G.R. No. L-11240. February 13, 1958

Against the decision of this Court holding the appellees, in their quality
of successors of the late Salvador F. Lopez, Barred from questioning as immoral
the donation aade by said deceased in favor of appellant Conchita Liguez, said
appellees have interposed a notion for reconsideration praying us to declare:

1. That the donation in question, being with an illicit cause, is null and void
   and inexistent, and produced no effects whatsoever.

2. That the pari delicto rule should apply.
3. That what may preclude the deceased donor from setting up the illegality
   cannot preclude his heirs.

4. That the appellant is in estoppel. 

Concerning the first proposition, this
Court has declared the donation to be tainted by immoral (i.e. illegal) causa,
which necessarily involves the consequence that it is void and of no effect.
Nevertheless, the court was also bound to apply Articles 1305 and 1306 of the
Civil Code of 1889 (being the law in the case)

and under said articles, nullity of contracts due to illegal consideration or
subject matter, when executed (and not merely executory) ,does produce the
effect of barring any action by a guilty party to recover what it has already
given under the contract.

“Art.1305. When the nullity arises from the illegality of the consideration
or of the subject-matter of the contract, if the fact constitutes a crime or
misdemeanor common to both contracting parties, neither shall be entitled to
maintain an aetion against the other, and criminal proceedings shall be
instituted against them; and, furthermore, the things or money which may have
been the subject-matter of the contract shall be disposed of in accordance with
the rules prescribed by the Penal Code concerning the effects of a crime or
misdemeanor and the instruments used in its commission.

This provision shall be applicable to cases in which one only of the
contracting parties has been guilty of a crime or misdemeanor, but the innocent
party may recover anything he may have given and shall not be bound to fulfill
any promise he may have made.”

“Art. 1306. If the act which constitutes the illicit consideration is neither
a crime nor a misdemeanor, the following rules shall be
observed:

1. When both parties are guilty, neither of them can recover what he may have
   given by virtue of the contract, or enforce the performance of the undertaking
   of the other party;

2. When only one of the contracting parties is guilty he cannot recover
   anything which he may have given by virtue of the contract, nor enforce the
   performance of any undertaking in his favor. The other party, if he has had
   nothing to do with the illicit consideration, may recover anything which he may
   have given without being obliged to perform any undertaking he may have
   assumed.”

These articles make it plain that in so far as the guilty is concerned, his
act of conveying property pursuant to tan illicit contract operates to divest
him of the ownership of the conveyed property, and to bar him from recovering it
from his transferee, just as if the transfer were through a bargain legal in its
inception. Repugnant as immoral bargains are, the law deems it more repugnant
that a party should invoke his own guilt as a reason for relief from a situation
he deliberately entered: “Nemo auditur propriam turpitudinem allegans”. The
foregoing serves to explain why the tainted conveyance, to the extent that it has been carried
out, becomes conclusive as between the guilty parties, even if without effect
against strangers without notice; and why a guilty party may nct ask the courts
for a restoration to the status quo ante.^[1]

The argument that appellant’s suit to recover the property amounts to an
enforcement of the illegal contract itself fails to take into account the detail
that the donation by Lopez to appellant was a full and complete act of
conveyance. Donation, it must be remembered, is one of the modes of acquiring
ownership; and the retention of the donated land by the donor or his privies can
not deprive the donation of its transferring effect, either because donation
does net need te be completed by tradition (since Art. 609 prescribes that
“ownership and rights therein are acquired and transmitted by donation,
succession-and in consequence of certain contracts by tradition, “thereby
implying that donation is not one of the contracts requiring tradition), or else
because the execution of the notarial deed is equivalent to the physical
tradition of the property, as expressly provided by par. 2 of Article 1462 of
the Code of 1889. True it is that the decisions of this Court (Addison vs.
Felix, 39 Phil. 404, etc.) declare that such tradition “per chartam” is
ineffective where the thing conveyed was at the time in the physical possession
of third perons; but the possession of the donor or of his family can in wise be
considered possession by strangers to the conveyance.

The donation being regular on its face, the refusal of appellees to surrender
the donated property is in itself an attack in the validity of the gift made by
their predecessor Salvador F. Lopez. Note well that appellant Liguez does not
seek specific performanee of the donation: the latter has been already
completely executed, and no further action is required. The basis of appellant’s
complaint is not an executory contract to convey, but the ownership resulting
from the completed conveyance; and that ownership carries with it the right tc
possession (jus possidendi) that the appellees seek to withhold. To retain
possesion of the thing donated, appellees must defeat the donation; to defeat
the donation they invoke its illegality, and this Court has ruled that they can
not do so, because their predecessor was barred by law from so doing.

