*&2. #

The -ain issue in this case is whether or not petitioners have a better right to the subect propert" over therespondent. Petitioner:s clai- over the subect propert" is anchored on the Contract to )ell eAecuted betweenMiguel )occo and &rturo Re"es on 5 )epte-ber 1B54. Petitioners additionall" allege that the" and their predecessor'in'interest, &rturo Re"es, have been in possession of the subect lot since 1B54 for anuninterrupted period of -ore than 4$ "ears.

The Court is unconvinced.

Petitioners cannot derive title to the subect propert" b" virtue of the Contract to )ell. t was un-istaEabl"stated in the Contract and -ade clear to both parties thereto that the vendor, Miguel R. )occo, was not "etthe owner of the subect propert" and was -erel" eApecting to inherit the sa-e as his share as a co'heir ofConstancia:s estate.#4 t was also declared in the Contract itself that Miguel R. )occo:s conve"ance of thesubect to the bu"er, &rturo Re"es, was a conditional sale. t is, therefore, apparent that the sale of the subect propert" in favor of &rturo Re"es was conditioned upon the event that Miguel )occo would actuall" inheritand beco-e the owner of the said propert". &bsent such occurrence, Miguel R. )occo never acuiredownership of the subect propert" which he could validl" transfer to &rturo Re"es.

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9nder &rticle 145B of the Civil Code on contracts of sale, @The thing -ust be licit and the vendor -ust havea right to transfer ownership thereof at the ti-e it is delivered.@ The law specificall" reuires that the vendor-ust have ownership of the propert" at the ti-e it is delivered. Petitioners clai- that the propert" wasconstructivel" delivered to the- in 1B54 b" virtue of the Contract to )ell. ?owever, as alread" pointed out b" this Court, it was eAplicit in the Contract itself that, at the ti-e it was eAecuted, Miguel R. )occo was not"et the owner of the propert" and was onl" eApecting to inherit it. ?ence, there was no valid sale fro- whichownership of the subect propert" could have transferred fro- Miguel )occo to &rturo Re"es. 8ithoutacuiring ownership of the subect propert", &rturo Re"es also could not have conve"ed the sa-e to his

heirs, herein petitioners.

Petitioners, nevertheless, insist that the" ph"sicall" occupied the subect lot for -ore than $ "ears and, thus,the" gained ownership of the propert" through acuisitive prescription, citing Sandoval v. InsularGovernment #5 and San Miguel Corporation v. Court of Appeals. #%

n )andoval, petitioners therein sought the enforce-ent of )ection 54, paragraph % of &ct *o. B#%, otherwiseEnown as the 2and Registration &ct, which reuired '' for the issuance of a certificate of title to agricultural public lands '' the open, continuous, eAclusive, and notorious possession and occupation of the sa-e in goodfaith and under clai- of ownership for -ore than ten "ears. &fter evaluating the evidence presented,consisting of the testi-onies of several witnesses and proof that fences were constructed around the propert",the Court in the afore'stated case denied the petition on the ground that petitioners failed to prove that the"eAercised acts of ownership or were in open, continuous, and peaceful possession of the whole land, and hadcaused it to be enclosed to the eAclusion of other persons. t further decreed that whoever clai-s such possession shall eAercise acts of do-inion and ownership which cannot be -istaEen for the -o-entar" andaccidental eno"-ent of the propert". #

n San Miguel Corporation, the Court reiterated the rule that the open, eAclusive, and undisputed possessionof alienable public land for the period prescribed b" law creates the legal fiction whereb" land ceases to be public land and is, therefore, private propert". t stressed, however, that the occupation of the land for $"ears -ust be conclusively established. Thus, the evidence offered b" petitioner therein ; taA declarations,receipts, and the sole testi-on" of the applicant for registration, petitioner:s predecessor'in'interest whoclai-ed to have occupied the land before selling it to the petitioner ; were considered insufficient to satisf"the uantu- of proof reuired to establish the clai- of possession reuired for acuiring alienable publicland.#+

&s in the two aforecited cases, petitioners herein were unable to prove actual possession of the subect propert" for the period reuired b" law. t was underscored in San Miguel Corporation that the open,continuous, eAclusive, and notorious occupation of propert" for -ore than $ "ears -ust be no lessthan 3o%3)$ve, such uantu- of proof being necessar" to avoid the erroneous validation of actual fictitiousclai-s of possession over the propert" that is being clai-ed.#B

n the present case, the evidence presented b" the petitioners falls short of being conclusive. &part fro- their self'serving state-ent that the" tooE possession of the subect propert", the onl" proof offered to supporttheir clai- was a general state-ent -ade in the letter $ dated 4 =ebruar" #$$# of Barangay Captain Carlos(apero, certif"ing that &rturo Re"es was the occupant of the subect propert" @since peace ti-e and at present.@ The state-ent is rendered doubtful b" the fact that as earl" as 1BB, when respondent filed her petition for issuance of title before the D&R, &rturo Re"es had alread" died and was alread" represented b"his heirs, petitioners herein.

Moreover, the certification given b" Barangay Captain (apero that &rturo Re"es occupied the pre-ises foran unspecified period of ti-e, i.e., since peace ti-e until the present, cannot prevail over 2egal fficerPinlac:s -ore particular findings in her ReportFReco--endation. 2egal fficer Pinlac reported that petitioners ad-itted that it was onl" in the 1B$s that the" built the sEeletal structure found on the subect propert". )he also referred to the aver-ents -ade b" Patricia ?ipolito in an &ffidavit,1 dated #% =ebruar"

1BBB, that the structure was left unfinished because respondent prevented petitioners fro- occup"ing thesubect propert". )uch findings disprove petitioners: clai-s that their predecessor'in'interest, &rturo Re"es,had been in open, eAclusive, and continuous possession of the propert" since 1B54. The adverted findingswere the result of 2egal fficer Pinlac:s investigation in the course of her official duties, of -atters withinher eApertise which were later affir-ed b" the D&R )ecretar", the ffice of the President, and the Court of&ppeals. The factual findings of such ad-inistrative officer, if supported b" evidence, are entitled to greatrespect.#

n contrast, respondent:s clai- over the subect propert" is bacEed b" sufficient evidence. ?er predecessors'in'interest, the spouses 2auian, have been identified as the original allocatees who have full" paid for thesubect propert". The subect propert" was allocated to respondent in the eAtraudicial settle-ent b" the heirsof Constancia:s estate. The docu-ent entitled @/Atra'udicial )ettle-ent of the /state of the DeceasedConstancia )occo@ was not notari>ed and, as a private docu-ent, can onl" bind the parties thereto. ?owever,its authenticit" was never put into uestion, nor was its legalit" i-pugned. Moreover, eAecuted in 1B%5 b"the heirs of Constancia )occo, or -ore than $ "ears ago, it is an ancient docu-ent which appears to begenuine on its face and therefore its authenticit" -ust be upheld. Respondent has continuousl" paid for therealt" taA due on the subect propert", a fact which, though not conclusive, served to strengthen her clai-over the propert".4

=ro- the foregoing, it is onl" proper that respondent:s clai- over the subect propert" be upheld. This Court-ust, however, note that the rder of the D&R )ecretar", dated B *ove-ber #$$1, which granted the petitioner:s right to purchase the propert", is flawed and -a" be assailed in the proper proceedings. Recordsshow that the D&R affir-ed that respondent:s predecessors'in'interest, Marcelo 2auian and Constancia)occo, having been identified as the original allocatee, have full" paid for the subect propert" as providedunder an agree-ent to sell. 0" the nature of a contract or agree-ent to sell, the title over the subect propert"is transferred to the vendee upon the full pa"-ent of the stipulated consideration. 9pon the full pa"-ent ofthe purchase price, and absent an" showing that the allocatee violated the conditions of the agree-ent,ownership of the subect land should be conferred upon the allocatee.5 )ince the eAtraudicial partitiontransferring Constancia )occo:s interest in the subect land to the respondent is valid, there is clearl" no needfor the respondent to purchase the subect propert", despite the application for the purchase of the propert"erroneousl" filed b" respondent. The onl" act which re-ains to be perfor-ed is the issuance of a title in thena-e of her legal heirs, now that she is deceased.

