Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-12707

August 10, 1918

MRS. HENRY E. HARDING, and her husband, plaintiffs-appellees,

vs.
COMMERCIAL UNION ASSURANCE COMPANY, defendant-appellant.
Lawrence & Ross for appellant.
Gibbs, McDonough & Johnson for appellees.
FISHER, J.:
This was an action by plaintiffs to recover from defendant the sum of P3,000 and interest, alleged to be due under
the terms of a policy of insurance. The trial court gave plaintiffs judgment for the amount demanded, with interest
and costs, and from that decision the defendant appeals.
The court below stated the issues made by the pleadings in this case, and its finding of fact, as follows:
It is alleged by plaintiffs and admitted by defendant that plaintiffs are husband and wife and residents of the
city of Manila; that the defendant is a foreign corporation organized and existing under and by virtue of the
laws of Great Britain and duly registered in the Philippine Islands, and Smith, Bell & Co. (limited), a
corporation organized and existing under the laws of the Philippine Islands, with its principal domicile in the
city of Manila, is the agent in the Philippine Islands of said defendant.
The plaintiffs alleged that on February 16, 1916, the plaintiff Mrs. Henry E. Harding was the owner of a
Studebaker automobile, registered number 2063, in the city of Manila; that on said date; in consideration of
the payment to the defendant of the premium of P150, by said plaintiff, Mrs. Henry E. Harding, with the
consent of her husband, the defendant by its duly authorized agent, Smith, Bell & Company (limited), made
its policy of insurance in writing upon said automobile was set forth in said policy to be P3,000 that the value
of said automobile was set forth in said policy (Exhibit A) to be P3,000; that on March 24, 1916, said
automobile was totally destroyed by fire; that the loss thereby to plaintiffs was the sum of P3,000; that
thereafter, within the period mentioned in the said policy of insurance, the plaintiff, Mrs. Henry E. Harding,
furnished the defendant the proofs of her said loss and interest, and otherwise performed all the conditions
of said policy on her part, and that the defendant has not paid said loss nor any part thereof, although due
demand was made upon defendant therefor.
The defendant, by its answer, admitted the allegations of the residence and status of the parties and denied
all the other allegation of the said complaint, and for a separate and affirmative defense alleged (1) that on
February 17, 1916, at the city of Manila, P.I. the defendant upon request of plaintiff, Mrs. Henry E. Harding,
issued to the said plaintiff the policy of insurance on an automobile alleged by the said plaintiff to be her
property; that the said request for the issuance of said policy of insurance was made by means of a proposal
in writing signed and delivered by said plaintiff to the defendant, guaranteeing the truth of the statements
contained therein which said proposal is referred to in the said policy of insurance made a part thereof; (2)
that certain of the statements and representations contained in said proposal and warranted by said plaintiff
to be true, to wit: (a) the price paid by the proposer for the said automobile; (b) the value of said automobile
at the time of the execution and delivery of the said proposal and (c) the ownership of said automobile, were
false and known to be false by the said plaintiff at the time of signing and delivering the said proposal and
were made for the purpose of misleading and deceiving the defendant, and inducing the defendant, relying
upon the warranties, statements, and representations contained in the said proposal and believing the same
to be true, issued the said policy of insurance.
The defendant prays that judgment be entered declaring the said policy of insurance to be null and void, and
that plaintiffs take nothing by this action; and for such further relief as to the court may seem just and
equitable.
The evidence in this case shows that some time in the year 1913 Levy Hermanos, the Manila agents for the
Studebaker automobile, sold the automobile No. 2063 to John Canson for P3,200 (testimony of Mr. Diehl);
that under date of October 14, 1914, John Canson sold the said automobile to Henry Harding for the sum of
P1,500 (Exhibit 2); that under date of November 19, 1914, the said Henry Harding sold the said automobile
No. 2063 to J. Brannigan, of Los Baos, Province of Laguna, P.I., for the sum of P2,000 (Exhibit 3); that
under date of December 20, 1915, J. C. Graham of Los Baos, Province of Laguna, P.I., sold the said
automobile No. 2063 to Henry Harding of the city of Manila for the sum of P2,800 (Exhibit 4 and testimony of

