GR 165088; (March, 2006) (Digest)
G.R. No. 165088 ; March 17, 2006
POTENCIANO RAMIREZ, Petitioner, vs. MA. CECILIA RAMIREZ, Respondent.
FACTS
Petitioner Potenciano Ramirez filed a complaint for annulment of a Deed of Donation, a Waiver of Possessory Rights, and two Transfer Certificates of Title, alleging respondent Ma. Cecilia Ramirez caused their execution to acquire ownership of properties. Petitioner claimed the signature of his deceased wife, Dolores Ramirez, on the 1993 Deed was forged, as she died in 1991, and repudiated his own signatures. Respondent countered that the documents were prepared to avoid publication expenses and inheritance taxes, with her father’s knowledge.
The Regional Trial Court found Dolores’s signature on the Deed forged but genuine on the Waiver, and upheld petitioner’s signatures. It dismissed the complaint, holding both parties in pari delicto under Article 1412 of the Civil Code. The Court of Appeals affirmed but found both of Dolores’s signatures forged, similarly applying the pari delicto doctrine.
ISSUE
Whether the parties are in pari delicto, barring relief for the annulment of the documents.
RULING
Yes, the parties are in pari delicto, but under Article 1411, not Article 1412, of the Civil Code. The Court clarified that Article 1412 applies when the illegal cause does not constitute a criminal offense, while Article 1411 governs when it does. Here, forging Dolores’s signature constitutes the criminal offense of falsification under the Revised Penal Code, satisfying Article 1411’s requirement that the act be criminal.
Petitioner argued the illegality pertained to consent (forgery) and not the cause or object of the contract, claiming the properties (the object) were legal. The Court distinguished that the object (the donated properties) was indeed legal, but the cause—the essential reason for the transaction—was illicit. The cause was to evade publication expenses and inheritance taxes due upon Dolores’s death. Since the contract’s nullity proceeds from this illegal cause and involves a criminal act, all requisites for Article 1411 are met.
Both parties, being equally at fault in pursuing this illegal scheme, are in pari delicto. Consequently, neither can seek judicial relief, and they are left as they were when the suit was filed. The petition was denied.