Moreover, the Court notes that the records have not clearl" established the right of respondent:srepresentative, M"rna )occo'&ri>o, over the subect propert". Thus, it is not clear to this Court wh" the D&R issued on + !ul" #$$5 a C2&% over the subect propert" in favor of M"rna )occo'&ri>o. Respondent:sdeath does not auto-aticall" trans-it her rights to the propert" to M"rna )occo'0eltran. Respondent onl"authori>ed M"rna )occo'&ri>o, through a )pecial Power of &ttorne"dated 1$ March 1BBB, to represent herin the present case and to ad-inister the subect propert" for her benefit. There is nothing in the )pecialPower of &ttorne" to the effect that M"rna )occo'&ri>o can taEe over the subect propert" as owner thereof

upon respondent:s death. That Miguel . )occo, respondent:s onl" nephew, the son of the late Miguel R.)occo, and M"rna )occo'&ri>o:s brother, eAecuted a waiver of his right to inherit fro- respondent, does notauto-aticall" -ean that the subect propert" will go to M"rna )occo'&ri>o, absent an" proof that there is noother ualified heir to respondent:s estate. Thus, this Decision does not in an" wa" confir- the issuance ofthe C2& in favor of M"rna )occo'&ri>o, which -a" be assailed in appropriate proceedings.

IN VIE O THE OREGOING, the instant Petition is DENIED. The assailed Decision of the Court of&ppeals in C&'(.R. )P *o. +$%%, pro-ulgated on 1 !anuar" #$$%,is !IRMED withMODIIC!TION . This Court withholds the confir-ation of the validit" of title overthe subect propert" in the na-e of M"rna )occo'&ri>o pending deter-ination of respondent:s legal heirs inappropriate proceedings. *o costs.

SO ORDERED.

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Manila

T?RD D)*

G.R. No. 15578 ebr*r( 18, 200

ROGE-I! D!C-!G *%' !DE-INO D!C-!G 'e3e*$e', $b$&&&e' b( RODE- M. D!C-!G, *%'

!DRI!N M. D!C-!G, Petitioners,vs.E-INO M!C!HI-IG, !DE-! M!C!HI-IG, CONR!DO M!C!HI-IG, -OREN/! H!+ER *%'

+ENIT! DE- ROS!RIO, Respondents.

R / ) 2 9 T *

!USTRI!M!RTINE/, J.:

0efore us is petitioners Motion for Reconsideration of our Decision dated !ul" #+, #$$+ where we affir-edthe Decision dated ctober 1, #$$1 and the Resolution dated &ugust , #$$ of the Court of &ppeals 6C&7in C&'(.R. C *o. 4+4B+.

Records show that while the land was registered in the na-e of petitioner Rogelia in 1B+4, respondents:co-plaint for reconve"ance was filed in 1BB1, which was within the 1$'"ear prescriptive period.

8e ruled that since petitioners bought the propert" when it was still an unregistered land, the defense ofhaving purchased the propert" in good faith is unavailing. 8e affir-ed the Regional Trial Court 6RTC7 infinding that petitioners should pa" respondents their corresponding share in the produce of the subect landfro- the ti-e the" were deprived thereof until the possession is restored to the-.

n their Motion for Reconsideration, petitioners contend that the 1$'"ear period for reconve"ance isapplicable if the action is based on an i-plied or a constructive trust that since respondents action forreconve"ance was based on fraud, the action -ust be filed within four "ears fro- the discover" of the fraud,citing Gerona v. De Guzman,1 which was reiterated in Balbin v. Medalla.#

8e do not agree.

n Caro v. Court of Appeals, we have eAplicitl" held that @&e #re$3r#&ve #ero' 9or &e re3o%ve(*%3e o99r*')e%&)( re:$&ere' re*) #ro#er&( $ 10 (e*r$ re3;o%e' 9rom &e '*&e o9 &e $$*%3e o9 &e

3er&93*&e o9 &&)e A A A.@4

?owever, notwithstanding petitioners un-eritorious argu-ent, the Court dee-s it necessar" to -aEe certainclarifications. 8e have earlier ruled that respondents action for reconve"ance had not prescribed, since itwas filed within the 1$'"ear prescriptive period. o!ever, a revie! of t"e factual antecedents of t"e case s"o!s t"at respondents# action for reconveyance !as not even sub$ect to prescription. The deed of saleeAecuted b" MaAi-a in favor of petitioners was null and void, since MaAi-a was not the owner of the landshe sold to petitioners, and the one'half northern portion of such land was owned b" respondents. 0eing anabsolute nullit", the deed is subect to attacE an"ti-e, in accordance with &rticle 141$ of the Civil Code thatan action to declare the ineAistence of a void contract does not prescribe. 2iEewise, we have consistentl"

ruled that when there is a showing of such illegalit", the propert" registered is dee-ed to be si-pl" held intrust for the real owner b" the person in whose na-e it is registered, and the for-er then has the right to suefor the reconve"ance of the propert".5 &n action for reconve"ance based on a void contract isi-prescriptible.% &s long as the land wrongfull" registered under the Torrens s"ste- is still in the na-e ofthe person who caused such registration, an action in persona- will lie to co-pel hi- to reconve" the propert" to the real owner . n this case, title to the propert" is in the na-e of petitioner Rogelia thus, thetrial court correctl" ordered the reconve"ance of the subect land to respondents.

Petitioners neAt contend that the" are possessors in good faith, thus, the award of da-ages should not have been i-posed. The" further contend that under &rticle 544, a possessor in good faith is entitled to the fruitsreceived before the possession is legall" interrupted thus, if indeed petitioners are ointl" and severall"liable to respondents for the produce of the subect land, the liabilit" should be recEoned onl" for 1BB1 andnot 1B+4.

8e find partial -erit in this argu-ent.

&rticle 5#+ of the Civil Code provides that possession acuired in good faith does not lose this character,eAcept in a case and fro- the -o-ent facts eAist which show that the possessor is not unaware that he possesses the thing i-properl" or wrongfull". Possession in good faith ceases fro- the -o-ent defects inthe title are -ade Enown to the possessors, b" eAtraneous evidence or b" suit for recover" of the propert" b"the true owner. 8hatever -a" be the cause or the fact fro- which it can be deduced that the possessor hasEnowledge of the defects of his title or -ode of acuisition, it -ust be considered sufficient to show badfaith.+ )uch interruption taEes place upon service of su--ons.Bla!p"il.net

&rticle 544 of the sa-e Code provides that a possessor in good faith is entitled to the fruits onl" so long ashis possession is not legall" interrupted. Records show that petitioners received a su--ons together withrespondents co-plaint on &ugust 5, 1BB11$ thus, petitioners good faith ceased on the da" the" received thesu--ons. Conseuentl", petitioners should pa" respondents 1$ cavans of palay per annu- beginning&ugust 5, 1BB1 instead of 1B+4.

=inall", petitioner would liEe this Court to looE into the finding of the RTC that @since MaAi-a died inctober 1BB, whatever charges and clai-s petitioners -a" recover fro- her eApired with her@ and that the proper person to be held liable for da-ages to be awarded to respondents should be MaAi-a Divison or herestate, since she -isrepresented herself to be the true owner of the subect land.

8e are not persuaded.

*otabl", petitioners never raised this issue in their appellants brief or in their -otion for reconsiderationfiled before the C&. n fact, the" never raised this -atter before us when the" filed their petition for review.Thus, petitioners cannot raise the sa-e in this -otion for reconsideration without offending the basic rules of fair pla", ustice and due process, speciall" since MaAi-a was not substituted at all b" her heirs after the pro-ulgation of the RTC Decision.

