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Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-24750 May 16, 1980

DOROTEO BANAWA, JULIANA MENDOZA, CASIANO AMPONIN and GLICERIA ABRENICA,

petitioners,
vs.
PRIMITIVA MIRANO, GREGORIA MIRANO, JUANA MIRANO and MARCIANO MIRANO, respondents.

Jose W. Diokno for petitioners.

Recto Law Office for respondents.

FERNANDEZ, J.: ñé+.£ªwph!1

This is a petition for review by certiorari of the decision of the Court of Appeals promulgated on April 12,
1965 1 in CA G.R. No. 23597-R, entitled "Primitive Mirano, et al., Plaintiffs-Appellees, versus, Doroteo
Banawa, et al., Defendants-Appellants", the dispositive part of which is: têñ.£îhqwâ£

In view of the foregoing, the appealed judgment is hereby affirmed, with costs against
defendants-appellants.

The judgment of the lower court which was affirmed reads as follows: têñ.£îhqwâ£

WHEREFORE, judgment is hereby rendered:

(a) Declaring the plaintiffs to be the owners of the two parcels of land described in paragraph 3
of the complaint;

(b) Ordering the defendants to deliver the possession of the said parcels of land to the plaintiffs;

(c) Declaring the deed of sale executed by Roman Biscocho, Paula Biscocho and Maria Carmen
Mendoza in favor of Doroteo Banawa and Juliana Mendoza, dated April 4, 1940, as evidenced
by Exhibit 'E' and its registration in the registry of deeds of Batangas, to be null and void;

(d) Declaring null and void the deed of donation, dated August 7, 1956, evidenced by Exhibit 'D'
executed by the spouses Doroteo Banawa and Juliana Mendoza in favor of the spouses
Casiano Amponin and Gliceria Abrenica as well as Tax Declarations No. 26818 in the names of
the spouses Doroteo Banawa and Juliana Mendoza, and No. 26845 in the names of the
spouses Casiano Amponin and Gliceria Abrenica, and the registration of the said deed of
donation in the registry of deeds of Batangas; and
 (e) Ordering the defendants to pay to the plaintiffs actual damages in the amount of P 4,500 and
attorney's fees in the amount of P500.00, and the costs of this action.

SO ORDERED. 2

The spouses Doroteo Banawa and Juliana Mendoza both died during the pendency of this case in the Court
of Appeals. They have been substituted by the petitioners Casiano Amponin and his wife Gliceria Abrenica,
legally adopted daughter of one of the deceased petitioners and donee of the Carsuche property. 3

The petitioners filed on May 20, 1965, a motion for reconsideration of the decision of the Court of Appeals.
Said motion was denied on June 28, 1965. 4

As found by the Court of Appeals, the facts are: têñ.£îhqwâ£

It appears that sometime in 1911, Maria Mirano a niece of appellant Juliana Mendoza, and who
was then about nine years old, was taken in by the appellants-spouses, Doroteo Banawa and
Juliana Mendoza, in the latter's house in Mahabang Lodlod, Taal, Batangas. Appellants spouses
being childless, treated and reared her up like their own child. They hired a private tutor to teach
her the rudiments of reading, writing and arithmetic. They supported her, gave her money,
clothes and even jewelry. Maria reciprocated their care and affection by helping with the
household chores.

A few years later, the spouses opened up a store for general merchandise in barrio Lutucan,
Sariaya, Quezon, from which they derived considerable income and which enabled them to
acquire several parcels of land.

On July 31, 1949, after a lingering illness, Maria Mirano died in Taal, Batangas while still living
with the spouses. At the time of her death she left as her only nearest relatives the herein
plaintiffs, namely Primitiva Mirano, who is a surviving sister, and Gregoria, Juana and Marciano,
all surnamed Mirano, who are the children of a deceased brother, Martin Mirano.

The parties do not dispute the Identity of the two parcels of land in controversy, which are
described in paragraph 3 of the complaint as follows: têñ.£îhqwâ£

1. A parcel of sugar land situated in the Barrio of Iba, Taal, Batangas, with an area of
44,200 square meters, more or less. Bounded on the North, by Ravine; on the East,
by the property of Leodovico Garcia; on the South by the property of Gregorio
Amponin; and on the West, by the property of Gregorio Maria Aniversario (now
Doroteo Banawa). Under Tax Declaration No. 25994 in the name of Maria Mirano
and assessed at P2,210.00.

2. A parcel of sugar land situated in the barrio of Carsuche, Taal, Batangas, with an
area of 54,093 square meters, more or less. Bounded on the North, by the property
of Agapito Aro and Alley; on the East, by an Alley; on the South, by the properties of
Filomeno Diomampo, Gregorio de la Rosa and Andres Moratilla; and on the West,
by the property of Agapito Aro. Under Tax Declaration No. 19786 in the name of
Maria Mirano and assessed at P2,760.00.

