You are on page 1of 6


[G.R. No. L-67888. October 8, 1985.]
IMELDA ONG, ET AL., petitioners, vs. ALFREDO ONG, ET AL., respondents.
Faustino Y. Bautista and Fernando M. Mangubat for private respondent.

This is a petition for review on certiorari of the decision, dated June 20, 1984, of the Intermediate Appellate Court, in AC-G.R.
No. CV-01748, affirming the judgment of the Regional Trial Court of Makati, Metro Manila. Petitioner Imelda Ong assails the
interpretation given by respondent Appellate Court to the questioned Quitclaim Deed.
Records show that on February 25, 1976 Imelda Ong, for and in consideration of One (P1.00) Peso and other valuable
considerations, executed in favor of private respondent Sandra Maruzzo, then a minor, a Quitclaim Deed whereby she
transferred, released, assigned and forever quitclaimed to Sandra Maruzzo, her heirs and assigns, all her rights, title, interest
and participation in the ONE-HALF (1/2) undivided portion of the parcel of land, particularly described as follows:
"A parcel of land (Lot 10-B of the subdivision plan (LRC) Psd-157841, being a portion of Lot 10, Block 18, Psd-13288,
LRC (GLRC) Record No. 2029, situated in the Municipality of Makati, Province of Rizal, Island of Luzon . . . containing an
area of ONE HUNDRED AND TWENTY FIVE (125) SQUARE METERS, more or less."

On November 19, 1980, Imelda Ong revoked the aforesaid Deed of Quitclaim and, thereafter, on January 20, 1982 donated the
whole property described above to her son, Rex Ong Jimenez.
On June 20, 1983, Sandra Maruzzo, through her guardian ad litem Alfredo Ong, filed with the Regional Trial Court of Makati,
Metro Manila an action against petitioners, for the recovery of ownership/possession and nullification of the Deed of Donation
over the portion belonging to her and for Accounting.
In their responsive pleading, petitioners claimed that the Quitclaim Deed is null and void inasmuch as it is equivalent to a Deed
of Donation, acceptance of which by the donee is necessary to give it validity. Further, it is averred that the donee, Sandra
Maruzzo, being a minor, had no legal personality and therefore incapable of accepting the donation.

Upon admission of the documents involved, the parties filed their responsive memoranda and submitted the case for decision.
On December 12, 1983, the trial court rendered judgment in favor of respondent Maruzzo and held that the Quitclaim Deed is
equivalent to a Deed of Sale and, hence, there was a valid conveyance in favor of the latter.
Petitioners appealed to the respondent Intermediate Appellate Court. They reiterated their argument below and, in addition,
contended that the One (P1.00) Peso consideration is not a consideration at all to sustain the ruling that the Deed of Quitclaim
is equivalent to a sale.
On June 20, 1984, respondent Intermediate Appellate Court promulgated its Decision affirming the appealed judgment and
held that the Quitclaim Deed is a conveyance of property with a valid cause or consideration; that the consideration is the One
(P1.00) Peso which is clearly stated in the deed itself; that the apparent inadequacy is of no moment since it is the usual
practice in deeds of conveyance to place a nominal amount although there is a more valuable consideration given.
Not satisfied with the decision of the respondent Intermediate Appellate Court, petitioners came to Us questioning the
interpretation given by the former to this particular document.