J. C. Graham); that on or about January 1, 1916, the said Henry Harding gave the said automobile to his
wife; Mrs. Henry E. Harding, one of the plaintiffs, as a present; that said automobile was repaired and
repainted at the Luneta Garage at a cost of some P900 (testimony of Mr. Server); that while the said
automobile was at the Luneta Garage; the said Luneta Garage, acting as agent for Smith, Bell & Company,
(limited), solicited of the plaintiff Mrs. Harding the insurance of said automobile by the defendant Company
(testimony of Mrs. Henry Harding and Mr. Server); that a proposal was filled out by the said agent and
signed by the plaintiff Mrs. Henry E. Harding, and in said proposal under the heading "Price paid by
proposer," is the amount of "3,500" and under another heading "Present value" is the amount of "3,000"
(Exhibit 1).
The evidence tends to show that after the said proposal was made a representative of the Manila agent of
defendant went to the Luneta Garage and examined said automobile No. 2063 and Mr. Server, the General
Manager of the Luneta Garage, an experienced automobile mechanic, testified that at the time this
automobile was insured it was worth about P3,000, and the defendant, by and through its said agent Smith,
Bell & Company (limited), thereafter issued a policy of insurance upon proposal in which policy the said
automobile was described as of the "present value" of P3,000 and the said defendant charged the said
plaintiff Mrs. Henry E. Harding as premium on said policy the sum of P150, or 5 per cent of the then
estimated value of P3,000. (Exhibit A.)
The "Schedule" in said policy of insurance describes the automobile here in question, and provides in part of
follows:
"Now it is hereby agreed as follows:
"That during the period above set forth and during any period for which the company may agree to
renew this policy the company will subject to the exception and conditions contained herein or
endorsed hereon indemnify the insured against loss of or damage to any motor car described in the
schedule hereto (including accessories) by whatever cause such loss or damage may be
occasioned and will further indemnify the insured up to the value of the car or P3,000 whichever is
the greater against any claim at common law made by any person (not being a person in the said
motor car nor in the insured's service) for loss of life or for accidental bodily injury or damage to
property caused by the said motor car including law costs payable in connection with such claim
when incurred with the consent of the company."
The evidence further shows that on March 24, 1916, the said automobile was totally destroyed by fire, and
that the iron and steel portions of said automobile which did not burn were taken into the possession of the
defendant by and through its agent Smith, Bell & Company (limited), and sold by it for a small sum, which
had never been tendered to the plaintiff prior to the trial of this case, but in open court during the trial the
sum of P10 as the proceeds of such sale was tendered to plaintiff and refused.
Upon the facts so found, which we hold are supported by the evidence, the trial judge decided that there was no
proof of fraud on the part of plaintiff in her statement of the value of the automobile, or with respect to its ownership;
that she had an insurable interest therein; and that defendant, having agreed to the estimated value, P3,000, and
having insured the automobile for that amount, upon the basis of which the premium was paid, is bound by it and
must pay the loss in accordance with the stipulated insured value. The assignments of error made on behalf of
appellant put in issue the correctness of those conclusions of law, and some others of minor importance relating to
the exclusion of evidence. Disposing of the minor objections first, as we have reached the conclusion that the trial
court was right in holding that the defendant is bound by the estimated value of the automobile upon which policy
was issued, and that the plaintiff was not guilty of fraud in regard thereto, the exclusion of the testimony of the
witness Diehl is without importance. It merely tended to show the alleged actual value of the automobile, and in the
view we take of the case such evidence was irrelevant.
Appellant contends that Mrs. Harding was not the owner of the automobile at the time of the issuance of the policy,
and, therefore, had no insurable interest in it. The court below found that the automobile was given to plaintiff by her
husband shortly after the issuance of the policy here in question. Appellant does not dispute the correctness of this
finding, but contends that the gift was void, citing article 1334 of the Civil Code which provides that "All gifts between
spouses during the marriage shall be void. Moderate gifts which the spouses bestow on each other on festive days
of the family are not included in this rule."
We are of the opinion that this contention is without merit. In the case of Cook vs. McMicking 27 Phil. Rep., 10), this
court said:
It is claimed by the appellants that the so-called transfer from plaintiff's husband to her was completely void
under article 1458 of the Civil Code and that, therefore, the property still remains the property of Edward
Cook and subject to levy under execution against him.
In our opinion the position taken by appellants is untenable. They are not in a position to challenge the
validity of the transfer, if it may be called such. They bore absolutely no relation to the parties to the transfer
at the time it occurred and had no rights or interests inchoate, present, remote, or otherwise, in the property

in question at the time the transfer occurred. Although certain transfers from husband to wife or from wife to
husband are prohibited in the article referred to, such prohibition can be taken advantage of only by persons
who bear such a relation to the parties making the transfer or to the property itself that such transfer
interferes with their rights or interests. Unless such a relationship appears the transfer cannot be attacked.
Even assuming that defendant might have invoked article 1334 as a defense, the burden would be upon it to show
that the gift in question does not fall within the exception therein established. We cannot say, as a matter of law, that
the gift of an automobile by a husband to his wife is not a moderate one. Whether it is or is not would depend upon
the circumstances of the parties, as to which nothing is disclosed by the record.
Defendant contends that the statement regarding the cost of the automobile was a warranty, that the statement was
false, and that, therefore, the policy never attached to the risk. We are of the opinion that it has not been shown by
the evidence that the statement was false on the contrary we believe that it shows that the automobile had in fact
cost more than the amount mentioned. The court below found, and the evidence shows, that the automobile was
bought by plaintiff's husband a few weeks before the issuance of the policy in question for the sum of P2,800, and
that between that time and the issuance of the policy some P900 was spent upon it in repairs and repainting. The
witness Server, an expert automobile mechanic, testified that the automobile was practically as good as new at the
time the insurance was effected. The form of proposal upon which the policy was issued does not call for a
statement regarding the value of the automobile at the time of its acquisition by the applicant for the insurance, but
merely a statement of its cost. The amount stated was less than the actual outlay which the automobile represented
to Mr. Harding, including repairs, when the insurance policy was issued. It is true that the printed form calls for a
statement of the "price paid by the proposer," but we are of the opinion that it would be unfair to hold the policy void
simply because the outlay represented by the automobile was made by the plaintiff's husband and not by his wife, to
whom he had given the automobile. It cannot be assumed that defendant should not have issued the policy unless it
were strictly true that the price representing the cost of the machine had been paid by the insured and by no other
person that it would no event insure an automobile acquired by gift, inheritance, exchange, or any other title not
requiring the owner to make a specific cash outlay for its acquisition.
Furthermore, the court below found and the evidence shows, without dispute, that the proposal upon which the
policy in question was issued was made out by defendant's agent by whom the insurance was solicited, and that
appellee simply signed the same. It also appears that an examiner employed by the defendant made an inspection
of the automobile before the acceptance of the risk, and that the sum after this examination. The trial court found
that Mrs. Harding, in fixing the value of the automobile at P3,000, acted upon information given her by her husband
and by Mr. Server, the manager of the Luneta Garage. The Luneta Garage, it will be remembered, was the agent of
the defendant corporation in the solicitation of the insurance. Mrs. Harding did not state of her own knowledge that
the automobile originally cost P3,000, or that its value at the time of the insurance was P3,000. She merely repeated
the information which had been given her by her husband, and at the same time disclosed to defendant's agent the
source of her information. There is no evidence to sustain the contention that this communication was made in bad
faith. It appears that the statements in the proposal as to the price paid for the automobile and as to its value were
written by Mr. Quimby who solicited the insurance on behalf of defendant, in his capacity as an employee of the
Luneta Garage, and wrote out the proposal for Mrs. Harding to sign. Under these circumstances, we do not think
that the facts stated in the proposal can be held as a warranty of the insured, even if it should have been shown that
they were incorrect in the absence of proof of willful misstatement. Under such circumstance, the proposal is to be
regarded as the act of the insurer and not of the insured. This question was considered in the case of the Union
Insurance Company vs. Wilkinson (13 Wall., 222; 20 L. ed., 617), in which the Supreme Court of the United States
said:
This question has been decided differently by courts of the highest respectability in cases precisely
analogous to the present. It is not to be denied that the application logically considered, is the work of the
assured, and if left to himself or to such assistance as he might select, the person so selected would be his
agent, and he alone would be responsible. On the other hand, it is well-known, so well that no court would
be justified in shutting its eyes to it, that insurance companies organized under the laws of one State, and
having in that State their principal business office, send these agents all over the land, with directions to
solicit and procure applications for policies furnishing them with printed arguments in favor of the value and
necessity of life insurance, and of the special advantages of the corporation which the agent represents.
They pay these agents large commissions on the premiums thus obtained, and the policies are delivered at
their hands to the assured. The agents are stimulated by letters and instructions to activity in procuring
contracts, and the party who is in this manner induced to take out a policy, rarely sees or knows anything
about the company or its officers by whom it is issued, but looks to and relies upon the agent who has
persuaded him to effect insurance as the full and complete representative of the company, in all that is said
or done in making the contract. Has he not a right to so regard him? It is quite true that the reports of judicial
decisions are filled with the efforts of these companies, by their counsel, to establish the doctrine for the acts
of these agents to the simple receipt of the premium and delivery of the policy, the argument being that, as
to all other acts of the agent, he is the agent of the assured. This proposition is not without support in some
of the earlier decision on the subject; and, at a time when insurance companies waited for parties to come to
them to seek assurance, or to forward applications on their own motion, the doctrine had a reasonable
foundation to rest upon. But to apply such a doctrine, in its full force, to the system of selling policies through
agents, which we have described, would be a snare and a delusion, leading, as it has done in numerous
instances, to the grossest frauds, of which the insurance corporations receive the benefits, and the parties
supposing themselves insured are the victims. The tendency of the modern decisions in this country is