For purposes of clearness and convenience, and since the respective assertions and evidences
adduced by the parties regarding the two parcels of land are in sharp divergence, we shall refer
to the first parcel as the Iba Property and to the second parcel as the Carsuche property and,
moreover, we shall treat and discuss the two separately.

Parcel 1, or the Iba Property.

The parties agree that the Iba Property was originally owned by Placido Punzalan from whom it
was acquired on May 5, 1921. Plaintiffs' evidence upon this point tends to show that the
acquisition of the said parcel of land was pursuant to a deed of sale contained in a public
instrument acknowledged before Notary Public Ramon A. Cabrera on the date aforesaid, a
photostatic copy of which was introduced in evidence as Exhibit 'A', the same having been
secured from an original copy on file with the Division of Archives, Bureau of Libraries. The deed
of sale in question states that the Iba property consisted formerly of two parcels of land and that
they were sold for the amount of P2,000.00 in favor of Maria Mirano. Defendant Doroteo
Banawa impliedly admitted the execution of this notarial document when he declared that in the
execution of the document concerning the purchase of the Iba property from Punzalan the
notary public charged him P20.00 and another P5.00 for stamps in the name of Maria Mirano
since 1923 (Exhs. 'A-1' to 'A-7').

By contrast, defendants' claim of ownership over the Iba property is predicated upon their
assertion that the money used in buying said land pertained to the spouses Doroteo Banawa
and Juliana Mendoza. Defendants contend that since 1919 Placido Punzalan borrowed money
from defendant spouses on three different occasions for the sums of P1,200.00, P1,800.00 and
P1,080.00, respectively, each of which was evidenced by Exhs. '1', '2', and '3', respectively.
Upon the failure of Placido Punzalan to discharge said obligations in 1921, he agreed to sell the
land aforementioned to the spouses for P 3,700.00, but as the total value of the three loans was
P4,080.00, Punzalan had to reimburse to said spouses the difference of P380.00. The
document of sale stated the price to be only P2,000.00 in view of the fact that Doroteo Banawa
had only P25.00 with him when the deed was prepared by the notary public, and the latter was
charging P10.00 for every one thousand pesos mentioned as the consideration of the contract,
Defendants likewise maintain that the sale was made to appear in favor of Maria Mirano
because said spouses being already old, they want to leave something to Maria Mirano for her
to lean upon when they would have been gone. They, however, made Maria understand that
although the property was placed under her name, they would continue to be the owners
thereof, to administer and enjoy the fruits of the same as long as they live, and that she would
become the owner of the land only after their death. Maria supposedly expressed her conformity
to and appreciation for the said arrangement. Maria Mirano was 19 years old when the deed of
sale was executed.

Parcel 2, or the Carsuche Property.

There is no dispute between the parties that the Carsuche property was acquired by way of
purchase from its original owners, to wit: Roman Biscocho, his sister Paula Biscocho, and sister-
in-law Carmen Mendoza. The sale took place sometime in December, 1935. There is, however,
a sharp conflict of evidence between the parties concerning the form of the document
evidencing the same and in whose favor the sale was made at that time. The plaintiffs claim that
the sale was evidenced by a public instrument executed before and ratified by Notary Public
Vicente Ilagan of Taal, Batangas, and that the vendee mentioned in the said document was
Maria Mirano. The defendants, on the other hand, assert that the sale was evidenced by a
private writing prepared in the handwriting of Roman Biscocho and that it was in favor of the
spouses Doroteo Banawa and Juliana Mendoza. Neither the public instrument allegedly ratified
by Atty. Ilagan nor the private writing supposedly prepared by Roman Biscocho was presented
before the lower court.

After laying the proper predicate for the presentation of secondary evidence, the plaintiffs
presented Atty. Vicente Ilagan and Roman Biscocho to testify upon the execution of the
aforesaid public instrument in December, 1935. These two declared that sometime in December,
1935, the spouses Doroteo Banawa and Juliana Mendoza, Maria Mirano, Roman Biscocho,
Paula Biscocho and Carmen Mendoza, accompanied by Atty. Regino Aro, went to the office of
 Atty. Ilagan in Taal, Batangas; that Atty. Aro, who was a classmate of Atty. Ilagan in the law
school, asked the latter's permission to use his typewriter on which he prepared a document in
English and which he asked Atty. Ilagan to ratify; that Atty. Ilagan translated into Tagalog the
contents of the said document to the parties and. the witnesses, after which they all signed the
same; that the document involved the sale of the Carsuche property in favor of Maria Mirano:
that after paying him P20.00 for his services which Atty. Ilagan would not accept at first, Doroteo
Banawa asked Atty. Ilagan in Tagalog whether the document that he ratified was 'strong enough'
(Matibay) to safeguard the rights of Maria Mirano, to which Atty. Ilagan answered in the
affirmative.