On March 15, 1985, respondent Sandra Maruzzo, through her guardian ad litem Alfredo Ong, filed an Omnibus Motion
informing this Court that she has reached the age of majority as evidenced by her Birth Certificate and she prays that she be
substituted as private respondent in place of her guardian ad litem Alfredo Ong. On April 15, 1985, the Court issued a
resolution granting the same.
A careful perusal of the subject deed reveals that the conveyance of the one-half (1/2) undivided portion of the above-
described property was for and in consideration of the One (P1.00) Peso and the other valuable considerations (italics
supplied) paid by private respondent Sandra Maruzzo, through her representative, Alfredo Ong, to petitioner Imelda Ong.
Stated differently, the cause or consideration is not the One (P1.00) Peso alone but also the other valuable considerations. As
aptly stated by the Appellate Court
". . . although the cause is not stated in the contract it is presumed that it is existing unless the debtor proves the
contrary (Article 1354 of the Civil Code). One of the disputable presumptions is that there is a sufficient cause of the
contract (Section 5, (r), Rule 131, Rules of Court). It is a legal presumption of sufficient cause or consideration
supporting a contract even if such cause is not stated therein (Article 1354, New Civil Code of the Philippines.) This
presumption cannot be overcome by a simple assertion of lack of consideration especially when the contract itself
states that consideration was given, and the same has been reduced into a public instrument with all due formalities
and solemnities. To overcome the presumption of consideration the alleged lack of consideration must be shown by
preponderance of evidence in a proper action. (Samanilla vs. Cajucom, et al., 107 Phil. 432).
The execution of a deed purporting to convey ownership of a realty is in itself prima facie evidence of the existence of a
valuable consideration, the party alleging lack of consideration has the burden of proving such allegation. (Caballero, et
al. vs. Caballero, et al., (CA), 45 O.G. 2536).
Moreover, even granting that the Quitclaim deed in question is a donation, Article 741 of the Civil Code provides that
the requirement of the acceptance of the donation in favor of minor by parents of legal representatives applies only to
onerous and conditional donations where the donation may have to assume certain charges or burdens (Article 726,
Civil Code). The acceptance by a legal guardian of a simple or pure donation does not seem to be necessary (Perez vs.
Calingo, CA-40 O.G. 53). Thus, Supreme Court ruled in Kapunan vs. Casilan and Court of Appeals, 109 Phil. 889) that the
donation to an incapacitated donee does not need the acceptance by the lawful representative if said donation does not
contain any condition. In simple and pure donation, the formal acceptance is not important for the donor requires no
right to be protected and the donee neither undertakes to do anything nor assumes any obligation. The Quitclaim now
in question does not impose any condition."

The above pronouncement of respondent Appellate Court finds support in the ruling of this Court in Morales Development Co.,
Inc. vs. CA, 27 SCRA 484, which states that "the major premise thereof is based upon the fact that the consideration stated in
the deeds of sale in favor of Reyes and the Abellas is P1.00. It is not unusual, however, in deeds of conveyance adhering to the
Anglo-Saxon practice of stating that the consideration given is the sum of P1.00, although the actual consideration may have
been much more. Moreover, assuming that said consideration of P1.00 is suspicious, this circumstance, alone, does not
necessarily justify the inference that Reyes and the Abellas were not purchasers in good faith and for value. Neither does this
inference warrant the conclusion that the sales were null and void ab initio. Indeed, bad faith and inadequacy of the monetary

consideration do not render a conveyance inexistent, for the assignor's liberality may be sufficient cause for a valid contract
(Article 1350, Civil Code), whereas fraud or bad faith may render either rescissible or voidable, although valid until annulled, a
contract concerning an object certain entered into with a cause and with the consent of the contracting parties, as in the case
at bar."
WHEREFORE, the appealed decision of the Intermediate Appellate Court should be, as it is hereby AFFIRMED, with costs
against herein petitioners.

Teehankee (Chairman), Melencio-Herrera, Plana, De la Fuente and Patajo, JJ., concur.
Gutierrez, Jr., J., concurs in the result.
(Ong v. Ong, G.R. No. L-67888, [October 8, 1985], 223 PHIL 351-357)

[G.R. No. 14823. December 9, 1919.]
HILARIA AGUILAR, plaintiff-appellant, vs. JUAN RUBIATO, defendant-appellant, and MANUEL GONZALEZ
VILA, defendant-appellee.
Francisco A. Delgado for plaintiff and appellant.
Abaya & Pamatmat for defendant and appellant.
No appearance for appellee.
1. CONTRACTS; NULLITY; FRAUD; INADEQUACY OF PRICE. Where the inadequacy of the price in an agreement
is so great that the mind revolts at it and is such as a reasonable man would neither directly nor indirectly be likely to
consent to, a strong reason exists for annuling a contract.
2. ID.; ID.; ID.; ID. R, the owner of land valued at P26,000, was induced through the connivance of two or three
other men to sign the second page of a power of attorney in favor of one of them, G, which purported to authorize G to sell
the property with right of repurchase for a sum not to exceed P1,000. G sold the property to A for P800 under a pacto de
retro. R having failed to pay the rent, A endeavors to obtain possession of the land.Held: That the so-called power of
attorney was a sham document, and that R is only liable for the loan which he received.
3. ID.; USURY; INTEREST. As interest at the rate of 60 per cent per annum is usurious, and as the loan thus fails
to name a lawful rate of interest, on and after the date when the Usury Law became effective, a defendant would be liable
for the legal rate of interest, which is 6 per cent per annum.
4. ID.; ID.; ID. Under similar circumstances, a defendant would only be liable for interest at the legal rate of 6
per cent per annum for a contract made prior to the enactment of a Usury Law. (See art. 1255 of the Civil Code.)
demand in the complaint is no part of the statement of the cause of action, and does not give it character. The facts alleged
do this, and the plaintiff is entitled to so much relief as they warrant." (Sutherland on Code Pleading, Vol. I, sec. 186; Code
of Civil Procedure, sec. 126.)