steadily in the opposite direction. The powers of the agent are, prima facie, co-extensive with the business
intrusted to his care, and will not be narrowed by limitations not communicated to the person with whom he
deals. (Bebee vs. Ins. Co., 25 Conn., 51; Lycoming Ins. Co. vs. Schoolenberger, 44 Pa., 259; Beal vs. Ins.
Co., 16 Wis., 241; Davenportvs. Ins. Co., 17 Iowa, 276.) An insurance company, establishing a local agency,
must be held responsible to the parties with whom they transact business, for the acts and declarations of
the agent, within the scope of his employment, as if they proceeded from the principal. (Sav. Bk. vs. Ins. Co.,
31 Conn., 517; Hortwitz vs.Ins. Co., 40 Mo., 557; Ayres vs. Ins. Co., 17 Iowa, 176; Howard Ins.
Co. vs. Bruner, 23 Pa., 50.)
In the fifth edition of American Leading Cases, 917, after a full consideration of the authorities, it is said:
"By the interested or officious zeal of the agents employed by the insurance companies in the wish
to outbid each other and procure customers, they not unfrequently mislead the insured, by a false or
erroneous statement of what the application should contain; or, taking the preparation of it into their
own hands, procure his signature by an assurance that it is properly drawn, and will meet the
requirements of the policy. The better opinion seems to be that, when this course is pursued, the
description of the risk should, though nominally proceeding from the insured, be regarded as the act
of the insurers." (Rowley vs. Empire Ins. Co., 36 N.Y., 550.)
The modern decisions fully sustain this proposition, and they seem to us founded on reason and justice, and
meet our entire approval. This principle does not admit oral testimony to vary or contradict that which is in
writing, but it goes upon the idea that the writing offered in evidence was not the instrument of the party
whose name is signed to it; that it was procured under such circumstances by the other side as estops that
side from using it or relying on its contents; not that it may be contradicted by oral testimony, but that it may
be shown by such testimony that it cannot be lawfully used against the party whose name is signed to it.
(See also Am. Life Ins. Co. vs. Mahone, 21 Wallace, 152.)
The defendant, upon the information given by plaintiff, and after an inspection of the automobile by its examiner,
having agreed that it was worth P3,000, is bound by this valuation in the absence of fraud on the part of the insured.
All statements of value are, of necessity, to a large extent matters of opinion, and it would be outrageous to hold that
the validity of all valued policies must depend upon the absolute correctness of such estimated value. As was said
by the Supreme Court of the United States in the case of the First National Bank vs. Hartford Fire Insurance Co. (5
Otto, 673; 24 L. ed., 563), at. p. 565 of the Lawyers Edition:
The ordinary test of the value of property is the price it will commend in the market if offered for sale. But
that test cannot, in the very nature of the case, be applied at the time application is made for insurance. Men
may honestly differ about the value of property, or as to what it will bring in the market; and such differences
are often very marked among those whose special business it is to buy and sell property of all kinds. The
assured could do no more than estimate such value; and that, it seems, was all that he was required to do in
this case. His duty was to deal fairly with the Company in making such estimate. The special finding shows
that he discharged that duty and observed good faith. We shall not presume that the Company, after
requiring the assured in his application to give the "estimated value," and then to covenant that he had
stated all material facts in regard to such value, so far as known to him, and after carrying that covenant, by
express words, into the written contract, intended to abandon the theory upon which it sought the contract,
and make the absolute correctness of such estimated value a condition precedent to any insurance
whatever. The application, with its covenant and stipulations, having been made a part of the policy, that
presumption cannot be indulged without imputing to the Company a purpose, by studied intricacy or an
ingenious framing of the policy, to entrap the assured into incurring obligations which, perhaps, he had no
thought of assuming.
Section 163 of the Insurance Law (Act No. 2427) provides that "the effect of a valuation in a policy of fire insurance
is the same as in a policy of marine insurance."
By the terms of section 149 of the Act cited, the valuation in a policy of marine insurance is conclusive if the insured
had an insurable interest and was not guilty of fraud.
We are, therefore, of the opinion and hold that plaintiff was the owner of the automobile in question and had an
insurable interest therein; that there was no fraud on her part in procuring the insurance; that the valuation of the
automobile, for the purposes of the insurance, is binding upon the defendant corporation, and that the judgment of
the court below is, therefore, correct and must be affirmed, with interest, the costs of this appeal to be paid by the
appellant. So ordered.
Arellano, C.J., Torres, Street, Malcolm and Avancea, JJ., concur