Doroteo Banawa, on the other hand, stated that on being offered the Carsuche property by the
owners thereof, they agreed on the purchase price of P3,700.00 of which a down payment of
P1,200.00 was made and, later, an additional sum of P100.00 was given to Roman Biscocho,
both payments being evidenced by a receipt dated December 15, 1936 (Exh. '9'). A few days
later, Roman Biscocho prepared in his own handwriting a private document selling the Carsuche
property in favor of the spouses Doroteo Banawa and Juliana Mendoza for the sum of
P4,000.00, the vendors having asked for a P300.00 increase in price. Doroteo Banawa,
thereafter brought said private document to the municipal treasurer of Taal, Batangas, to whom
he expressed the desire to have the land declared in the name of Maria Mirano so that the latter
might attend to the payment of taxes over the land whenever he was away. This wish of Doroteo
Banawa was done by his thumb-marking an affidavit, thus accounting for the fact that said land
appears in the name of Maria Mirano in the tax declarations covering the same from 1934 to
1956. 5

The petitioners assign the following errors: têñ.£îhqwâ£

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN LAW IN RULING THAT THE
PLACING OF IBA PROPERTY IN THE NAME OF THE LATE MARIA MIRANO WAS IN THE
NATURE OF A DONATION INTER-VIVOS.

II

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN LAW IN RULING THAT

PETITIONERS' INTERPRETATION OF ARTICLE 632 OF THE OLD CIVIL CODE IS TOO
LITERAL AND IGNORES THE RATIONALE OF THE LEGAL PROVISION.

III

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN LAW IN RULING THAT THE
'EXCEPTIVE' CLAUSE' OF ARTICLE 1448 OF THE CIVIL CODE IS APPLICABLE IN THE
PRESENT CASE.

IV

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN LAW IN RULING THAT

SECTION 5, RULE 100 OF THE OLD RULES OF COURT DOES NOT APPLY IN THE
INSTANT CASE BECAUSE MARIA MIRANO WAS NOT LEGALLY ADOPTED.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN LAW IN RULING WITH

RESPECT TO THE CARSUCHE PROPERTY (LOT NO. 2) THAT THE DEED OF SALE
EXECUTED IN 1940 IN FAVOR OF THE PETITIONERS DOROTEO BANAWA AND HIS WIFE
 JULIANA MENDOZA AND WHICH WAS DULY REGISTERED DID NOT IMPAIR THE
PRETENDED SALE TO MARIA MIRANO. 6

The first, second, third and fourth errors assigned refer to the Iba property, parcel 1, while the fifth error
assigned refers to the Carsuche property, Lot 2. 7

As may be discerned from the assignment of errors, the basic issue is the ownership of the two parcels of
land in question. The plaintiffs appellees, respondents herein, assert title to the lands as heirs of Maria
Mirano. Defendants-appellants, petitioners herein, claim ownership over them by virtue of purchase from the
original owners.

Considering that in the case at bar the findings of fact of the Court of Appeals are not contrary to those of
the trial court, a minute scrutiny by this Court of said findings is not necessary. In Tolentino vs. de Jesus, et
al., 8 this Court held:
têñ.£îhqwâ£

The findings of facts of the respondent Court of Appeals are conclusive on the parties and on
this Court (Tamayo vs. Callejo, L- 25563, July 28, 1972, 46 SCRA 27; Nery, et al. vs. Lorenzo, et
al., L-23096 & L-23376, April 27, 1972, 44 SCRA 43 1; Villacrucis vs. CA, L-29831, March 29,
1972, 44 SCRA 176; Dela Cruz, et al. vs. CA, L-24000, Nov. 29, 1971, 42 SCRA 68; Naga Dev.
Corp. vs. CA, L-28175, Sept. 30, 1971, 41 SCRA 105, 115; Lacson & Basilio vs. Pineda, et al.,
L-28523, July 16, 1971, 40 SCRA 35; Quiñ;ano, et al. vs. CA, et al., L-23024, May 31, 1971, 39
SCRA 227; Reyes, et al. vs. CA, et al., L-28466, March 27, 1971, 38 SCRA 138, 142; Gotamco
Hermanas vs. Shotwell, et al., L-22519, March 27, 1971, 38 SCRA 112-117; Limjoco vs. CA, L-
20656, Feb. 27, 1971, 37 SCRA 663-669; De Garcia, et al. vs. CA, L-20264, Jan. 30, 1971, 37
SCRA 130, 136-137; Simeon vs. Peñ;a, L-29049, Dec. 29, 1970, 36 SCRA 611), unless (1) the
conclusion is a finding grounded entirely on speculation, surmise and conjectures; (2) the
inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the judgment is
based on misapprehension of facts; (5) the Court of Appeals went beyond the issues of the case
and its findings are contrary to the admission of both appellant and appellees [Roque vs. Buan,
L-22459, Oct. 31, 1967, 21 SCRA 648]; (6) the findings of facts of the Court of Appeals are
contrary to those of the trial court; (7) said findings of facts are conclusions without citation of
specific evidence on which they are based; (8) the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the respondents [Garcia vs. CA, L-26490,
June 30, 1970, 33 SCRA 622] ; and (9) when the finding of fact of the Court of Appeals is
premised on the absence of evidence and is contradicted by evidence on record [Salazar vs.
Gutierrez, L-21727, May 29, 1970, 33 SCRA 243].