HEREORE, petitioners: Motion for Reconsideration is P!RT-" GR!NTED. The Decision of theCourt of &ppeals dated !ul" #+, #$$+ is MODIIED onl" with respect to prescription as discussed in theteAt of herein Resolution, and the dispositive portion of the Decision is MODIIED to the effect that petitioners are ordered to pa" respondents 1$ cavans of palay per annu- beginning &ugust 5, 1BB1 insteadof 1B+4.

SO ORDERED.

4

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SECOND DIVISION

!.C. No. ed b" *otar" Public /ras-o (. Da-asing as Doc. *o. %+, Page *o. 1%,0ooE *o. , )eries of 1B1, which appears to have been signed b" co-plainant Regalado Daro", thereb"conve"ing the said propert" in favor of a certain !ose (anga", -arried to &nita 0as-a"or, b" virtue ofwhich TCT *o. T'15B#5 was issued in the na-e of !ose (anga".

Two weeEs thereafter, under date of &pril 1, 1B1, the said !ose (anga" eAecuted a Deed of )ale of thesa-e propert" in favor of Mrs. *ena &becia, the wife of the respondent, b" virtue of which TCT *o. T'15B#% was issued in the na-e of *ena &becia, -arried to &tt". /steban &becia, the respondent.

)o-eti-e in the "ear 1B+4, the co-plainant discovered that his said propert" was alread" in the na-e ofMrs. *ena &becia and &tt". /steban &becia.

5

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. . . .

The foregoing evidence sufficientl" proved respondents acts co-plained of in the present case . . . . Thesignificant fact is that the herein respondent was instru-ental and responsible for falsif"ing the signature ofhis client, co-plainant Daro", in the deed of conve"ance in favor of !ose (anga", for which he is at presentcri-inall" charged in Cri-inal Case *o. ++'44 before the Regional Trial Court of Misa-is riental.

n an unclear -anner, respondent tried to ustif" his act b" alleging that the transfer of his clients propert" tohis wife was proper because he allegedl" was not paid for his professional services. )uch allegation, even iftrue, would not eAculpate hi- fro- liabilit". & law"er who eAecuted with his client a deed transferringownership over a parcel of land involved in a pending litigation as his attorne"s fees violates the rule prohibiting the purchase of propert" in litigation b" a law"er fro- his client.

. . . 8hat is saddening is the fact that he is presentl" an incu-bent labor arbiter of the *ational 2aborRelations Co--ission with the delicate responsibilit" of ad-inistering ustice to the parties before hi-. . . .The Co--ission has no alternative but to reco--end his disbar-ent. t is liEewise reco--ended that the *ational 2abor Relations Co--ission be furnished with these findings for its guidance and appropriateaction.

The 0oard of (overnors of the ntegrated 0ar of the Philippines in Resolution *o. J'B4'$#, dated March#% 1BB4,1# approved the report but reduced the penalt" to indefinite suspension.

Respondent &becia filed a Motion for Reconsideration andFor &ppeal. &-ong other things, he contendsthat


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t appears further that as a conseuence of the de-olition of the for-er owners house, co-plainant and Mrs.&becia were charged, together with Deput" )heriff /ufrosino P. Castillo, with grave coercionF-alicious-ischief in the ffice of the Provincial =iscal of Misa-is riental. n his resolution, dated &pril 1+, 1B4,dis-issing the charges, &ssistant Provincial =iscal &leo (. Rola stated, a-ong otherthings


8/32

witness to the eAecution of the deed of sale and that she saw Daro" signing the deed ofsale.#$crNlNwvirtualibrNr"

Daro" never denied these clai-s of the notar" public and a witness to the eAecution of the deed of sale. *orwas the *0 writing eApert ever called to testif" on his finding that the signature of Daro" in the deed of saleappeared to have been signed b" a different hand. The finding that the deed of sale was forged was si-pl"i-plied fro- the report of the *0 writing eApert. &s co-plainant, Daro" had the burden of proving that

contrar" to the recital in the urat he and his wife never appeared before the notar" public and acEnowledgedthe deed to be their voluntar" act.

HEREORE, the resolution dated March #%, 1BB4, of the 0P 0oard of (overnors is R/C*)D/R/Dand the co-plaint against respondent /steban &becia is D)M))/D.

SO ORDERED.


Manila

T?RD D)*

8

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G.R. No. -688


10/32

-" heirs and &ttorne" Murillo, in proportion to our rights and interest thereunder that is fort" per cent shall be for the account of &tt". Murillo and siAt" per cent shall be for -" account or -" heirs.

* 8T*/)) ?/R/=, hereb" set unto -" signature below this ##nd da" of &ugust 1B%4 at TaclobanCit".

6)gd.7 =2R/*C =&022

6)gd.7 !)/=& T. =&0228T? MI C*=RMTI<

6)gd.7 &2=R/D M. M9R22

6)gd.7 RM&* T. =&02268itness7

6)gd.7 CR)T/T& =. M&(2*T/68itness7 4

Pursuant to said contract, Murillo filed for =lorencio =abillo Civil Case *o. 5# against (regorio D. 0riosoto recover the )an )alvador propert". The case was ter-inated on ctober #B, 1B%4 when the court, upon the parties oint -otion in the nature of a co-pro-ise agree-ent, declared =lorencio =abillo as the lawfulowner not onl" of the )an )alvador propert" but also the Pugahana" parcel of land.

Conseuentl", Murillo proceeded to i-ple-ent the contract of services between hi- and =lorencio =abillo b" taEing possession and eAercising rights of ownership over 4$ of said properties. ?e installed a tenant inthe Pugahana" propert".

)o-eti-e in 1B%%, =lorencio =abillo clai-ed eAclusive right over the two properties and refused to giveMurillo his share of their produce. 5 nas-uch as his de-ands for his share of the produce of the Pugahana" propert" were unheeded, Murillo filed on March #, 1B$ in the then Court of =irst nstance of 2e"te aco-plaint captioned @ownership of a parcel of land, da-ages and appoint-ent of a receiver@ against=lorencio =abillo, his wife !osefa Taa, and their children Ra-on 6 sic7 =abillo and Cristeta =. Maglinte. %

Murillo pra"ed that he be declared the lawful owner of fort" per cent of the two properties that defendants be directed to pa" hi- ointl" and severall" PB$$.$$ per annum fro- 1B%% until he would be given his shareof the produce of the land plus P5,$$$ as conseuential da-ages and P1,$$$ as attorne"s fees, and thatdefendants be ordered to pa" -oral and eAe-plar" da-ages in such a-ounts as the court -ight dee- ustand reasonable.

n their answer, the defendants stated that the consent to the contract of services of the =abillo spouses wasvitiated b" old age and ail-ent that Murillo -isled the- into believing that )pecial Proceedings *o. +4 onthe probate of !ustinas will was alread" ter-inated when actuall" it was still pending resolution and that thecontingent fee of 4$ of the value of the )an )alvador propert" was eAcessive, unfair and unconscionableconsidering the nature of the case, the length of ti-e spent for it, the efforts eAerted b" Murillo, and his professional standing.

The" pra"ed that the contract of services be declared null and void that Murillos fee be fiAed at 1$ of theassessed value of P,+$ of the )an )alvador propert" that Murillo be ordered to account for the P1,$$$rental of the )an )alvador propert" which he withdrew fro- the court and for the produce of the Pugahana" propert" fro- 1B%5 to 1B%% that Murillo be ordered to vacate the portion of the )an )alvador propert"which he had occupied that the Pugahana" propert" which was not the subect of either )pecial Proceedings *o. +4 or Civil Case *o. 5# be declared as the eAclusive propert" of =lorencio =abillo, and that Murillo

be ordered to pa" -oral da-ages and the total a-ount of P1,$$$ representing eApenses of litigation andattorne"s fees.

n its decision of Dece-ber #, 1B5, the lower court ruled that there was insufficient evidence to prove thatthe =abillo spouses consent to the contract was vitiated. t noted that the contract was witnessed b" two oftheir children who appeared to be highl" educated. The spouses the-selves were old but literate and ph"sicall" fit.

n clai-ing urisdiction over the case, the lower court ruled that the co-plaint being one @to recover real propert" fro- the defendant spouses and their heirs or to enforce a lien thereon,@ the case could be decidedindependent of the probate proceedings. Ruling that the contract of services did not violate &rticle 14B1 ofthe Civil Code as said contract stipulated a contingent fee, the court upheld Murillos clai- for @contingentattorne"s fees of 4$ of the value of recoverable properties.@ ?owever, the court declared Murillo to be thelawful owner of 4$ of both the )an )alvador and Pugahana" properties and the i-prove-ents thereon. tdirected the defendants to pa" ointl" and severall" to Murillo the a-ount of P1,#$$ representing 4$ of thenet produce of the Pugahana" propert" fro- 1B% to 1B entitled Murillo to 4$ of the 1B4 and 1B5inco-e of the Pugahana" propert" which was on deposit with a banE, and ordered defendants to pa" thecosts of the suit.