EN BANC
[G.R. No. L-28771. March 31, 1971.]
CORNELIA MATABUENA, Plaintiff-Appellant, v. PETRONILA CERVANTES, Defendant-Appellee.
Alegre, Roces, Salazar & Saez, for Plaintiff-Appellant.
Fernando Gerona, Jr., for Defendant-Appellee.
SYLLABUS
1. CIVIL LAW; PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE; DONATIONS BY REASON OF
MARRIAGE; PROHIBITION AGAINST DONATION BETWEEN SPOUSES DURING MARRIAGE; APPLICABLE TO
COMMON LAW RELATIONSHIP. While Art. 133 of the Civil Code considers as void a "donation between
the spouses during the marriage", policy considerations of the most exigent character as well as the
dictates of morality require that the same prohibition should apply to a common-law relationship. A 1954
Court of Appeals decision Buenaventura v. Bautista, (50 O.G. 3679) interpreting a similar provision of the
old Civil Code speaks unequivocally. If the policy of the law is, in the language of the opinion of the then
Justice J.B.L. Reyes of that Court, "to prohibit donations in favor of the other consort and his descendants
because of fear of undue and improper pressure and influence upon the donor, a prejudice deeply rooted
in our ancient law; porque no se engaen despojandose el uno al otro por amor que han de consuno,
[according to] the Partidas (Part. IV, Tit. Xl, LAW IV), reiterating the rationale Ne mutuato amore invicem
spoliarentur of the Pandects (Bk 24, Tit. I, De donat, inter virum et uxorem); then there is every reason
to apply the same prohibitive policy to persons living together as husband and wife without benefit of
nuptials. For it is not to be doubted that assent to such irregular connection for thirty years bespeaks
greater influence of one party over the other, so that the danger that the law seeks to avoid is
correspondingly increased. Moreover, as already pointed out by Ulpian (in his lib. 32 ad Sabinum, fr. 1), it
would not be just that such donations should subsist lest the condition of those who incurred guilt should
turn out to be better. So long as marriage remains the cornerstone of our family law, reason and morality
alike demand that the disabilities attached to marriage should likewise attach to concubinage.
2. ID.; SUCCESSION; INTESTATE SUCCESSION; SURVIVING SPOUSE; RULE WHERE A SISTER SURVIVES
WITH THE WIDOW. The lack of validity of the donation made b~ the deceased to defendant Petronila
Cervantes does not necessarily result in plaintiff having exclusive right to the disputed property. Prior to
the death of Felix Matabuena, the relationship between him and the defendant was legitimated by their
marriage on March 28. 1962. She is therefore his widow. As provided in the Civil Code, she is entitled to
one-half of the inheritance and the plaintiff, as the surviving sister to the other half.
DECISION
FERNANDO, J.:
A question of first impression is before this Court in this litigation. We are called upon to decide whether
the ban on a donation between the spouses during a marriage applies to a common-law relationship. 1
The plaintiff, now appellant Cornelia Matabuena, a sister to the deceased Felix Matabuena, maintains that
a donation made while he was living maritally without benefit of marriage to defendant, now appellee
Petronila Cervantes, was void. Defendant would uphold its validity. The lower court, after noting that it
was made at a time before defendant was married to the donor, sustained the latters stand. Hence this
appeal. The question, as noted, is novel in character, this Court not having had as yet the opportunity of
ruling on it. A 1954 decision of the Court of Appeals, Buenaventura v. Bautista, 2 by the then Justice J. B.
L. Reyes, who was appointed to this Court later that year, is indicative of the appropriate response that
should be given. The conclusion reached therein is that a donation between common-law spouses falls
within the prohibition and is "null and void as contrary to public policy." 3 Such a view merits fully the
acceptance of this Court. The decision must be reversed.
In the decision of November 23, 1965, the lower court, after stating that in plaintiffs complaint alleging
absolute ownership of the parcel of land in question, she specifically raised the question that the donation
made by Felix Matabuena to defendant Petronila Cervantes was null and void under the aforesaid article of
the Civil Code and that defendant on the other hand did assert ownership precisely because such a
donation was made in 1956 and her marriage to the deceased did not take place until 1962, noted that
when the case was called for trial on November 19, 1965, there was stipulation of facts which it quoted. 4
Thus: "The plaintiff and the defendant assisted by their respective counsels, jointly agree and stipulate:
(1) That the deceased Felix Matabuena owned the property in question; (2) That said Felix Matabuena
executed a Deed of Donation inter vivos in favor of Defendant, Petronila Cervantes over the parcel of land