The instant case does not fall under any of the exceptions.

However, all the issues raised by the petitioners shall be passed upon individually.

The first error assigned reads: têñ.£îhqwâ£

The Honorable Court of Appeals gravely erred in law in ruling that the placing of the Iba Properly
in the name of the late Maria Mirano was in the nature of a donation inter-vivos.

The respondents 9 correctly pointed out that neither the Court of Appeals nor the Court of First Instance of
Batangas categorically stated that the placing of the properties in the name of Maria Mirano was in the
nature of a donation inter-vivos. In rejecting the petitioners' contention that a donation mortis causa was
executed, the Court of Appeals said that, under the facts and circumstances narrated by the petitioners, the
placing of the Iba property in the name of Maria Mirano-if it was to be called a donation at all - was not in the
nature of a donation mortis causa, but rather it would be in the nature of a donation inter-vivos, giving its
reasons and citing the applicable law and decisions of this Court on the matter. The Court of First Instance
made the same hypothetical conclusion. 10
The finding of the Court of First Instance of Batangas which was sustained by the Court of Appeals is that
what was donated by the spouses Doroteo Banawa and Juliana Mendoza to Maria Mirano was the money
used in the purchase of the lands in question. This conclusion of the Court of First Instance of Batangas was
supported by the testimony of Macario B. Aro, a nephew of the deceased Doroteo Banawa, that the money
used by Maria Mirano in the purchase of the Iba and Carsuche properties was given to her by, Doroteo
Banawa. 11

If the money used by Maria Mirano in purchasing the properties was given to her by the spouses Doroteo
Banawa and Juliana Mendoza, or by either of them, then the money had belonged to her. Maria Mirano
purchased and paid for the said properties with her money. As a matter or fact, the deed of sale, Exhibit "A",
12
recites as follows:
têñ.£îhqwâ£

Que en consideracion a la suma de Dos Mil Pesos moneda filipina (P2,000.00) que me ha
pagado Maria Mirano ... .

It is also contended by the petitioners that the deeds of sale executed by the owners of the land in favor of
Maria Mirano were simulated contracts intended to shortcut two different transactions: (1) a sale in favor of
the spouses Doroteo Banawa and Juliana Mendoza; and (2) a donation of lands by the spouses in favor of
Maria Mirano. 13

There are two kinds of simulated contracts, namely: the absolutely simulated contract and the relatively
simulated one. In both instances, however, their nullity is based on the want of true consent of the parties.
There is no intent to be bound or the true intent is hidden or concealed. Such contracts are even generally
regarded as fraudulent with intent of injuring third persons. The purpose, therefore, of a simulated contract
which may be annulled is to conceal the parties' true intent, or to deceive or defraud third persons.

From the record, there is no showing of deception or fraud, nor of concealment of intent of the parties as to
the sale of the Iba property by the vendors in favor of Maria Mirano. The transactions which transpired were
purely: (1) donations of money or things representing or equivalent to money by the spouses in favor of
Maria Mirano which could be made and accepted verbally; and (2) purchase of lands by Maria Mirano with
the use of that money or credits (pre-existing indebtedness in favor of the spouses) as consideration thereof.

The petitioners' contention that "the contract of sale had been intended to be a contract of sale between the
vendors and the spouses Doroteo Banawa and Juliana Mendoza" has no merit. The petitioners were
present when the sales were made to Maria Mirano. They were the ones who caused the titles to the
properties to be placed in the name of Maria Mirano because they wished "that after our death Maria Mirano
could have something for her maintenance. 14 Moreover, the testimony of Vicente Ilagan, the notary public
before whom the deed of sale was executed, to the effect that he was asked by Doroteo Banawa in Tagalog
"Kung matibay ang documenting ito para kay Maria" 15 and to which query he answered, "Yes, Sir", 16
supports this conclusion. The conduct of the spouses at the time of the execution of the contracts are
inconsistent with those which the petitioners, the late spouses and their successors-in interest, now assert.
Their intention to make Maria Mirano the owner of the said parcels of land was clearly shown by their
conduct at the time of the execution of the deeds of sale which influenced the vendors to believe that Maria
Mirano was indeed the vendee in their agreement. The petitioners had full knowledge of the facts
surrounding the execution of the document of sale. They are equitably estopped 17 to deny that the transfer
of the lands in question in favor of Maria Mirano was the actual and true intent of the parties as embodied in
the documents of sale of the Iba and Carsuche properties. The documents are what they purport to be —
contracts of sale from the vendors to the vendee, Maria Mirano.