0oth parties filed -otions for the reconsideration of said decision< =abillo, insofar as the lower courtawarded 4$ of the properties to Murillo and the latter insofar as it granted onl" P1,#$$ for the produce ofthe properties fro- 1B% to 1B. n !anuar" #B, 1B%, the lower court resolved the -otions and -odifiedits decision thus<

&CCRD*(2I, the udg-ent heretofore rendered is -odified to read as follows<

6a7 Declaring the plaintiff as entitled to and the true and lawful owner of fort" percent 64$7 of the parcelsof land and i-prove-ents thereon covered b" TaA Declaration *os. 1B5 and %##B described in Paragraph5 of the co-plaint

6b7 Directing all the defendants to pa" ointl" and severall" to the plaintiff the su- of Two Thousand =our?undred =ift" Pesos 6P#,45$.$$7 representing 4$ of the net produce of the Pugahana" propert" fro- 1B%to 1B

6c7 Declaring the plaintiff entitled to 4$ of the 1B4 and 1B5 inco-e of said riceland now on deposit withthe Prudential 0anE, Tacloban Cit", deposited b" Mr. Pedro /lona, designated receiver of the propert"

6d7 rdering the defendants to pa" the plaintiff the su- of Three ?undred Pesos 6P $$.$$7 as attorne"sfees and

6e7 rdering the defendants to pa" the costs of this suit.

) RD/R/D.

n view of the death of both =lorencio and !ustina =abillo during the pendenc" of the case in the lower court,their children, who substituted the- as parties to the case, appealed the decision of the lower court to thethen nter-ediate &ppellate Court. n March #, 1B+4, said appellate court affir-ed in toto the decision ofthe lower court. +

10

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11/32

The instant petition for review on certiorari which was interposed b" the =abillo children, was filed shortl"after Murillo hi-self died. ?is heirs liEewise substituted hi- in this case. The =abillos herein uestion theappellate courts interpretation of the contract of services and contend that it is in violation of &rticle 14B1 of the Civil Code.

The contract of services did not violate said provision of law. &rticle 14B1 of the Civil Code, specificall" paragraph 5 thereof, prohibits law"ers fro- acuiring b" purchase even at a public or udicial auction,

properties and rights which are the obects of litigation in which the" -a" taEe part b" virtue of their profession. The said prohibition, however, applies onl" if the sale or assign-ent of the propert" taEes placeduring the pendenc" of the litigation involving the clients propert". B

?ence, a contract between a law"er and his client stipulating a contingent fee is not covered b" said prohibition under &rticle 14B1 657 of the Civil Code because the pa"-ent of said fee is not -ade during the pendenc" of the litigation but onl" after udg-ent has been rendered in the case handled b" the law"er. nfact, under the 1B++ Code of Professional Responsibilit", a law"er -a" have a lien over funds and propert"of his client and -a" appl" so -uch thereof as -a" be necessar" to satisf" his lawful fees anddisburse-ents. 1$

&s long as the law"er does not eAert undue influence on his client, that no fraud is co--itted or i-positionapplied, or that the co-pensation is clearl" not eAcessive as to a-ount to eAtortion, a contract for contingentfee is valid and enforceable. 11 Moreover, contingent fees were i-pliedl" sanctioned b" *o. 1 of the Canonsof Professional /thics which governed law"er'client relationships when the contract of services was enteredinto between the =abillo spouses and Murillo. 1#

?owever, we disagree with the courts below that the contingent fee stipulated between the =abillo spousesand Murillo is fort" percent of the properties subect of the litigation for which Murillo appeared for the=abillos. & careful scrutin" of the contract shows that the parties intended fort" percent of the value of the properties as Murillos contingent fee. This is borne out b" the stipulation that @in case of success of an" or both cases,@ Murillo shall be paid 6t"e sum euivalent to forty per centum of !"atever benefit6 =abillo wouldderive fro- favorable udg-ents. The sa-e stipulation was earlier e-bodied b" Murillo in his letter of&ugust B, 1B%4 aforeuoted.

8orth noting are the provisions of the contract which clearl" states that in case the properties are sold,-ortgaged, or leased, Murillo shall be entitled respectivel" to 4$ of the @purchase price,@ @proceeds of the-ortgage,@ or @rentals.@ The contract is vague, however, with respect to a situation wherein the properties areneither sold, -ortgaged or leased because Murillo is allowed @to have the option of occup"ing or leasing toan" interested part" fort" per cent of the house and lot.@ ?ad the parties intended that Murillo should beco-ethe lawful owner of 4$ of the properties, it would have been clearl" and uneuivocall" stipulated in thecontract considering that the =abillos would part with actual portions of their properties and cede the sa-e to

Murillo.

The a-biguit" of said provision, however, should be resolved against Murillo as it was he hi-self whodrafted the contract. 1 This is in consonance with the rule of interpretation that, in construing a contract of professional services between a law"er and his client, such construction as would be -ore favorable to theclient should be adopted even if it would worE preudice to the law"er. 14 Rightl" so because of the ineualit"in situation between an attorne" who Enows the technicalities of the law on the one hand and a client whousuall" is ignorant of the vagaries of the law on the other hand. 15

Considering the nature of the case, the value of the properties subect -atter thereof, the length of ti-e andeffort eAerted on it b" Murillo, we hold that Murillo is entitled to the a-ount of Three Thousand Pesos6P,$$$.$$7 as reasonable attorne"s fees for services rendered in the case which ended on a co-pro-iseagree-ent. n so ruling, we uphold @the ti-e'honored legal -aAi- that a law"er shall at all ti-es uphold the

integrit" and dignit" of the legal profession so that his basic ideal beco-es one of rendering service andsecuring ustice, not -one"'-aEing. =or the worst scenario that can ever happen to a client is to lose thelitigated propert" to his law"er in who- all trust and confidence were bestowed at the ver" inception of thelegal controvers".@ 1%

8?/R/=R/, the decision of the then nter-ediate &ppellate Court is hereb" reversed and set aside and anew one entered 6a7 ordering the petitioners to pa" &tt". &lfredo M. Murillo or his heirs the a-ount of

P,$$$.$$ as his contingent fee with legal interest fro- ctober #B, 1B%4 when Civil Case *o. 5# waster-inated until the a-ount is full" paid less an" and all a-ounts which Murillo -ight have received out ofthe produce or rentals of the Pugahana" and )an )alvador properties, and 6b7 ordering the receiver of said properties to render a co-plete report and accounting of his receivership to the court below within fifteen6157 da"s fro- the finalit" of this decision. Costs against the private respondent.

) RD/R/D.

Gutierrez, 7r., &eliciano, Bidin and Davide, 7r., 77., concur.