As certainly as may be ascertained, the facts of record in this case are believed to be the following:
Juan Rubiato is a resident of the municipality of Nagcarlan, Province of Laguna, of somewhat ordinary intelligence
and astuteness. Early in the year 1915, he was the owner of various parcels of land having a potential value of
approximately P26,000. Rubiato was desirous of obtaining a loan of not to exceed P1,000. Being in this state of mind, two
men, Manuel Gonzalez Vila a procurador judicial and one Gregorio Azucena, and possibly another, one Marto Encarnacion,
came to the house of Rubiato and there induced him to sign the second page of a power of attorney in favor of Manuel
Gonzalez Vila. This power of attorney, introduced in evidence as Exhibit A, reads as follows:
"To all whom it may concern:
"I, Juan Rubiato e Isles, of age, married, a resident of the barrio of Rizal, municipality of Nagcarlan, Province of
Laguna, Philippine Islands, do hereby freely and voluntarily set forth the following:
"First. That I own and possess the full and absolute dominion over eight parcels of land (planted with about
two thousand five hundred coconut trees) situated in the aforesaid barrio, municipality of Nagcarlan, Province of
Laguna, P. I.; that the description and boundaries of same are duly described in the possessory title (dated the 15th day
of January, 1896) (titulo posesorio) issued to me by the former Spanish sovereignty; that same is inscribed in the
register of property of said province under numbers 141, 144, 146, 148, 150, 152, 154 and 156; that these facts are
proven by the certificate, written on the legal official papers numbered 0.153.826, 0.460.498, 0.455.683 and 0.460.459
and duly authorized by registrar, Sr. Antonio Roura, . . .
"Second. That being unable, on account of illness, to go in person to Manila, I hereby declare that I grant to Sr.
Manuel Gonzalez Vila, a resident of the municipality of San Pablo, Province of Laguna, P. I., any power whatever
required by law to secure in said city a loan not exceeding one thousand pesos (P1,000), Philippine currency; that he
shall secure same in my name and representation; that he may secure same either under the rate of interest and
conditions considered most convenient and beneficial for my interests, or under pacto de retro; that furthermore he has
ample power to execute, sign and ratify, as though he were myself, any writing necessary for the mortgage of my land
described in the aforementioned document; and that he holds this special power of attorney over said lands to the end
that same may be used as a guaranty of the loan to be secured." . . .

By reason of the power thus given, Manuel Gonzalez Vila on April 29, 1915, formulated the document introduced
in evidence as Exhibit C, by which the lands of Rubiato were sold to Hilaria Aguilar of Manila, for the sum of P800, with
right of repurchase within one year, Rubiato to remain in possession of the land as lessee and to pay P120 every three
months as lease rent. Hilaria Aguilar never saw the lands in question and did not know, until after she had consulted her
attorney, exactly what her rights were. Manuel Gonzalez Vila received from Hilaria Aguilar the P800 mentioned in Exhibit
C as the selling price of the land. Whether this money was then passed on to Juan Rubiato is uncertain, although it is
undeniable that Hilaria Aguilar has never been paid the money she advanced.
The one year mentioned in the pacto de retro having expired without Hilaria Aguilar having received the principal
nor any part of the lease rent, she began action against Juan Rubiato and Manuel Gonzalez Vila to consolidate the eight