The petitioners submit that since there was transfer of title to the land in litigation to Maria Mirano when the
purchase price was in fact actually paid by the petitioners-spouses, an implied trust was created. The
present law on implied trust is Article 1448 of the New Civil Code which provides: têñ.£îhqwâ£

Art. 1448. There is an implied trust when property is sold, and the legal estate is granted to one
 party but the price is paid by another for the purpose of having beneficial interest of the property.
The former is the trustee, while the latter is the beneficiary. However if the person to whom the
title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no
trust is implied by law, it being disputably presumed that there is a gift in favor of the child.

The transactions in question took place before the Civil Code of the Philippines became effective on August
30, 1950. Hence Article 1448 of said Code is not applicable. 18

Moreover, there is no showing that Maria Mirano bought the lands in question in trust for the petitioners.

The petitioners also claim that they have become owners of the properties by acquisitive prescription under
Article 1957 of the Old Civil Code which provides: têñ.£îhqwâ£

Ownership and other real rights in immovable property shall prescribe by possession in good
faith and under a just title for ten years as between persons present and for twenty years as
between absentees.

The above-cited provision speaks of two essential requirements: (1) possession for ten (10) years as
between persons present and twenty (20) years, for absentees; and (2) a just title.

As regards the Iba property (Lot No. 1), petitioners have not presented any title, just or otherwise, to support
their claim. And Article 1954 of the Old Civil Code provides, further, that a "just title must be proven; it never
can be presumed."

Not having a just title, as required by Article 1957 of the Old Civil Code, the petitioners cannot invoke
prescription with respect to the Iba property.

The petitioners also assert ownership by acquisitive prescription over the Iba property under Section 41 of
the Code of Civil Procedure. The pertinent portion of Section 41 of the Code of Civil Procedure reads têñ.£îhqwâ£

Ten years actual adverse possession by any person claiming to be the owner for that time of any
land or interest in land, uninterruptedly continued for ten years by occupancy, descent, grants, or
otherwise in whatever way such occupancy may have commenced or continued, shall vest in
every actual occupant or possessor of such land a full and complete title, saving to the persons
under disabilities the rights secured by the next section. In order to constitute such title by
prescription or adverse possession, the possession by the claimant or by the person under or
through whom he claims must have been actual open, public, continuous, under a claim of title
exclusive of any other right and adverse to all other claimants ...

It is a fact that while Maria Mirano was alive she possessed the property in question as the owner thereof
Hence, it is error for the petitioners to claim ownership over the Iba property by acquisitive prescription under
Article 41 of the Code of Civil Procedure for their possession of the said property became adverse and
exclusive only in July 1949 after Maria Mirano's death. From 1949 to the date of the filing in 1957 of the
present action by the respondents only eight years had elapsed.

The second error assigned is: têñ.£îhqwâ£

The Honorable Court of Appeals gravely erred in law in ruling that petitioners' interpretation of
Article 632 of the Old Civil Code is too literal and ignores the rationale of the legal provision.

Article 632 of the Old Civil Code provides: "Donations of personal property may be made verbally or in
writing. Verbal donation requires the simultaneous delivery of the gift. In the absence of this requisite the
donation shall produce no effect, unless made in writing and accepted in the same form."

It is contended by the petitioners that oral donation of personal property requires simultaneous delivery of
the gift. As regards the Iba property, the consideration given by Maria Mirano for the purchase of the said
property from Placido Punzalan was the pre- existing debts of the latter to the spouses Doroteo Banawa and
Juliana Mendoza.

The contention of the petitioners that there was no simultaneous delivery of the credits to Maria Mirano is
not meritorious. Delivery may be actual or constructive.

Actual delivery consists in the giving of actual possession to the vendee or his agent, as for example, in
manually transferring the possession of a thing from the vendor to the vendee.

Constructive delivery is a general term comprehending all those acts which, although not conferring physical
possession of the thing, have been held by construction of law equivalent to acts of real delivery, as for
example, the giving of the key to the house, as constructive delivery of the house from the vendor to the
vendee.

In the instant case, the oral donation of the gift consisting of pre-existing obligations of the vendor, Placido
Punzalan, was simultaneous or concurrent with the constructive delivery thereof to Maria Mirano when the
spouses consented to the execution of the deed of sale of the Iba property in favor of Maria Mirano. The
execution of the said deed of sale constituted payment by the vendor, Placido Punzalan, of his outstanding
obligations due to the spouses, Doroteo Banawa and Juliana Mendoza. Consequently, there was
constructive transfer of possession of the incorporeal rights of the spouses over the property in question to
Maria Mirano.

It is no longer necessary to discuss the third error assigned because of the holding that Article 1448 of the
New Civil Code has no retroactive application to the instant case.

Anent the fourth error assigned, the petitioners urge that the donor spouses are entitled to the land in
question by virtue of Section 5, Rule 100 of the Old Rules of Court, the pertinent portion of which reads: têñ.£îhqwâ£

... In case of the death of the child, his parents and relatives by nature, and not by adoption,
shall be his legal heirs, except as to property received or inherited by the adopted child from
either of his parents by adoption, which shall become the property of the latter or their legitimate
relatives who shall participate in the order established by the Civil Code for intestate estates.