/* 0&*C

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12/32

!.M. No$. 1


13/32

n consultation, &tt"., &ntiniw advised the- to eAecute a deed of sale. &tt". &ntiniw allegedl" prepared andnotari>ed the deed of sale in the na-e of her grandfather 6deceased at the ti-e of signing7 with hergrand-others approval.chanroblesvirtualawlibrar"chanrobles virtual law librar"

=elicidad 0ernal'Du>on, her aunt who had a clai- over the propert" filed a co-plaint against her 62"dia0ernal7 and her counsel, &tt". &ntiniw for falsification of a public docu-ent. 6Co-plaint, pp. 1'#7 The fiscaleAonerated the counsel for lacE of evidence, while a case was filed in court against 2"dia

0ernal.chanroblesvirtualawlibrar"chanrobles virtual law librar"

n ctober , 1B5, 2"dia 0ernal filed a disbar-ent proceeding 6docEeted as &d-inistrative Case *o.1547against &tt". &ntiniw for illegal acts and bad advice.chanroblesvirtualawlibrar"chanrobles virtual law librar"

Pursuant to the resolution of the =irst Division of this Court dated Dece-ber B, 1B4, the resolution of the)econd Division dated March , 1B5 and the two resolutions of the )econd Division both dated Dece-ber, 1B5, &d-inistrative Cases *os. 1$#, 1B1 and 154 were referred to the ffice of the )olicitor (eneralfor investigation, report and reco--endation.chanroblesvirtualawlibrar"chanrobles virtual law librar"

9pon for-al reuest of Constancia 2. alencia and 2"dia 0ernal dated March , 1B%, all of these caseswere ordered consolidated b" )olicitor (eneral /stelito P. Mendo>a per his handwritten directive of MarchB, 1B%.chanroblesvirtualawlibrar"chanrobles virtual law librar"

n &pril 1#, 1B++, 8e referred the investigation of these cases to the ntegrated 0ar of the Philippines.8hen &tt". !ovellanos was appointed as Municipal Circuit Trial Court !udge of &lcala'0autista, Pangasinan,8e referred the investigation of these cases to &cting Presiding !udge Cesar Mindaro, Regional Trial Court,0ranch 5$, illasis, Pangasinan, for further investigation.chanroblesvirtualawlibrar"chanrobles virtual lawlibrar"

n view of the seriousness of the charge against the respondents and the alleged threats against the person ofco-plainant Constancia 2. alencia, 8e directed the transfer of investigation to the Regional Trial Court ofManila.chanroblesvirtualawlibrar"chanrobles virtual law librar"

The three ad-inistrative cases were raffled to 0ranch J of the Regional Trial Court of Manila, under thesala of !udge Catalino Castaneda, !r.chanroblesvirtualawlibrar"chanrobles virtual law librar"

&fter investigation, !udge Catalino Castaeda, !r., reco--ended the dis-issal of cases against &tt".!ovellanos and &tt". &rsenio =er. Cabanting dis-issal of &d-inistrative Case *o. 154 and the additionalcharges in &d-inistrative Case *o. 1B1 against &ntiniw and !udge !ovellanos however, he reco--endedthe suspension of &tt". &ntiniw fro- the practice of law for siA -onths finding hi- guilt" of -alpractice infalsif"ing the @Co-praventa Definitiva.@chanrobles virtual law librar"

The si-plified issues of these consolidated cases are<

. 8hether or not &tt". Cabanting purchased the subect propert" in violation of &rt. 14B1 of the *ew CivilCode.chanroblesvirtualawlibrar"chanrobles virtual law librar"

. 8hether or not &tt"s. &ntiniw and !ovellanos are guilt" of -alpractice in falsif"ing notarialdocu-ents.chanroblesvirtualawlibrar"chanrobles virtual law librar"

. 8hether or not the three law"ers connived in rigging Civil Case *o. '#1$.

9nder &rticle 14B1 of the *ew Civil Code<

The following persons cannot acuire b" purchase, even at a public of udicial auction, either in person orthrough the -ediation of another<

AAA AAA AAAchanrobles virtual law librar"

657 . . . this prohibition includes the act of acuiring b" assign-ent and shall appl" to law"ers, with respect tothe propert" and rights which -a" be the obect of an" litigation in which the" -aEe taEe part b" virtue oftheir profession.

Public polic" prohibits the transactions in view of the fiduciar" relationship involved. t is intended to curtailan" undue influence of the law"er upon his client. (reed -a" get the better of the senti-ents of lo"alt" anddisinterestedness. &n" violation of this prohibition would constitute -alpractice 6n re< &ttorne" MelchorRuste, 4$ .(. p. +7 and is a ground for suspension. 60eltran vs. =ernande>, $ Phil.#4+7.chanroblesvirtualawlibrar"chanrobles virtual law librar"

&rt. 14B1, prohibiting the sale to the counsel concerned, applies onl" while the litigation is pending.6Director of 2ands vs. &daba, ++ )CR& 51 ?ernande> vs. illanueva, 4$ Phil.

57.chanroblesvirtualawlibrar"chanrobles virtual law librar"

n the case at bar, while it is true that &tt". &rsenio =er. Cabanting purchased the lot after finality of $udgment ,there was still a pending certiorari proceeding. & thing is said to be in litigation not onl" if there is so-econtest or litigation over it in court, but also fro- the -o-ent that it beco-es subect to the udicial action of the udge. 6(an Tingco vs. Pabinguit, 5 Phil. +17. 2ogic indicates, in certiorari proceedings, that theappellate court -a" either grant or dis-iss the petition. ?ence, it is not safe to conclude, for purposes under&rt. 14B1 that the litigation has ter-inated when the udg-ent of the trial court beco-e final whilea certiorari connected therewith is still in progress. Thus, purchase of the propert" b" &tt". Cabanting in thiscase constitutes -alpractice in violation of &rt. 14B1 and the Canons of Professional /thics. Clearl", this-alpractice is a ground for suspension.chanroblesvirtualawlibrar"chanrobles virtual law librar"

The sale in favor of &tt". !ovellanos does not constitute -alpractice. There was no attorne"'clientrelationship between )erapia and &tt". !ovellanos, considering that the latter did not taEe part as counsel inCivil Case *o. '#1$. The transaction is not covered b" &rt. 14B1 nor b" the Canons adverted to.

t is asserted b" Paulino that &tt". &ntiniw asEed for and received the su- of P#$$.$$ in consideration of hiseAecuting the docu-ent @Co-praventa Definitiva@ which would show that Paulino bought the propert". Thischarge, &tt". &ntiniw si-pl" denied. t is settled urisprudence that affir-ative testi-on" is given greaterweight than negative testi-on" 60a"asen vs. C&, 2'#5+5, =eb. #%, 1B+1 da. de Ra-os vs. C&, et al.,24$+$4, !an. 1, 1B+7. 8hen an individuals integrit" is challenged b" evidence, it is not enough that heden" the charges against hi- he -ust -eet the issue and overco-e the evidence for the relator and show proofs that he still -aintains the highest degree of -oralit" and integrit" which at all ti-e is eApected ofhi-. 6De los Re"es vs. &>nar, &d-. Case *o. 14, *ov. #+, 1B+B7.chanroblesvirtualawlibrar"chanroblesvirtual law librar"

13


14/32

&lthough Paulino was a co--on far-er who finished onl" (rade , his testi-on", even if not corroborated b" another witness, deserves credence and can be relied upon. ?is declaration dwelt on a subect which wasso delicate and confidential that it would be difficult to believe the he fabricated hisevidence.chanroblesvirtualawlibrar"chanrobles virtual law librar"

There is a clear preponderant evidence that &tt". &ntiniw co--itted falsification of a deed of sale, and itssubseuent introduction in court preudices his pri-e dut" in the ad-inistration of ustice as an officer of the

court.chanroblesvirtualawlibrar"chanrobles virtual law librar"

& law"er owes entire devotion to the interest of his client 6)antos vs. Dichoso, +4 )CR& %##7, but not at theeApense of truth. 6Cos-os =oundr" )hopworEers 9nion vs. 2a 0u, % )CR& 17. The first dut" of a law"er is not to his client but to the ad-inistration of ustice. 62ubiano vs. (ordalla, 115 )CR& 45B7 To that end, hisclients success is wholl" subordinate. ?is conduct ought to and -ust alwa"s be scrupulousl" observant oflaw and ethics. 8hile a law"er -ust advocate his clients cause in ut-ost earnestness and with the -aAi-u-sEill he can -arshal, he is not at libert" to resort to illegal -eans for his clients interest. t is the dut" of anattorne" to e-plo", for the purpose of -aintaining the causes confided to hi-, such -eans as are consistentwith truth and honor. 6Pangan vs. Ra-os, B )CR& +7.chanroblesvirtualawlibrar"chanrobles virtual lawlibrar"