The debarring of appellees, qua successors and privies of the deceased donor,
Salvador F. Lopez, is not predicated (as appellees erroneously believe) on the
technical rules of estoppel, but on one more basic and fundamental: that the
heir or successor, his quality as such, can not have a better right than the
predecessor whom he replaces. The justice of this principle has been recognized
by both the civil and the common law. “Nemo plus juris ad alium transferee
potest quam ipse habet”; one can not transfer to another more rights than he has
himself, as noted by Lord Coke in his Commentaries on Littleton (309b) virtually
reiterating the of the Digest (50,17,54) and the Partidas (Part. VII, Tit. 34,
rule 12) and pithily condensed in the vulgar “Nemo dat quod non habet”. With
particular reference to a deceased’s contracts, Digest restates (50, 17, 143, De
regulis juris) the consequent principle due to Ulpians “Quod ipsis qui
contraxerunt. obstat, successoribus eorum obstabit”: what bars those who
contracted will likewise bar their successors. These maxims are net only
grounded on common sense, but result from the very nature of succession as a
mere derivative mode of acquiring rights. In consequence, this Court held that
the appellees may attack the donation only if they can base its invalidity
upon reasons independent of their quality as heirs or successors of the donor;
and this is likewise true of the widow. Such recourse was reserved in our main
decision.

The contention that the pari delicto rule should have been applied to this
case deliberately ignores the important fact emphasized in our main decision,
to wit: that the appellant Liguez was a minor of sixteen at the time the
contract was made, while Lopez was of mature years and experience. No authority
has been called to our attention holding that the guilt of a minor should be
judged with severity equal to the guilt of an adult. It is well known that
minors occupy a privileged position in law; and the law’s tender care for them
is emphasized by Art. 1415 of the new Civil Code. At any rate, the point is
unimportant, because the donation having been fully executed, even if the
parties were held to be in pari delicto the action of the donor or his privies
ta recover the conveyed property and return to the status quo would remain
barred by Arts. 1305 and 1306.

The ruling in the cases of Velasquez vs. Biala, 18 Phil. 231; Perizuelo vs.
Benedicto, 9 Phil. 621; Pamittan vs. Lasam, 60 Phil. 908; and Camagay vs.
Lagera, 7 Phil. 397, holding a donation of real estate to be invalid if made in
private writing, has no application to the case at bar, wherein the essential
formalities prescribed by statute were duly observed. A donation being a formal
or solemn act, it does not exist in law if the formalities prescribed are not
accomplished; and being thus inexistent, it is open to attack even by the
parties thereto. But the donation in the present case is not inexistent but
illegal, and specific articles of the Civil Code command that neither party
thereto may be heard to invoke its unlawful character as a ground for relief. It
is not possible to ignore this difference between true inexistence and
illegality under the Civil Code of 1889.

Appellees also rely on the provisions of Art. 4 of the Civil Code to the
effect that-

“Acts performed contrary to the provisions of law are void, except in the
cases where the law itself provides for their validity.”

to support the thesis that donations of conjugal property by the husband
without his wife’s consent being forbidden by Art. 1413, the donation in favor
of appellee should net be given effect. This argument is, however, untenable
because of the terms of Art. 1419:

“Art. 1419. The inventory shall include, for the purpose of collating them, a
statement of any sums which, having been paid by the conjugal partnership, are
to be deducted from the wife’s dowry or from the capital of the husband, in
accordance with Articles 1366, 1377, and 1427.

The value of any gifts or alienations which, in accordance with Article 1413,
are to be deemed illegal or fraudulent, shall also be collated.”

The second paragraph of said article shows that the lawmaker does not view
the donations made by the husband without the consent cf the wife as void, but
merely fraudulent, subject to collation upon liquidation of the conjugal
partnership and deduction of its value from the donor’s share in the conjugal
profits. This conclusion is supported not only by the commentators but also by
the total absence in the Code of 1889 of any provision authorizing the wife to
recover the property donated during the existence of the conjugal partnership,
in contrast to Art. 173 of the new Civil Code. The donation now in question,
therefore, falls within the exception of Art. 4 rather than its general
rule.

Finally, the rule of estoppel by laches can not apply to prevent enforcement
of the principle that a party to an illegal contract can not recover what he has
given pursuant thereto, for the latter is a rule of superior public policy.

WHEREFORE, the motion to reconsider is denied.

Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo,
Labrador, Concepcion, Reyes, J.B.L., Endencia, and Felix, JJ.,
concur.