in question on February 20, 1956, which same donation was accepted by defendant; (3) That the donation
of the land to the defendant which took effect immediately was made during the common law relationship
as husband and wife between the defendant-done and the now deceased donor and later said donor and
done were married on March 28, 1962; (4) That the deceased Felix Matabuena died intestate on
September 13, 1962; (5) That the plaintiff claims the property by reason of being the only sister and
nearest collateral relative of the deceased by virtue of an affidavit of self-adjudication executed by her in
1962 and had the land declared in her name and paid the estate and inheritance taxes thereon" 5
The judgment of the lower court on the above facts was adverse to plaintiff. It reasoned out thus: "A
donation under the terms of Article 133 of the Civil Code is void if made between the spouses during the
marriage. When the donation was made by Felix Matabuena in favor of the defendant on February 20,
1956, Petronila Cervantes and Felix Matabuena were not yet married. At that time they were not spouses.
They became spouses only when they married on March 28, 1962, six years after the deed of donation
had been executed." 6
We reach a different conclusion. While Art. 133 of the Civil Code considers as void a "donation between
the spouses during the marriage," policy considerations of the most exigent character as well as the
dictates of morality require that the same prohibition should apply to a common-law relationship. We
reverse.
1. As announced at the outset of this opinion, a 1954 Court of Appeals decision, Buenaventura v. Bautista,
7 interpreting a similar provision of the old Civil Code 8 speaks unequivocally. If the policy of the law is, in
the language of the opinion of the then Justice J.B.L. Reyes of that Court, "to prohibit donations in favor of
the other consort and his descendants because of fear of undue and improper pressure and influence upon
the donor, a prejudice deeply rooted in our ancient law; porque no se engaen despojandose el uno al
otro por amor que han de consuno [according to] the Partidas (Part IV, Tit. XI, LAW IV), reiterating the
rationale Ne mutuato amore invicem spoliarentur of the Pandects (Bk. 24, Tit. 1, De donat, inter virum et
uxorem); then there is every reason to apply the same prohibitive policy to persons living together as
husband and wife without the benefit of nuptials. For it is not to be doubted that assent to such irregular
connection for thirty years bespeaks greater influence of one party over the other, so that the danger that
the law seeks to avoid is correspondingly increased. Moreover, as already pointed out by Ulpian (in his lib.
32 ad Sabinum, fr. 1), it would not be just that such donations should subsist, lest the condition of those
who incurred guilt should turn out to be better. So long as marriage remains the cornerstone of our family
law, reason and morality alike demand that the disabilities attached to marriage should likewise attach to
concubinage." 9
2. It is hardly necessary to add that even in the absence of the above pronouncement, any other
conclusion cannot stand the test of scrutiny. It would be to indict the framers of the Civil Code for a failure
to apply a laudable rule to a situation which in its essentials cannot be distinguished. Moreover, if it is at
all to be differentiated, the policy of the law which embodies a deeply-rooted notion of what is just and
what is right would be nullified if such irregular relationship instead of being visited with disabilities would
be attended with benefits. Certainly a legal norm should not be susceptible to such a reproach. If there is
ever any occasion where the principle of statutory construction that what is within the spirit of the law is
as much a part of it as what is written, this is it. Otherwise the basic purpose discernible in such codal
provision would not be attained. Whatever omission may be apparent in an interpretation purely literal of
the language used must be remedied by an adherence to its avowed objective. In the language of Justice
Pablo: "El espiritu que informa la ley debe ser la luz que ha de guiar a los tribunales en la aplicacin de
sus disposiciones. 10
3. The lack of validity of the donation made by the deceased to defendant Petronila Cervantes does not
necessarily result in plaintiff having exclusive right to the disputed property. Prior to the death of Felix
Matabuena, the relationship between him and the defendant was legitimated by their marriage on March
28, 1962. She is therefore his widow. As provided for in the Civil Code, she is entitled to one-half of the
inheritance and the plaintiff, as the surviving sister, to the other half. 11
WHEREFORE, the lower court decision of November 23, 1965 dismissing the complaint with costs is
reversed. The questioned donation is declared void, with the rights of plaintiff and defendant as pro
indiviso heirs to the property in question recognized. The case is remanded to the lower court for its
appropriate disposition in accordance with the above opinion. Without pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Barredo, Villamor and Makasiar, JJ.,
concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-12093

June 29, 1959

ESTANISLAO SERRANO, plaintiff-appellant,

vs.
MELCHOR SOLOMON, defendant-appellee.
Constante Pimentel for appellant.
Faustino B. Tobia, Eufrecino T. Tagayana, Pedro R. Arce and Emmanuel U. Ujano for appellee.
MONTEMAYOR, J.:
Estanislao Serrano is appealing the decision of the Court of First Instance of Ilocos Sur, Judge Jose G. Bautista
presiding, declaring null and void the supposed donation propter nuptias on which his complaint was based and
dismissing the later upon motion of the defendant. The motion for dismissal was filed before the hearing but the trial
court deferred action upon it until after submission of evidence by the parties. Said parties entered into a stipulation
of facts after which they declined to submit any other evidence except Exhibit "A", the supposed deed of
donationpropter nuptias, the translation of which, for purposes of reference, is reproduced below:
That, I Melchor Solomon, single, Filipino, of legal age, native of the municipality of Sinait, province of Ilocos
Sur and residing at present in Sinait, having decided to get married with the consent of my parents, brothers,
or sisters and relatives, have announced and manifested my determination and desire to Mr. Estanislao
Serrano to whose family the flower I intend to win belongs, namely Miss Alejandria Feliciano single, born in
Hawaii but is actually residing in Cabugao, Ilocos Sur.
This ardent desire favored by good luck and accepted by the noble lady the one concerned, is to be realized
and complied with under agreement or stipulation which affirms, promotes and vivifies the union. This
agreement donating all my exclusive properties in order that we shall have a basic capital for our conjugal
life and in order that there will be ready maintenance and support of offsprings has come out voluntarily and
expontaneously from me, I the very one concerned.
These which I am donating my exclusive properties because I have honestly acquired the same with the
sweat of my brows and I donate them gladly, to wit . . .;
The referred to properties are donated in accordance with the existing laws of the Philippines and our
children out of the wedlock will be the ones to inherit same inherit same with equal shares. But if God will
not bless our union with any child one half of all my properties including the properties acquired our conjugal
union will be given the (to) my brothers or sisters or their heirs if I, the husband will die before my wife and if
my beloved wife will die before me, one half of all my properties and those acquired by us will be given to
those who have reared my wife in token of my love to her. . . . (Emphasis supplied)
Alejandria Feliciano, whose father went to Hawaii to seek his fortune and who until now resides there, had been left
to her father's friend named Estanislao Serrano who took care of and raised her from the age 12 until she reached
womanhood. On June 21, 1948, defendant Melchor Solomon married Alejandria. On the same day of the marriage
but before the marriage ceremony he executed the alleged Deed of Donation, Exhibit "A" above reproduced. Less
than nine months after marriage, or rather on March 2, 1949, Alejandria died without issue. Several months
thereafter Estanislao Serrano commenced the present action to enforce and implement the terms of the alleged
donation particularly that portion thereof to the effect that if Alejandria died before her husband Melchor and left no
children, then one half of Melchor's properties and those acquired by him and his wife would be given to those
persons who had raised and taken care of her namely, Estanislao Serrano.
Acting upon the motion for dismissal the trial court found that the donation could not be regarded as a
donationpropter nuptias for the reason that though it was executed before the marriage, it was not made in
consideration of the marriage and, what is more important, that the donation was not made to one or both of the
(marriage) contracting parties, but to a third person.

