Facts:

This case revolves around Salvador Ascalon and several other heirs as petitioners against the Court of Appeals and Luis E. Cuaycong, Jr. as respondents. The events date back to June 1, 1959, when Praxedes Ascalon passed away. Following her death, her son, Luis E. Cuaycong, Jr., initiated Special Proceeding No. 324 before the then Court of First Instance of Negros Occidental for the settlement of her estate. Praxedes was survived by her husband, Luis D. Cuaycong, Sr., her siblings, and her nephews and nieces, all representing potential heirs. However, conflicts arose because Luis E. Cuaycong, Jr. was the son of Luis D. Cuaycong, Sr. and another woman, leading to opposition from Praxedes' other heirs regarding the estate settlement.

Initially, the husband Luis D. Cuaycong, Sr. requested to be substituted as the petitioner after Luis, Jr.'s motion was granted. A stipulation of facts concerning the estate was crafted, detailing the properties involved, primarily the assets a

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Facts:

Parties and Estate Background

• The petitioners are the heirs of the deceased Praxedes Ascalon, namely Salvador Ascalon, Felicidad Ascalon de Jereza, Soledad Ascalon, Dionisio Mirasol, Ernesto Mirasol, and the nephews and nieces of Praxedes from her sisters, in addition to others.
• The private respondent is Luis E. Cuaycong, Jr., who is the son of Luis D. Cuaycong, Sr. by another woman, which created a conflict with the other heirs regarding the characterization of the disputed real properties.
• After the death of Praxedes on June 1, 1959, a special proceeding was initiated to settle the estate left by her, including a fractional part of real and personal properties such as eight lots (collectively known as Hacienda Bacayan) and a Buick Sedan automobile.

Estate Administration and Stipulation of Facts

• Initially, respondent Luis, Jr. filed the special proceeding; thereafter, Luis, Sr. was substituted and appointed as the judicial administrator of the intestate estate.
• The parties entered into a stipulation of facts regarding the estate which identified:
• The real property consisting of eight lots (Nos. 8, 17, 18, 135, 21, 22, 23, and 28) with their sugar quotas.
• The personal property, which included a Buick Sedan automobile valued at around P2,000.00.
• Dispute arose as the oppositors (Praxedes’ collateral relatives) contended that the parcels of land were conjugal properties entirely, while the respondent asserted that only a 20% portion of the parcels was conjugal and the remaining 80% was the separate (capital) property of Luis, Sr.

The Contested Document and Transactional Particulars

• An uncaptioned document executed on October 10, 1934, was introduced in evidence as Exhibit “G” (for the respondent) and Exhibit “7” (for the petitioners).
• The document detailed several key points:
• The eight lots were encumbered by a mortgage of P61,000.00 to Clotilde de Leon and included an obligation for the buyer, Luis D. Cuaycong, Sr., to pay this mortgage as well as an additional loan of P7,500.00 from the Bank of the Philippine Islands with interests.
• It stipulated that the sale was executed for a nominal consideration of P1.00, plus the obligation to discharge the mentioned financial liabilities.
• The petitioners argued that paragraphs 5 and 6 of the document unequivocally indicate a sale transaction, refuting any interpretation that a donation (even if onerous) was involved.

Procedural History and Lower Court Decisions

• At trial, the lower court declared, by order, that the subject lots (as evidenced by the titles and referenced exhibits) were conjugal properties of Luis D. Cuaycong, Sr. and Praxedes Ascalon.
• On appeal, the Court of Appeals modified the partition:
• It held that 195.3649 hectares of the Hacienda Bacayan belonged as the capital or separate property of Luis, Sr.
• The remaining 57.6351 hectares was deemed conjugal, to be divided equally between Luis, Sr. and the oppositors-appellees under Article 1001 of the N.C.C.
• A motion for reconsideration was denied, prompting the petition for review.

Issue:

Nature of the Contested Document

• Whether the uncaptioned document (Exhibits “G” and “7”) is to be interpreted as partly a deed of donation and partly a conveyance by onerous title or as a deed of sale in its entirety.

Consideration and Transactional Intent

• Whether the nominal consideration of P1.00, along with the obligations to discharge the P61,000.00 mortgage and P7,500.00 bank loan, adequately evidences a sale rather than a donation.
• Whether the parties’ intentions, as reflected in the contract’s wording, control the transaction, notwithstanding the allegedly inadequate monetary consideration.

Implications for the Characterization of the Property

• Whether the factual matrix and evidence on record support the classification of the property as conjugal, or if the sale transaction renders the property a mix of conjugal and separate (capital) property.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)