parcels of land in her name. After due trial, the trial judge, the Hon. Manuel Camus, rendered a decision in which he recited
the facts somewhat, although not exactly, as hereinbefore set forth. The court found that the power of attorney only
authorized Manuel Gonzalez Vila to obtain a loan subject to a mortgage, and not to sell the property. The judgment handed
down was to the effect that the plaintiff Hilaria Aguilar recover from the defendant Juan Rubiato the sum of P800 with
interest at the rate of 60 per cent per annum from April 29, 1915 until May 1, 1916, and with interest at the rate of 12 per
cent per annum from May 1, 1916, until the payment of the principal, with the costs against the defendant. Both parties
The points raised by the plaintiff-appellant going as they do to the facts and these being as hereinbefore stated, no
lengthy discussion of plaintiff's five assignments of error need be indulged in. The issue is not precisely relative to an
interpretation of the power of attorney. The court is under no necessity of seizing on inexact language in order to hold that
the document authorized a mortgage and not a sale. The so-called power of attorney might indeed be construed as
authorizing Vila to sell the property of Rubiato. And it might indeed be construed under a conception similar to that of the
trial court's as a loan guaranteed by a mortgage. But the controlling fact is, that the power of attorney was in reality no
power of attorney but a sham document.
In addition to the evidence, there is one very cogent reason which impels us to the conclusion that Rubiato is only
responsible to the plaintiff for a loan. It is that the inadequacy of the price which Vila obtained for the eight parcels of
land belonging to Rubiato is so great that the mind revolts at it. It is an agreement which a reasonable man would neither
directly nor indirectly be likely to enter into or to consent to. To hold that the power of attorney signed by Rubiato
authorized Vila to enter into the instant contract of sale would be equivalent to holding, if we may be permitted to use the
language of Lord Hardwicke, that "a man in his senses and not under delusion" would dispose of lands worth P26,000 for
P1,000, and would pay interest thereon at the rate of 60 per cent per annum. (See 6 R. C. L., 679, 841.)
The members of this t after most particular and cautious consideration, having in view all the facts and all the
natural tendencies of mankind, consider that Rubiato is only responsible to the plaintiff for the loan of P800.
The points advanced by defendant-appellant likewise necessitate only brief consideration. While entertaining
some doubt as to the justice of requiring Rubiato to pay back the amount of P800, we do not feel authorized in disturbing
this finding of the trial court. It may well be that Vila and his partners, acting as middlemen, fabricated the document
which Rubiato signed, secured the money from Hilaria Aguilar, and then pocketed the same. Yet as minor details
somewhat corroborative of the result reached by the trial court, are the undeniable facts that Rubiato admitted his desire
to obtain a loan, that Hilaria Aguilar made such a loan, and that while the testimony of Vila is not overly truthful, in this
one respect we do have his forceful statement that the money was paid over to Rubiato. That payment of the sum of P800
was not explicitly prayed for in the complaint, does not deprive the court of power to render judgment for this amount,
because it is a rule of good pleading that "the demand in the complaint is no part of the statement of the cause of action,
and does not give it character. The facts alleged do this, and the plaintiff is entitled to so much relief as they warrant."
(Sutherland on Code Pleading, Vol. I, sec. 186; Code of Civil Procedure, sec. 126.)
The only remaining question which merits resolution, on which the plaintiff and defendants flatly disagree,
relates to the interest which should be allowed. The trial court, it will be remembered, permitted the plaintiff to recover

interest at the rate of 60 per cent per annum from April 29, 1915, when the pacto de retro was formulated, until May 1,
1916, the date when the Usury Law, Act No. 2655, went into effect, and interest at the rate of 12 per cent per annum after
that date. It is, of course, true, as previously decided by this court in United States vs. Constantino Tan Quingco Chua (
[1919], 39 Phil., 552), that usury laws, such as that in force in the Philippines, are to be construed prospectively and not
retrospectively. As stated in the decision just cited, "The reason is, that if the contract is legal at its inception, it cannot be
rendered illegal by any subsequent legislation, for this would be tantamount to the impairment of the obligation of the
contract." As we have held that the defendant is under obligation to the plaintiff for a mere loan, as this loan fails to name a
lawful rate of interest, and as interest at the rate of 60 per cent per annum is unquestionably exorbitant and usurious
under the Usury Law, on and after the date when this law became effective, the defendant would be liable for the legal rate
of interest, which is 6 per cent per annum. We would even go further and hold that he-would be liable only for such
interest prior to the enactment of the Usury Law. This we can do under the sanction of article 1255 of the Civil Code which
condemns agreements contrary to morals and public policy.

Judgment is affirmed, with the sole modification that the plaintiff shall only recover interest at the rate of 6 per
cent per annum on the sum of P800 from April 29, 1915 until paid, without special finding as to costs in this instance. So
Arellano, C. J., Torres, Araullo, Street and Avancea, JJ., concur.


(Aguilar v. Rubiato, G.R. No. 14823, [December 9, 1919], 40 PHIL 570-575)