After a careful study of the case, we fully agree with the trial court. Article 1327 of the Old Civil Code reads:
Art. 1327. Donations by reasons of marriage are those bestowed before its celebration in consideration of
the same, upon one or both of the spouses.
This article was reproduced in the Civil Code under Article 126. Whether we apply Article 1327 for the reason that
the document Exhibit "A" was executed in 1948 before the promulgation of the New Civil Code in 1950 or whether
we apply Article 126 of the New Civil Code the result would be the same.
Was the donation made in considerations of the marriage between Melchor and Alejandria or was it made
consideration of the death of either of them in the absence of any children? True, the Deed of Donation was
executed on the occasion when they married. But, the marriage in itself was not the only consideration or condition
under which terms of the donation would be carried out. The marriage would have to be childless and one of the
spouses would have to die before the other before the donation would operate. So, strictly, speaking, the donation
may not be regarded as one made in consideration of the marriage.
But assuming for the moment that it was made in consideration of the marriage, still, we have the fact that the
donation was being made not in favor of Alejandria, the wife, but rather in favor of those who acted as her parents
and raised her from girlhood to womanhood in the absence of her father. That does not place it within the provisions
of Article 1327 and Article 126 of the Old Civil Code and the New Civil Code, respectively. Manresa, in his
commentary on Article 1327 of the Civil Code says the following:
Donations excluded are those (1) made in favor of the spouses after the celebration of marriage; (2)
executed in favor of the future spouses but not in consideration of the marriage; and (3) granted to persons
other than the spouses even though they may be founded on the marriage (6 M. 232).
Having come to the conclusion that the Deed of Donation does not fulfill the requirements of a donation propter
nuptias and that it might be considered a donation inter vivos, can it be considered valid and effective? Hardly,
because it was never accepted by the donee either in the same instrument or donation or in a separate document
as required by law.
Again, may the donation be regarded a donation mortis causa, and given effect? The answer has to be in the
negative for the reason that this Tribunal has heretofore consistently held that a donation to take effect after the
death of the donor, is equivalent to a disposition or bequest of property by last will, an it should be executed in
accordance with the requisites and strict provisions governing the execution wills; 1 and Exhibit "A" does not fulfill
said requirements. Moreover, in the present case, the donor is still alive and naturally, even if the donation were
otherwise valid, still, the time and occasion have not arrived for considering its operation and implementation.
In view of the foregoing, the appealed decision is hereby affirmed, with costs.
Paras, C.J., Bengzon, Padilla, Bautista Angelo, Concepcion, Endencia and Barrera, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-27939

October 30, 1928

FORTUNATA SOLIS, plaintiff-appellee,

vs.
MAXIMA BARROSO, ET AL., defendants-appellants.
Mabanag and Primicias, Emiliano A. Ramos and Eugenio S. Estayo for appellants.
Turner, Rheberg and Sanchez for appellee.

AVANCEA, C. J.:
The spouses Juan Lambino and Maria A. Barroso begot three children named Alejo, Eugenia and Marciana Lambino. On June 2, 1919
said spouses made a donation of propter nuptias of the lands described in the complaint in favor of their son Alejo Lambino and
Fortunata Solis in a private document (Exhibit A) in consideration of the marriage which the latter were about to enter into. One of the
conditions of this donation is that in case of the death of one of the donees, one-half of these lands thus donated would revert to the
donors while the surviving donee would retain the other half. On the 8th of the said month of June 1919, Alejo Lambino and Fortunata
Solis were married and immediately thereafter the donors delivered the possession of the donated lands to them. On August 3, 1919
donee Alejo Lambino died. In the same year donor Juan Lambino also died. After the latter's death, his wife, Maxima Barroso,
recovered possession of the donated lands.
The surviving donee Fortunata Solis filed the action, which is the subject matter of this appeal, against the surviving donor Maxima
Barroso and Eugenia and Marcelina Lambino, heirs of the deceased donor Juan Lambino, with their respective husbands, demanding
of the defendants the execution of the proper deed of donation according to law, transferring one-half of the donated property, and
moreover, to proceed to the partition of the donated property and its fruits.
The court rendered judgment based upon article 1279 of the Civil Code granting plaintiff's prayer and ordering the defendants to
execute a deed of donation in favor of the plaintiff, adequate in form and substance to transfer to the latter the legal title to the part of
the donated lands assigned to her in the original donation.
We are of the opinion that article 1279 of the Civil Code, relating to contracts, is not applicable to the present case.
We are concerned with a donation propter nuptias, which, according to article 1328 of the Civil Code, must be governed by the rules
established in Title II, Book III of this Code, on donations (articles 618 to 656), Article 633 provides that in order that a donation of real
property may be valid, it must be made in a public instrument. This is the article applicable to donation propter nuptias in so far as its
formal validity is concerned. The only exceptions to this rule are onerous and remuneratory donations, in so far as they do not exceed
the value of the charge imposed, which are then governed by the rules on contracts (art. 622), and those which are to take effect upon
the donor's death, which are governed by the rules established for testamentary successions (art. 620).
We have, therefore, a donation propter nuptias which is not valid and did not create any right, since it was not made in a public
instrument, and hence, article 1279 of the Civil Code which the lower court applied is not applicable thereto. The last named article
provides that, should the law require the execution of an instrument or any other special form in order to make the obligations of a
contract effective, the contracting parties may compel each other to comply with such formality from the moment that consent has been
given, and the other requirements for the validity of the contract exist. Suffice it to state that this article refers to contracts and is
inapplicable to the donation in question which must be governed by the rules on donations. It may further be noted, at first sight, that
this article presupposes the existence of a valid contract and cannot possibly refer to the form required in order to make it valid, which it
already has, but rather to that required simply to make it effective, and for this reason, it would, at all events, be inapplicable to the
donation in question, wherein the form is required precisely to make it valid. 1awph!l.net

