BOUGH and BOUGH, plaintiffs-appellants,vs CANTIVEROS and HANOPOL, defendantsappellants. G.R. No.

13300 FACTS: Matilde Cantiveros, owner of various parcels of realty of the value of thirty thousand pesos or more in Carigara, Leyte. On December 24, 1912, Matilde Cantiveros and her husband Jose Vasquez, signed a marital contract of separation.

Lived with Cantiveros is Basilia Hanopol, a cousin, who was married to Gustavus Bough. Bough, brought a story to Cantiveros that her husband Vasquez was in town and might contest the contract for the separation of the conjugal property. Cantiveros was induced to sign a fictitious contract of sale of all her property which consist of 63 parcels of land to Basilia Bough. This document was prepared in due from and acknowledged before a notary public, the amount of the consideration, P10K instead of P30K actual value. In order to reassure Cantiveros that they would not take advantage of the fictitious sale, Gustavus Bough and Basilia Bough prepared and signed another document, which is a donation by them to Cantiveros of all the property to be effective in case of the death of themselves and their children before the death of Cantiveros. She has remained in possession of the property. Complaint of plaintiffs Basilia Bough and Gustavus Bough who sought to have themselves put in possession of the property covered by the deed of sale quoted in the complaint, and to require the defendant Matilde Cantiveros to pay the plaintiffs the sum of five hundreds pesos by way of damages, and to pay the costs. Cantiveros answered with a general denial and a special defense, not sworn to, in which she asked that judgment be rendered declaring the contract of sale theretofore made between herself and Basilia Bough null. The plaintiffs, thereupon, denied under oath the genuineness and due execution of the so-called donation intervivos set forth in the answer. Presbitera Hanopol was permitted to intervene as a defendant. Honorable W. E. McMahon, judge of first instance, in favor of the defendants, declaring the deed of sale, Exhibit A, fictitious, null, and without effect, and absolving the defendants from the complaint, with costs against the plaintiffs.

ISSUES :

1. WON, The lower Court erred in permitting the defendants to present evidence, over the
objections of the plaintiff, tending to impugn the genuineness and due execution of the document, Exhibit A, and in admitting them to show the circumstances under which it was executed.

SC : We hold that although the defendants did not deny the genuineness and due execution of the contract of sale of December 9, 1913, under oath, yet the defendants could properly set up the defenses of fraud and want of consideration. 2.WON, the lower Court erred in finding that the plaintiff Gustavus Bough, having prepared a contract of separation between the defendant Matilde Cantiveros and her husband, Jose Vasquez, sought to cause her to believe that she exposed herself to a suit by her husband regarding her property, notwithstanding the contract of separation, and for that reason and for the purpose of shielding herself from the consequences of the apprehended suit, that she and her mother executed the document Exhibit A. SC : While thus as the law well says public instruments are evidence of the fact which gave rise to their execution and are to be considered as containing all the terms of the agreement, yet, if the validity of the agreement is the issue, parole evidence may be introduced to establish illegality or fraud. We hold that parole evidence was properly admitted to show the illegality of the contract of sale introduced as Exhibit A. 3.WON, the defendant, having accepted the donation expressed in the instrument Exhibit 1, is now estopped from denying the consideration set forth therein. A sufficient answer is, that it having been established that Exhibit A is invalid, such an instrument cannot be made the basis of an estoppel. SC : We hold that the so-called donation in favor of Matilde Cantiveros did not operate to create an estoppel. 4. WON, there is an effect of the illegality of the instant contract. SC : In this instance, the grantor, reposing faith in the integrity of the grantee, and relying on a suggested occurrence, which did not in fact take place, was made the dupe of the grantee, and led into an agreement against public policy. The party asking to be relieved from the agreement which she was induced to enter into by means of fraud, was thus in delicto, but not in pari delicto with the other party. The deed was procured by misrepresentation and fraud sufficient to vitiate the transaction. The rights of creditors are not affected. We feel that justice will be done if we place the grantor in the position in which she was before these transactions were entered into. It is further well settled, that a party to an illegal contract cannot come into a court of law and ask to have his illegal objects carried out. The rule is expressed in the maxims: Ex dolo malo non oritur actio, and In pari delicto potior est conditio defendentis. The law will not aid either party to an illegal agreement; it leaves the parties where it finds them. (Article 1306, Civil Code; Perez vs. Herranz [1907], 7 Phil., 693.) Where, however, the parties to an illegal contract are not equally guilty, and where public policy is considered as advanced by allowing the more excusable of the two to sue for relief against the transaction, relief is given to him. HELD : We resolve each assignment of error against the appellants, and having done so, affirm the judgment of the trial court, with costs of this instance against the appellants. So ordered.