The submission of the petitioners is that extrajudicial adoption is within the contemplation and spirit of this
rule of reversion adoptive. However, the rule involved specifically provides for the case of the judicially
adopted child. It is an elementary rule of construction that when the language of the law is clear and
unequivocal, the law must be taken to mean exactly what it says.

The fifth error assigned is: têñ.£îhqwâ£

The Honorable Court of Appeals gravely erred in law in ruling with respect to the Carsuche
property (Lot No. 2) that the deed of sale executed in 1940 in favor of the petitioner Doroteo
Banawa and his wife Juliana Mendoza did not impair the pretended sale to Maria Mirano.

The Court of Appeals found that there was a sale of the Carsuche property in 1935 in favor of Maria Mirano
and that such sale was embodied in a public instrument. However, in 1940 the same land was sold to the
petitioners. The sale was duly registered. The petitioners immediately entered into the possession of the
land as owners.

The claim of the petitioners that they have acquired by acquisitive prescription the Carsuche property (Lot
No. 2) is meritorious.

Section 40 of the Code of Civil Procedure provides: "Period of prescription as to real estate — An action for
recovery of title to, or possession of, real property, or an interest therein, can only be brought within ten
years after the cause of action accrues."
That the aforesaid Section 40 governs the instant case is clear from Article 1116 of the New Civil Code
which provides that "prescriptions already running before the effectivity of the New Civil Code, shall be
governed by the laws previously in force." The prescriptive period commenced to run since 1940, the date
the sale in favor of the Banawas was registered with the Register of Deeds of Batangas. Hence the Code of
Civil Procedure governs.

The instant case, not having been filed within ten (10) years from the time the cause of action accrued in
1940, prescribed under Section 40 of the Code of Civil Procedure in 1950 because the same was filed only
in 1957, seventeen (17) years later.

The possession of the Banawas over the Carsuche property ripened into full ownership in 1950, ten (10)
years after 1940, when the possession of the petitioner-spouses which was actual, open, public and
continuous, under a claims of title exclusive of any other right and adverse to all other claim commenced.
(Sec. 41, Code of Civil Procedure). The sale in favor of the Banawas was registered in 1940 with the
Register of Deeds of Batangas. The actual and adverse possession of the petitioner-spouses was continued
by their present successors.

The alleged bad faith of the petitioners in that they knew that the land was previously sold to Maria Mirano is
of no consequence because Section 41 of the Code of Civil Procedure provides that there is prescription "in
whatever way such occupancy may have commenced." As held in one case "... guilty knowledge is of no
moment for under the law title by prescription may be acquired in whatever way possession may have been
commenced or continued and so long as the possessor had possessed the land openly, publicly,
continuously and under a claim of title for a period of over ten years." 19

The trial court found that the two parcels of land in question with a combined area of a little less than ten
(10) hectares had an average annual net yield of P 500.00. A total amount of P 4,500.00 as actual damages
was awarded in as much as Maria Mirano had been dead for nine (9) years when the decision of the trial
court was rendered. An adjustment should be made in view of the finding of this Court that the Carsuche
property, Lot 2, belongs to the petitioners.

The Iba property, Lot 1, is about 45% of the combined area of the two lands in question. Forty-five percent
(45 %) of the annual net income of P500.00 is equivalent to P225.00. Maria Mirano has been dead for about
thirty-one (31) years now. During all this period, the petitioners have been in possession of the Iba property
and receiving the products thereof. They should pay as actual damages the total amount of P6,975.00
representing the net income for the period of thirty-one (31) years on the basis of P225.00 a year.

The respondents are also entitled to attorney's fees in the amount of P1,000.00.

WHEREFORE, the decision of the Court of Appeals is hereby affirmed as to the Iba property (Lot No. 1) but
reversed as to the Carsuche property (Lot No. 2) which was acquired by the spouses Doroteo Banawa and
Juliana Mendoza who could validly donate the said property to Casiano Amponin and Gliceria Abrenica The
petitioners are ordered to pay the private respondents the total amount of Six Thousand Nine Hundred
Seventy-Five Pesos (P6,975.00) as actual damages and the amount of One Thousand Pesos (P1,000.00)
as attorney's fees, without pronouncement as to costs.

SO ORDERED.

Guerrero, De Castro and Melencio-Herrera, JJ., concur. 1äwphï1.ñët

Teehankee (Chairman), concurs in the result.