But the lower court states in its judgment that the present donation is onerous, and pursuant to article 622 of the Civil Code must be
governed by the rules on contracts. This opinion is not well founded. Donations for valuable consideration, as may be inferred from
article 619 of the Civil Code, are such as compensate services which constitute debts recoverable from the donor, or which impose a
charge equal to the amount of the donation upon the donee, neither of which is true of the present donation, which was made only in
consideration of marriage. The lower court insists that, by the fact that this is a donation propter nuptias, it is based upon the marriage
as a consideration, and must be considered onerous. Neither is this opinion well founded. In donations propter nuptias, the marriage is
really a consideration, but not in the sense of being necessary to give birth to the obligation. This may be clearly inferred from article
1333, which makes the fact that the marriage did not take place a cause for the revocation of such donations, thus taking it for granted
that there may be a valid donation propter nuptias, even without marriage, since that which has not existed cannot be revoked. And
such a valid donation would be forever valid, even if the marriage never took place, if the proper action for revocation were not
instituted, or if it were instituted after the lapse of the statutory period of prescription. This is, so because the marriage in a
donationpropter nuptias is rather a resolutory condition which, as such, presupposes the existence of the obligation which may be
resolved or revoked, and it is not a condition necessary for the birth of the obligation.
The judgment appealed from is reversed and the defendants are hereby absolved from the complaint, without special pronouncement
of costs. So ordered.
Johnson, Malcolm, Villamor, Ostrand, Romualdez and Villa-Real, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-26270

October 30, 1969

BONIFACIA MATEO, ET AL., petitioners,

vs.
GERVASIO LAGUA, ET AL., respondents.
Pedro P. Tuason for petitioners.
Isaiah Asuncion for respondents.
REYES, J.B.L., J.:
This is a petition for review of the decision of the Court of Appeals (In CA-G.R. Nos. 30064-R and 30065-R), raising as only issue the
correctness of the appellate court's reduction of a donation propter nuptias, for being inofficious.
The established facts of this case are as follows:
Cipriano Lagua was the original registered owner of 3 parcels of land situated in Asingan, Pangasinan, referred to as Lot No. 998, with
an area of 11,080 sq.m., more or less and covered by O.C.T. No. 362; Lot No. 6541, with an area of 808 sq.m., more or less, covered
by O.C.T. No. 6618; and Lot No. 5106, with an area of 3,303 sq.m., covered by O.C.T. No. 8137. Sometime in 1917, Lagua and his wife
Alejandra Dumlao, in a public instrument, donated Lots 998 and 6541 to their son Alejandro Lagua, in consideration of the latter's
marriage to Bonifacia Mateo. The marriage was celebrated on 15 May 1917, and thereafter, the couple took possession of the
properties, but the Certificates of Title remained in the donor's name.
In 1923, the son, Alejandro, died. His widow, Bonifacia Mateo, and her infant daughter lived with her father-in-law, Cipriano Lagua, who
then undertook the farming of the donated lots. It seems that at the start, Cipriano Lagua was giving to Bonifacia the owner's share of
the harvest from the land. In 1926, however, Cipriano refused to deliver the said share, thus prompting Bonifacia to resort to the Justice
of the Peace Court of Asingan, Pangasinan, from where she obtained a judgment awarding to her possession of the two lots plus
damages.
On 31 July 1941, Cipriano Lagua, executed a deed of sale of the same two parcels of land in favor of his younger son, Gervasio. This
sale notwithstanding, Bonifacia Mateo was continuously given the owner's share of the harvest until 1956, when it was altogether
stopped. It was only then that Bonifacia Mateo learned of the sale of the lots to her brother-in-law, who had the sale in his favor
registered only on 22 September 1955. As a consequence, TCT Nos. 19152 and 19153 of the Register of Deeds of Pangasinan were
issued to Gervasio.
Bonifacia Mateo and her daughter, Anatalia, assisted by her husband, Luis Alcantara, went to the Court of First Instance of Pangasinan
(Civil Case No. T-339), seeking annulment of the deed of sale in favor of Gervasio Lagua and for recovery of possession of the
properties. On 3 January 1957, judgment was rendered in the case
... declaring the sale executed by Cipriano Lagua in favor of the other defendants, Gervasio Lagua and Sotera Casimero, as
null and void and non-existent; ordering the Register of Deeds for the Province of Pangasinan, to cancel Transfer Certificates
of Title Nos. 19152 and 19153; condemning the defendants to pay jointly and severally to the plaintiffs the sum of P200.00;