Me-bership in the 0ar is a privilege burdened with conditions. 0" far, the -ost i-portant of the- is-indfulness that a law"er is an officer of the court. 6n re< van T. Publico, 1$# )CR& ##7. This Court -a"suspend or disbar a law"er whose acts show his unfitness to continue as a -e-ber of the 0ar. 6?alili vs.CR, 1% )CR& 11#7. Disbar-ent, therefore, is not -eant as a punish-ent depriving hi- of a source of

livelihood but is rather intended to protect the ad-inistration of ustice b" reuiring that those who eAercisethis function should be co-petent, honorable and reliable in order that courts and the public -a" rightl"repose confidence in the-. 6*oriega vs. )ison, 1#5 )CR& #B7. &tt". &ntiniw failed to live up to the highstandards of the law profession.chanroblesvirtualawlibrar"chanrobles virtual law librar"

The other charges of -alpractice against &tt". &ntiniw and &tt". !ovellanos should be dis-issed for lacE ofevidence.chanroblesvirtualawlibrar"chanrobles virtual law librar"

During the proceedings in &d-inistrative Case *o. 154, 2"dia 0ernal testified in full on directeAa-ination, but she never sub-itted herself for cross'eAa-ination. )everal subpoenas for cross'eAa-ination were unheeded. )he eventuall" reuested the withdrawal of herco-plaint.chanroblesvirtualawlibrar"chanrobles virtual law librar"

Procedural due process de-ands that respondent law"er should be given an opportunit" to cross'eAa-ine thewitnesses against hi-. ?e eno"s the legal presu-ption that he is innocent of the charges against hi- until

the contrar" is proved. 6)antos vs. Dichoso, +4 )CR& %##7. The case -ust be established b" clear,convincing and satisfactor" proof. 6Ca-us vs. Dia>, &d-. Case *o. 1%1%, =ebruar" B, 1B+B7, )ince &tt".&ntiniw was not accorded this procedural due process, it is but proper that the direct testi-on" of 2"dia0ernal be stricEen out.chanroblesvirtualawlibrar"chanrobles virtual law librar"

n view also of the affidavit of desistance eAecuted b" the co-plainant, &d-inistrative Case *o. 154should be dis-issed. &lthough the filing of an affidavit of desistance b" co-plainant for lacE of interest doesnot ipso facto result in the ter-ination of a case for suspension or disbar-ent of an erring law"er 6Munar vs.=lores, 1## )CR& 44+7, 8e are constrained in the case at bar, to dis-iss the sa-e because there was noevidence to substantiate the charges.chanroblesvirtualawlibrar"chanrobles virtual law librar"

The additional charge against &tt". &ntiniw in &d-inistrative Case *o. 1B1 is predicated on theinfor-ation furnished b" 2"dia 0ernal. t was not based on the personal Enowledge of Constancia 2.alencia< hence, hearsa". @&n" evidence, whether oral or docu-entar", is hearsa" if its probative value is not

based on the personal Enowledge of the witness but on the Enowledge of so-e other person not on thewitness stand.@ 6Regalado, Re-edial 2aw Co-pendiu-, %th ed., vol. #, 1B+B, p. 4+%7. 0eing hearsa", theevidence presented is inad-issible.chanroblesvirtualawlibrar"chanrobles virtual law librar"

The additional charge filed b" Constancia 2. alencia against &tt". !ovellanos in &d-inistrative Case *o.1B1 was not proved at all. Co-plainant failed to prove her additional charges.

There is no evidence on record that the three law"ers involved in these ad-inistrative cases conspired ineAecuting the falsified @Co-praventa Definitiva@ and rigged the Civil Case *o. '#1$.chanroblesvirtualawlibrar"chanrobles virtual law librar"

&tt". !ovellanos is a distant Ein of the Ra"-undos and alencias. n fact, he and the alencias are neighborsand onl" two -eters separate their houses. t would not be believable that &tt". !ovellanos, a practicinglaw"er, would hold a -eeting with the heirs of Pedro Ra"-undo in his house with the intention of inducingthe- to sue the alencias. &tt". !ovellanos even tried to settle the differences between the parties in a-eeting held in his house. ?e appeared in Civil Case *o. '#1$ as an involuntar" witness to attest to theholding of the conference.chanroblesvirtualawlibrar"chanrobles virtual law librar"

0esides, the ca-araderie a-ong law"ers is not proof of conspirac", but a sign of brotherhood a-ong the-.ne of the fourfold duties of a law"er is his dut" to the 0ar. & law"er should treat the opposing counsel, andhis brethren in the law profession, with courtes", dignit" and civilit". The" -a" @do as adversaries do in law<strive -ightil" but 6the"7 eat and drinE as friends.@ This friendship does not connoteconspirac".chanroblesvirtualawlibrar"chanrobles virtual law librar"

8?/R/=R/, udg-ent is hereb" rendered declaring< 1. Dionisio &ntiniw D)0&RR/D fro- the practiceof law, and his na-e is ordered stricEen off fro- the roll of attorne"s #. &rsenio =er. Cabanting)9)P/*D/D fro- the practice of law for siA -onths fro- finalit" of this udg-ent and . &d-inistrativeCase *o. 1B1 against &ttorne" /duardo !ovellanos and additional charges therein, and &d-inistrative Case *o. 154 D)M))/D.chanroblesvirtualawlibrar"chanrobles virtual law librar"

) RD/R/D.

THIRD DIVISION

?!.C. No. 24


15/32

CORTES, J.

n a verified co-plaint for disbar-ent dated !ul" 5, 1B+#, Mauro P. Mananuil charged respondent &tt".Crisosto-o C. illegas with gross -isconduct or -alpractice co--itted while acting as counsel of record of one =eliA 2eong in the latter:s capacit" as ad-inistrator of the Testate /state of the late =elo-ina 3erna in

)pecial Proceedings *o. 4%$ before then Court of =irst nstance of *egros ccidental. The co-plainant wasappointed special ad-inistrator after =eliA 2eong died.

n co-pliance with a resolution of this Court, respondent filed his co--ent to the co-plaint on !anuar" #$,1B+. &fter co-plainant filed his repl", the Court resolved to refer the case to the )olicitor (eneral forinvestigation, report and reco--endation.

n a hearing conducted on Ma" 15, 1B+5 b" the investigating officer assigned to the case, counsel for theco-plainant proposed that the case be considered on the basis of position papers and -e-oranda to besub-itted b" the parties. Respondent agreed. Thus, the investigating officer reuired the parties to sub-ittheir respective position papers and -e-oranda, with the understanding that with or without the -e-oranda,the case will be dee-ed sub-itted for resolution after the eApiration of $ da"s. n co-pliance, both partiessub-itted their respective position papers but no -e-orandu- was filed b" either part". Thereafter, thecase was dee-ed sub-itted.

n the pleadings sub-itted before the Court and the ffice of the )olicitor (eneral, co-plainant alleges thatover a period of #$ "ears, respondent allowed lease contracts to be eAecuted between his client =eliA 2eong

and a partnership ?!) D/ !)/ 22/(&), of which respondent is one of the partners, covering several parcels of land of the estate, i.e. 2ots *os. 11#4, 1##+, ###1, #4$#, BB, B4# and B5 of the Tana"Cadastre, under iniuitous ter-s and conditions. Moreover, co-plainant charges that these contracts were-ade without the approval of the probate court and in violation of &rticles 14B1 and 1%4% of the new CivilCode.