Separate Opinions
MAKASIAR, J., concurring and dissenting:

I dissent, re the Iba parcel; because there was no valid donation of the land or of the purchase money. In
addition to the views expressed by the learned counsel for the petitioners, to which I subscribe, I wish to
stress the following:

1. The money with which to buy the property was not donated to Maria by the spouses Juliana Mendoza and
Doroteo Banawa. Said spouses would not donate the large amount of P4,080.00 (although the deed states
the amount as P2,000.00) to Maria Mirano who was merely tutored to learn the 3 R's — reading, writing and
arithmetic — at the expense of said spouses. While it is true that they supported her, gave her money,
clothes and even jewelry, they did not send her to school, much less give her a college education. It is
unthinkable that the said spouses would give her P4,080.00 when they could not even give her a primary
education which would cost very much less (from 1911 to 1915). The jewelry they could have given to her
could not be better than trinkets, the cost of which was negligible but could be a fond possession of a poor,
impressionable child in the rural area like Maria;

2. No cash actually passed to Maria from the spouses The amount of P4,080.00 allegedly donated by the
spouses to Maria represented the various loans in the amounts of P1,200.00, P1,800.00 and P1,080.00
previously extended to Placido Punzalan who, as vendor, sold the Iba parcel in payment of his debt. While
the purchase price was P3,700.00, the purchase price was made to appear in the document as P2,000.00 to
save on notarial fees;

3. Up to the time of her death on July 31, 1949 at the age of 48, Maria was still living with the spouses who
reared her. This fact shows that Maria was still being supported by the spouses Doroteo Banawa and
Juliana Mendoza;

4. If there was a valid donation of the money to pay for the Iba sugar land in Taal in 1921, which consists of
4.42 hectares, it would seem that Maria would have sufficient funds derived from the produce of such a big
parcel with which to purchase for herself the Carsuche parcel for the amount of P3,700.00 or P4,000.00. But
the fact of the matter is that it was still the spouses Juliana Mendoza and Doroteo Banawa who paid for the
Carsuche property, only that the sale was allegedly made in favor of Maria, whom they did not legally adopt,
to insure the survival of Maria long after they would have been dead as they were then already old. Again,
this goes against the grain of human nature; because no such deep concern was exhibited by the spouses
in favor of their legally adopted daughter Gliceria Abrenica; and

5. The spouses legally adopted petitioner Gliceria Abrenica, wife of co-petitioner Casiano Amponin, but
never legally adopted Maria, niece of petitioner Juliana Mendoza. If the said spouses wanted to favor their
niece Maria for helping in their business, they could have easily adopted her legally and thereby make her
their legal heir, like petitioner Gliceria Abrenica.

I concur re the Carsuche parcel.

There was no valid sale in favor of Maria Mirano of said lot because:

1. While a photostat copy of the earlier deed of sale of 1921 was secured from the Division of Archives of
the Bureau of Libraries and submitted in evidence as Exhibit A; no copy of the later alleged deed of sale in
1935 was presented in evidence concerning the Carsuche parcel. If there was such a 1935 deed of sale (14
years after the 1921 deed), a certified true copy thereof could be more easily secured from the Division of
Archives of the Bureau of Libraries, as it was a later document (1935) than the 1921 deed of sale, which is
available. The alleged sale in December, 1935 was allegedly notarized by Atty. Vicente Ilagan. It is strange
that Atty. Aro who allegedly prepared the deed of sale, was not the one who notarized the same;

2. In 1935, Maria was already 23 years old. Being a very important document purportedly evidencing her title
to the Carsuche sugar land also in Taal, of 5.4093 hectares, she should have retained the original or a copy
of the alleged deed of sale, specially considering that the sum of P4,000.00 was allegedly paid for the same;

3. The cancelled tax declaration of the previous owner the vendor - or the new tax declaration in the name of
the buyer, usually states the reason for such cancellation, like a deed of sale with its date and may include
the name of the notary public and place of execution of the document. There is no intimation of such a
statement or entry in the cancelled tax declaration of the vendor or in the new tax declaration in the name of
Maria Mirano; and

4. There is no discussion of any exhaustive examination of the other four possible sources of the copies of
the alleged 1935 deed of sale — from the vendor, the notary public, the office of the clerk of court, and as
above-stated, the alleged vendee herself.

Separate Opinions

MAKASIAR, J., concurring and dissenting:

I dissent, re the Iba parcel; because there was no valid donation of the land or of the purchase money. In
addition to the views expressed by the learned counsel for the petitioners, to which I subscribe, I wish to
stress the following:

1. The money with which to buy the property was not donated to Maria by the spouses Juliana Mendoza and
Doroteo Banawa. Said spouses would not donate the large amount of P4,080.00 (although the deed states
the amount as P2,000.00) to Maria Mirano who was merely tutored to learn the 3 R's — reading, writing and
arithmetic — at the expense of said spouses. While it is true that they supported her, gave her money,
clothes and even jewelry, they did not send her to school, much less give her a college education. It is
unthinkable that the said spouses would give her P4,080.00 when they could not even give her a primary
education which would cost very much less (from 1911 to 1915). The jewelry they could have given to her
could not be better than trinkets, the cost of which was negligible but could be a fond possession of a poor,
impressionable child in the rural area like Maria;

