G.R. No. L-7041; February 21, 1957
JESUS MA. CUI, ET AL., plaintiffs-appellants, vs. ANTONIO MA. CUI, ET AL., defendants-appellees.

FACTS

On May 25, 1948, Jesus Ma. Cui and Jorge Ma. Cui filed an action in the Court of First Instance of Cebu against Antonio Ma. Cui and Mercedes Cui de Ramos seeking the annulment of a sale of three parcels of land (Lots Nos. 2312, 2313, and 2319) executed by their father, Don Mariano Cui, in favor of the defendants on March 8, 1946. The plaintiffs also sought partition of the properties among the heirs and the declaration of nullity of a mortgage on the lands securing a P130,000 loan from the Rehabilitation Finance Corporation. The plaintiffs alleged that the sale was procured by deceit while Don Mariano was 84 years old and under the defendants’ influence, and that it was without consideration. They claimed the lots were conjugal properties of Don Mariano and his deceased wife, Doña Antonia Perales. The defendants countered that the lots were the exclusive property of Don Mariano, acquired by donation from his uncle and aunt, and that the sale was valid, executed for consideration while Don Mariano was mentally competent. They also asserted that the plaintiffs were estopped from claiming the lots as conjugal, as evidenced by an extrajudicial partition executed on December 6, 1946, where these lots were excluded from the properties of the conjugal partnership. After trial, the lower court dismissed the complaint, prompting the plaintiffs’ appeal.

ISSUE

1. Whether the deed of sale (Exhibit A) is void or inexistent for lack of valid consent and consideration.
2. Whether the sale is illegal as a prohibited transaction between principal and agent under the old Civil Code.
3. Whether the three lots belong to the unliquidated conjugal partnership of Don Mariano Cui and Doña Antonia Perales.
4. Whether the plaintiffs are entitled to seven-eighths (7/8) of the property and its rentals from November 1, 1947.

RULING

The Supreme Court affirmed the lower court’s decision, dismissing the complaint.
1. The deed of sale was valid. The Court found that Don Mariano Cui was in full possession of his mental faculties when he executed the sale on March 8, 1946. Evidence showed he was actively managing his properties, executing documents, and engaging in business transactions until at least 1948. His subsequent declaration of incompetency in 1949 did not retroactively invalidate the 1946 sale. The claim of lack of consideration was unsubstantiated, as the sale was supported by valuable consideration, including the assumption of Don Mariano’s debt to Ramon Aboitiz.
2. The Court did not find the sale to be a prohibited transaction under Article 1459 of the old Civil Code. The relationship between Don Mariano and defendant Antonio Cui as principal and agent, established by a power of attorney executed days after the sale, did not taint the sale itself, as the power of attorney was not in effect at the time of the sale.
3. The three lots were the exclusive property of Don Mariano Cui, not part of the conjugal partnership. This was conclusively established by documentary evidence, including the extrajudicial partition agreement (Exhibit 1) signed by the plaintiffs and defendants, which expressly excluded these lots from the properties of the conjugal partnership. Other documents, such as an inheritance tax return and a property relation for tax purposes, consistently treated the lots as Don Mariano’s exclusive property.
4. Since the lots were Don Mariano’s exclusive property, the plaintiffs had no right to demand a share in them or their rentals. Don Mariano had the full right to dispose of his exclusive property as he saw fit.