n the basis of the pleadings sub-itted b" the parties, and other pertinent records of the investigation, the)olicitor (eneral sub-itted his report dated =ebruar" #1, 1BB$, finding that respondent co--itted a breachin the perfor-ance of his duties as counsel of ad-inistrator =eliA 2eong when he allowed the renewal ofcontracts of lease for properties involved in the testate proceedings to be undertaEen in favor of ?!) D/!)/ 22/(&) without notif"ing and securing the approval of the probate court. ?owever, the )olicitor(eneral opined that there was no sufficient evidence to warrant a finding that respondent had allowed the properties to be leased in favor of his fa-il" partnership at a ver" low rental or in violation of &rticles 14B1and 1%4% of the new Civil Code. Thus, the )olicitor (eneral reco--ended that respondent be suspendedfro- the practice of law for a period of T?R// 67 -onths with a warning that future -isconduct onrespondent:s part will be -ore severel" dealt with GReport and Reco--endation of the )olicitor (eneral, pp.1'1$ Rollo, pp. '4%. &lso, Co-plaint of the )olicitor (eneral, pp. 1' Rollo, pp. 4'4BH.chanrobles.co- <virtual law librar"

&s gleaned fro- the record of the case and the report and reco--endation of the )olicitor (eneral, thefollowing facts are uncontroverted


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647 Public officers and e-plo"ees, the propert" of the )tate or of an" subdivision thereof, or of an"govern-ent owned or controlled corporation, or institution, the ad-inistration of which has been intrusted tothe- this provision shall appl" to udges and govern-ent eAperts who, in an" -anner whatsoever, taEe partin the sale

657 !ustices, udges, prosecuting attorne"s, clerEs of superior and inferior courts, and other officers ande-plo"ees connected with the ad-inistration of ustice, the propert" or rights in litigation or levied upon oneAecution before the court within whose urisdiction or territor" the" eAercise their respective functions this

prohibition includes the act of acuiring b" assign-ent and shall appl" to law"ers, with respect to the propert" and rights which -a" be the obect of an" litigation in which the" -a" taEe part b" virtue of their profession.

6%7 &n" others speciall" disualified b" law. = = =

G&rticle 14B1 of the new Civil Code 1mp"asis supplied .H

The above disualification i-posed on public and udicial officers and law"ers is grounded on public polic"considerations which disallow the transactions entered into b" the-, whether directl" or indirectl", in viewof the fiduciar" relationship involved, or the peculiar control eAercised b" these individuals over the properties or rights covered G)ee Rubias v. 0atiller, (.R. *o. 2'5$#, Ma" #B, 1B, 51 )CR& 1#$MaharliEa Publishing Corporation v. Tagle, (.R. *o. %55B4, !ul" B, 1B+%, 14# )CR& 55 =ornilda v. The0ranch 1%4, RTC =ourth !udicial Region, Pasig, (.R. *o. #$%, ctober 5, 1B++, 1%% )CR& #+1 and!anuar" #4, 1B+B, 1%B )CR& 51H.

Thus, even if the parties designated as lessees in the assailed lease contracts were the @?eirs of !oseillegas@ and the partnership ?!) D/ !)/ 22/(&), and respondent signed -erel" as an agent of thelatter, the Court rules that the lease contracts are covered b" the prohibition against an" acuisition or lease b" a law"er of properties involved in litigation in which he taEes part. To rule otherwise would be to lend asta-p of udicial approval on an arrange-ent which, in effect, circu-vents that which is directl" prohibited b" law. =or, piercing through the legal fiction of separate uridical personalit", the Court cannot ignore theobvious i-plication that respondent as one of the heirs of !ose illegas and partner, later -anager of, in?!) D/ !)/ 22/(&) stands to benefit fro- the contractual relationship created between his client=eliA 2eong and his fa-il" partnership over properties involved in the ongoing testate proceedings.

n his defense, respondent clai-s that he was neither aware of, nor participated in, the eAecution of theoriginal lease contract entered into between his client and his fa-il" partnership, which was then represented b" his brother'in'law Marcelo Pastrano. &nd although he ad-its that he participated in the eAecution ofsubseuent renewals of the lease contract as -anaging partner of ?!) D/ !)/ 22/(&), he arguesthat he acted in good faith considering that the heirs of =ilo-ena 3erna consented or acuiesced to the ter-sand conditions stipulated in the original lease contract. ?e further contends that pursuant to the ruling of theCourt in Tuason v. Tuason G++ Phil. 4#+ 61B517H the renewal contracts do not fall within the prohibition of&rticles 14B1 and 1%4% since he signed the sa-e as a -ere agent of the partnership.

Respondent:s contentions do not provide sufficient basis to escape disciplinar" action fro- this Court.

t taAes this Court:s i-agination that respondent disclai-s an" Enowledge in the eAecution of the originallease contract between his client and his fa-il" partnership represented b" his brother'in'law. 0e that as it-a", it cannot be denied that respondent hi-self had Enowledge of and allowed the subseuent renewals ofthe lease contract. n fact, he activel" participated in the lease contracts dated !anuar" 1, 1B5 andDece-ber 4, 1B+ b" signing on behalf of the lessee ?!) D/ !)/ 22/(&).chanrobles lawlibrar" <rednad

Moreover, the clai- that the heirs of =ilo-ena 3erna have acuiesced and consented to the assailed leasecontracts does not -ilitate against respondent:s liabilit" under the rules of professional ethics. The prohibition referred to in &rticles 14B1 and 1%4% of the new Civil Code, as far as law"ers are concerned, isintended to curtail an" undue influence of the law"er upon his client on account of his fiduciar" and

confidential association G)otto v. )a-son, (.R. *o. 2'1%B1, !ul" 1, 1B%#, 5 )CR& H. Thus, the law-aEes the prohibition absolute and per-anent GRubias v. 0atiller, supraH. &nd in view of Canon 1 of the newCode of Professional Responsibilit" and )ections + S # of Rule 1+ of the Revised Rules of Court,whereb" law"ers are dut"'bound to obe" and uphold the laws of the land, participation in the eAecution ofthe prohibited contracts such as those referred to in &rticles 14B1 and 1%4% of the new Civil Code has beenheld to constitute breach of professional ethics on the part of the law"er for which disciplinar" action -a" be brought against hi- G)ee 0autista v. (on>ale>, &d-. Matter *o. 1%#5, =ebruar" 1#, 1BB$H. &ccordingl", theCourt -ust reiterate the rule that the clai- of good faith is no defense to a law"er who has failed to adhere

faithfull" to the legal disualifications i-posed upon hi-, designed to protect the interests of his client G)een re Ruste, $ Phil #4 61B4$7&lso, )everino v. )everino, 44 Phil. 4 61B#7H.

*either is there -erit in respondent:s reliance on the case of Tuason v. Tuason Gsupra.H t cannot be inferredfro- the state-ents -ade b" the Court in that case that contracts of sale or lease where the vendee or lesseeis a partnership, of which a law"er is a -e-ber, over a propert" involved in a litigation in which he taEes part b" virtue of his profession, are not covered b" the prohibition under &rticles 14B1 and 1%4%.

?owever, the Court sustains the )olicitor (eneral:s holding that there is no sufficient evidence on record towarrant a finding that respondent allowed the properties of the estate of =ilo-ena 3erna involved herein to be leased to his fa-il" partnership at ver" low rental pa"-ents. &t an" rate, it is a -atter for the court presiding over )pecial Proceedings *o. 4%$ to deter-ine whether or not the agreed rental pa"-ents -ade b"respondent:s fa-il" partnership is reasonable co-pensation for the use and occupanc" of the estate properties.

Considering thus the nature of the acts of -isconduct co--itted b" respondent, and the facts andcircu-stances of the case, the Court finds sufficient grounds to suspend respondent fro- the practice of law

for a period of three 67 -onths.

8?/R/=R/, finding that respondent &tt". Crisosto-o C. illegas co--itted acts of gross -isconduct,the Court Resolved to )9)P/*D respondent fro- the practice of law for four 647 -onths effective fro- thedate of his receipt of this Resolution, with a warning that future -isconduct on respondent:s part will be-ore severel" dealt with. 2et copies of this Resolution be circulated to all courts of the countr" for theirinfor-ation and guidance, and spread in the personal record of &tt". illegas.