2. No cash actually passed to Maria from the spouses The amount of P4,080.00 allegedly donated by the
spouses to Maria represented the various loans in the amounts of P1,200.00, P1,800.00 and P1,080.00
previously extended to Placido Punzalan who, as vendor, sold the Iba parcel in payment of his debt. While
the purchase price was P3,700.00, the purchase price was made to appear in the document as P2,000.00 to
save on notarial fees;

3. Up to the time of her death on July 31, 1949 at the age of 48, Maria was still living with the spouses who
reared her. This fact shows that Maria was still being supported by the spouses Doroteo Banawa and
Juliana Mendoza;

4. If there was a valid donation of the money to pay for the Iba sugar land in Taal in 1921, which consists of
4.42 hectares, it would seem that Maria would have sufficient funds derived from the produce of such a big
parcel with which to purchase for herself the Carsuche parcel for the amount of P3,700.00 or P4,000.00. But
the fact of the matter is that it was still the spouses Juliana Mendoza and Doroteo Banawa who paid for the
Carsuche property, only that the sale was allegedly made in favor of Maria, whom they did not legally adopt,
to insure the survival of Maria long after they would have been dead as they were then already old. Again,
this goes against the grain of human nature; because no such deep concern was exhibited by the spouses
in favor of their legally adopted daughter Gliceria Abrenica; and

5. The spouses legally adopted petitioner Gliceria Abrenica, wife of co-petitioner Casiano Amponin, but
never legally adopted Maria, niece of petitioner Juliana Mendoza. If the said spouses wanted to favor their
niece Maria for helping in their business, they could have easily adopted her legally and thereby make her
their legal heir, like petitioner Gliceria Abrenica.

I concur re the Carsuche parcel.

There was no valid sale in favor of Maria Mirano of said lot because:

1. While a photostat copy of the earlier deed of sale of 1921 was secured from the Division of Archives of
the Bureau of Libraries and submitted in evidence as Exhibit A; no copy of the later alleged deed of sale in
1935 was presented in evidence concerning the Carsuche parcel. If there was such a 1935 deed of sale (14
years after the 1921 deed), a certified true copy thereof could be more easily secured from the Division of
Archives of the Bureau of Libraries, as it was a later document (1935) than the 1921 deed of sale, which is
available. The alleged sale in December, 1935 was allegedly notarized by Atty. Vicente Ilagan. It is strange
that Atty. Aro who allegedly prepared the deed of sale, was not the one who notarized the same;

2. In 1935, Maria was already 23 years old. Being a very important document purportedly evidencing her title
to the Carsuche sugar land also in Taal, of 5.4093 hectares, she should have retained the original or a copy
of the alleged deed of sale, specially considering that the sum of P4,000.00 was allegedly paid for the same;

3. The cancelled tax declaration of the previous owner the vendor - or the new tax declaration in the name of
the buyer, usually states the reason for such cancellation, like a deed of sale with its date and may include
the name of the notary public and place of execution of the document. There is no intimation of such a
statement or entry in the cancelled tax declaration of the vendor or in the new tax declaration in the name of
Maria Mirano; and

4. There is no discussion of any exhaustive examination of the other four possible sources of the copies of
the alleged 1935 deed of sale - from the vendor, the notary public, the office of the clerk of court, and as
above-stated, the alleged vendee herself.

Footnotes têñ.£îhqwâ£

1 Annex "A", Brief for the Petitioners, p. 4, Rollo, p. 208. Decision of Court of Appeals written by
Justice Fernando Hernandez and concurred in by Justice Jose S. Rodriguez and Justice
Antonio Canizares.

2 Record on Appeal. pp. 57-58, Rollo, p. 148.

3 Brief for the Petitioners, p. 3, Rollo, p. 208.

4 Ibid., p. 5.

5 CA Decision, Annex "A", Brief for the Petitioners, pp. 72-78, Rollo, p. 208.

6 Brief for Petitioners, pp. 1-2 Rollo, p. 208.

7 Ibid., p. 3.

8 March 27, 1974, 56 SCRA 167, 171-172.

9 Brief for Respondents, pp. 15-16, Rollo, p. 224.

10 Decision of Court of Appeals, pp. 13-15; Annex "A" of Petition for Certiorari, Rollo, pp. 45-82,
and Record on Appeal, pp. 37-39, Rollo, p. 148.

11 Tsn. pp. 74-75, August 21, 1957; Decision of CA, pp. 28-29; Annex "A", Petition for Certiorari,
Rollo, p. 6.

12 Folder of Original Exhibits, pp. 1-2.

 13 Brief for the Petitioners, pp. 17-18, Rollo, p. 208.

14 Tsn. p. 55, September 25, 1957.

15 Tsn. pp. 46-47, December 17, 1957.

16 Ibid.

17 Article 1433, New Civil Code.

18 Rollo, et al. vs. Claro and Baquiring, 91 Phil. 250.

19 Arboso vs. Andrade, 87 Phil. 782.

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