ordering the defendants Gervasio Lagua and Sotera Lagua to vacate and deliver the possession over the two parcels of land
to the plaintiffs, and to pay the costs of this suit.
The decision became final, and Bonifacia Mateo, and her daughter, Anatalia Lagua, were installed in possession of the land.
On 18 August 1957, the spouses Gervasio Lagua and Sotera Casimero commenced in the Justice of the Peace Court of Asingan,
Pangasinan, an action against Bonifacia Mateo and her daughter for reimbursement of the improvements allegedly made by them on
Lots 998 and 6541, plus damages. Dismissed by the Justice of the Peace Court for being barred by the judgment in Civil Case No. T339, therein plaintiffs appealed to the Court of First Instance of Pangasinan where the case was docketed as Civil Case No. T-433. At
about the same time, another case was filed, this time by Gervasio Lagua and Cipriano Lagua, for annulment of the donation of the two
lots, insofar as one-half portion thereof was concerned (civil Case No. T-442). It was their claim that in donating the two lots, which
allegedly were all that plaintiff Cipriano Lagua owned, said plaintiff not only neglected leaving something for his own support but also
prejudiced the legitime of his forced heir, plaintiff Gervasio Lagua.
Being intimately related, the two cases were heard jointly. On November 12, 1958, while the cases were pending final resolution,
plaintiff Cipriano Lagua died. On 23 December 1960, the court rendered a single decision dismissing Civil Case No. T-433 for lack of
cause of action, plaintiffs spouses Gervasio Lagua and Sotera Casimero having been declared possessors in bad faith in Civil Case
No. T-339 and, therefore, not entitled to any reimbursement of the expenses and improvements put up by them on the land. The other
suit, Civil Case No. T-442, was, likewise, dismissed on the ground of prescription, the action to annul the donation having been brought
only in 1958, or after the lapse of 41 years. Defendants' counterclaims were similarly dismissed although they were awarded attorneys'
fees in the sum of P150.00.
Plaintiffs appealed the decision to the Court of Appeals (CA-G.R. Nos. 30064 and 30065-R). Said tribunal, on 18 March 1966, affirmed
the ruling of the trial court in Civil Case No. T-433 denying plaintiffs' claim for reimbursement of the improvements said to have been
made on the land. In regard to the annulment case (C.F.I. No. T-442), however, the Court of Appeals held that the donation to Alejandro
Lagua of the 2 lots with a combined area of 11,888 square meters execeeded by 494.75 square meters his (Alejandro's) legitime and
the disposable portion that Cipriano Lagua could have freely given by will, and, to the same extent prejudiced the legitime of Cipriano's
other heir, Gervasio Lagua. The donation was thus declared inofficious, and defendants-appellees were ordered to reconvey to plaintiff
Gervasio Lagua a portion of 494.15 square meters to be taken from any convenient part of the lots. The award of attorneys' fees to the
defendants was also eliminated for lack of proper basis.
Bonifacia Mateo, et al., then resorted to this Court, assailing the decision of the Court of Appeals insofar as it ordered them to reconvey
a portion of the lots to herein respondent Gervasio Lagua. It is petitioners' contention that (1) the validity of the donation proper
nuptias having been finally determined in Civil Case No. T-339, any question in derogation of said validity is already barred; (2) that the
action to annul the donation, filed in 1958, or 41 years after its execution, is abated by prescription; (3) that a donation proper nuptias is
revocable only for any of the grounds enumerated in Article 132 of the new Civil Code, and inofficiousness is not one of thorn; and (4)
that in determining the legitime of the Lagua brothers in the hereditary estate of Cipriano Lagua, the Court of Appeals should have
applied the provisions of the Civil Code of 1889, and not Article 888 of the new Civil Code.
Petitioners' first two assigned errors, it may be stated, are non-contentious issues that have no bearing in the actual controversy in this
case. All of them refer to the validity of the donation a matter which was definitively settled in Civil Case No. T-339 and which,
precisely, was declared by the Court of Appeals to be "beyond the realm of judicial inquiry." In reality, the only question this case
presents is whether or not the Court of Appeals acted correctly in ordering the reduction of the donation for being inofficious and in
ordering herein petitioners to reconvey to respondent Gervasio Lagua an unidentified 494.75 square-meter portion of the donated lots.
We are in accord with the Court of Appeals that Civil Case No. 442 is not one exclusively for annulment or revocation of the entire
donation, but of merely that portion thereof allegedly trenching on the legitime of respondent Gervasio Lagua;1 that the cause of action
to enforce Gervasio's legitime, having accrued only upon the death of his father on 12 November 1958, the dispute has to be governed
by the pertinent provisions of the new Civil Code; and that a donation proper nuptias property may be reduced for being inofficious.
Contrary to the views of appellants (petitioners), donations proper nuptias (by reason of marriage) are without onerous consideration,
the marriage being merely the occasion or motive for the donation, not its causa. Being liberalities, they remain subject to reduction for
inofficiousness upon the donor's death, if they should infringe the legitime of a forced heir.2
It is to be noted, however, that in rendering the judgment under review, the Court of Appeals acted on several unsupported
assumptions: that the three (3) lots mentioned in the decision (Nos. 998, 5106 and 6541) were the onlyproperties composing the net
hereditary estate of the deceased Cipriano Lagua; that Alejandro Lagua and Gervasio Lagua were his only legal heirs; that the
deceased left no unpaid debts, charges, taxes, etc., for which the estate would be answerable.3 In the computation of the heirs'
legitime, the Court of Appeals also considered only the area, not the value, of the properties.
The infirmity in the above course of action lies in the fact that in its Article 908 the new Civil Code specifically provides as follows:
ART. 908. To determine the legitime, the value of the property left at the death of the testator shall be considered, deducting all
debts, and charges, which shall not include those imposed in the will.
To the net value of the hereditary estate, shall be added the value of all donations by the testator that are subject to collation,
at the time he made them.
In other words, before any conclusion about the legal share due to a compulsory heir may be reached, it is necessary that certain steps
be taken first. The net estate of the decedent must be ascertained, by deducting an payable obligations and charges from the value of
the property owned by the deceased at the time of his death; then, all donations subject to collation would be added to it. With the

partible estate thus determined, the legitimes of the compulsory heir or heirs can be established; and only thereafter can it be
ascertained whether or not a donation had prejudiced the legitimes. Certainly, in order that a donation may be reduced for being
inofficious, there must be proof that the value of the donated property exceeds that of the disposable free portion plus the donee's
share as legitime in the properties of the donor.4 In the present case, it can hardly be said that, with the evidence then before the court,
it was in any position to rule on the inofficiousness of the donation involved here, and to order its reduction and reconveyance of the
deducted portion to the respondents.
FOR THE FOREGOING CONSIDERATIONS, the decision of the Court of Appeals, insofar as Civil Case No. 442 of the court a quo is
concerned, is hereby set aside and the trial court's order of dismissal sustained, without prejudice to the parties' litigating the issue of
inofficiousness in a proper proceeding, giving due notice to all persons interested in the estate of the late Cipriano Lagua. Without
costs.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Teehankee and Barredo, JJ., concur.