) RD/R/D.

=ernan, C.7., (utierre>, !r., =eliciano and 0idin, 77., concur.

EN +!NC

?!.M. No. 1625. ebr*r( 12, 10.@

!NGE- -. +!UTIST!, Complainant , v. !TT". R!MON !. GON/!-ES, Respondent .

S"--!+US

1. 2/(&2 /T?C) D)0&RM/*T = )90M))* = &TTR*/I) R/=/R/*C/ T T?/ 0P =CMP2&*T) &(&*)T 2&8I/R) ) *T M&*D&TRI C&)/) M&I 0/ R/=/RR/D T T?/

16


17/32

)2CTR (/*/R&2. Contrar" to respondent:s clai-, reference to the 0P of co-plaints againstlaw"ers is not -andator" upon the Court G3aldivar v. )andiganba"an, (.R. *os. B%B$'$ 3aldivar v.(on>ales, (.R. *o. +$5+, ctober , 1B++H. Reference of co-plaints to the 0P is not an eAclusive procedure under the ter-s of Rule 1B'0 of the Revised Rules of Court GbidH. 9nder )ections 1 and 14 ofRule 1B'0, the )upre-e Court -a" conduct disciplinar" proceedings without the intervention of the 0P b"referring cases for investigation to the )olicitor (eneral or to an" officer of the )upre-e Court or udge of alower court. n such a case, the report and reco--endation of the investigating official shall be revieweddirectl" b" the )upre-e Court. The Court shall base its final action on the case on the report and

reco--endation sub-itted b" the investigating official and the evidence presented b" the parties during theinvestigation.

#. D. D. D. *2I P/*D*( C&)/), T?/ */)T(&T* = 8?C? ?&) *T 0//*)90)T&*T&22I CMP2/T/D 0I T?/ )2CTR (/*/R&2 )?&22 0/ TR&*)=/RR/D TT?/ 0P. There is no need to refer the case to the 0P since at the ti-e of the effectivit" of Rule 1B'0G!une 1, 1B++H the investigation conducted b" the ffice of the )olicitor (eneral had been substantiall"co-pleted. )ection #$ of Rule 1B'0 provides that onl" pending cases, the investigation of which has not been substantiall" co-pleted b" the ffice of the )olicitor (eneral, shall be transferred to the 0P. n thiscase the investigation b" the )olicitor (eneral was ter-inated even before the effectivit" of Rule 1B'0.Respondent hi-self ad-itted in his -otion to dis-iss that the )olicitor (eneral ter-inated the investigationon *ove-ber #%, 1B+%, the date when respondent sub-itted his repl" -e-orandu- GMotion to Dis-iss, p.1 Record, p. 5H

. D. D. D. R/=/RR&2 = C&)/ 8?/R/ T?/ )2CTR (/*/R&2 ?&) &2R/&DI M&D/ &T?R9(? */)T(&T* R/)92T) * D9P2C&T* = T?/ PRC//D*() &*D D/2&I. There is no need for further investigation since the ffice of the )olicitor (eneral alread" -ade a

thorough and co-prehensive investigation of the case. To refer the case to the 0P, as pra"ed for b" therespondent, will result not onl" in duplication of the proceedings conducted b" the )olicitor (eneral but alsoto further dela" in the disposition of the present case which has lasted for -ore than thirteen 617 "ears.

4. C*)TT9T*&2 2&8 022 = R(?T) D9/ PRC/)) * D/*&2 =, 8?/R/R/)P*D/*T 8&) (/* &MP2/ PPRT9*TI T PR/)/*T /D/*C/. Respondent:sassertion that he still has so-e evidence to present does not warrant the referral of the case to the 0P.Considering that in the investigation conducted b" the )olicitor (eneral respondent was given a-pleopportunit" to present evidence, his failure to adduce additional evidence is entirel" his own fault. There wastherefore no denial of procedural due process. The record shows that respondent appeared as witness forhi-self and presented no less than eleven 6117 docu-ents to support his contentions. ?e was also allowed tocross'eAa-ine the co-plainant who appeared as a witness against hi-.

5. C2 2&8 )&2/) C&P&CTI T 09I 2&8I/R ) PR?0T/D =RM &CK9R*( ?)C2/*T:) PRP/RTI R *T/R/)T * 2T(&T* 8?C? ?/ M&I T&Q/ P&RT. The recordshows that respondent prepared a docu-ent entitled @Transfer of Rights@ which was signed b" on &ugust 1,1B1. The docu-ent assigned to respondent one'half 61F#7 of the properties of the =ortunados covered b"TCT *o. T'1B#B, with an area of #B.%5$ s. -., and TCT *o. T'$41, with an area of #.B$ s. -., for andin consideration of his legal services to the latter. &t the ti-e the docu-ent was eAecuted, respondent Enewthat the above-entioned properties were the subect of a civil case GCivil Case *o. K'1514H pending beforethe Court of =irst nstance of Kue>on Cit" since he was acting as counsel for the =ortunados in said caseG)ee &nneA @0@ of riginal Co-plaint, p. 1# Rollo, p. 1%H. n eAecuting the docu-ent transferring one'half61F#7 of the subect properties to hi-self, respondent violated the law eApressl" prohibiting a law"er fro-acuiring his client:s propert" or interest involved in an" litigation in which he -a" taEe part b" virtue of his profession G&rticle 14B1, *ew Civil CodeH.

%. 2/(&2 /T?C) D)0&RM/*T &*D )9)P/*)* P9RC?&)/ 0I & 2&8I/R = C2/*T:)PRP/RTI R *T/R/)T * 2T(&T* ) & 0R&*C? = PR=/))*&2 /T?C) &*DC*)TT9T/) M&2PR&CTC/. This Court has held that the purchase b" a law"er of his client:s propert" or interest in litigation is a breach of professional ethics and constitutes -alpractice G?ernande> v.illanueva, 4$ Phil. 4 61B#$7 (o 0eltran v. =ernande>, $ Phil. #4+ 61B4$7H.

. D. D. TR&*)(R/))* = &*I 2&8 0I & 2&8I/R ) & R/P92)/ &*D

R/PR/?/*)02/ &CT. The ver" first Canon of the new Code states that @a law"er shall uphold theConstitution, obe" the laws of the land and pro-ote respect for law and legal process.@ Moreover, Rule 1+,)ec. of the Revised Rules of Court reuires ever" law"er to taEe an oath to @obe" the laws Gof the Republicof the PhilippinesH as well as the legal orders of the dul" constituted authorities therein.@ &nd for an"violation of this oath, a law"er -a" be suspended or disbarred b" the )upre-e Court GRule 1+, )ec. #,Revised Rules of CourtH. &ll of these underscore the role of the law"er as the vanguard of our legal s"ste-.The transgression of an" provision of law b" a law"er is a repulsive and reprehensible act which the Courtwill not countenance. n the instant case, respondent, having violated &rt. 14B1 of the Civil Code, -ust be

held accountable both to his client and to societ".

+. D. D. *T8T?)T&*D*( T?/ &0)/*C/ = PR)* PR?0T*( P9RC?&)/ =C2/*T:) PRP/RTI &*D *T/R/)T, & D)CP2*&RI &CT* M&I 0/ 0R9(?T &(&*)T2&8I/R. t should be noted that the persons -entioned in &rt. 14B1 of the Civil Code are prohibitedfro- purchasing the propert" -entioned therein because of their eAisting trust relationship with the latter. &law"er is disualified fro- acuiring b" purchase the propert" and rights in litigation because of hisfiduciar" relationship with such propert" and rights, as well as with the client. &nd it cannot be clai-ed thatthe new Code of Professional Responsibilit" has failed to e-phasi>e the nature and conseuences of suchrelationship. Canon 1 states that @a law"er owes fidelit" to the cause of his client and he shall be -indful of the trust and confidence reposed in hi-.@ n the other hand, Canon 1% provides that @a law"er shall hold i

sales cases- parties to a contract

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