G.R. No. 172027 - Go, Jr. vs. Court of Appeals

On December 9, 1918, Adriana Carrillo executed a document of sale transferring eleven parcels of land (totaling 330,409 square meters or approximately 33 hectares) located in the barrio of Ulong-Tubig, Carmona, Cavite, in favor of Marcos Jaojoco for the sum of P4,000.
The sale included not only the land but one-half of the improvements built on it, and the seller admitted the receipt of the purchase price during the transaction.

Nine days after the execution of the contract, Adriana Carrillo was declared mentally incapacitated by the Court of First Instance.
Subsequent to her declaration and eventual death, her sister Miguela Carrillo was appointed judicial administratrix of Adriana’s intestate estate.
Acting in her capacity as administratrix, Miguela Carrillo initiated legal action seeking to annul the contract of sale against Marcos Jaojoco, and his father Justiniano Jaojoco.

Prior to the transaction, there were allegations supported by the plaintiff that Adriana Carrillo exhibited signs of mental derangement, including her actions in 1917 and admissions to institutions like the Hospital de San Lázaro and Hospicio de San José.
However, detailed evidence from 1917 shows Adriana functioning competently:

She diligently performed complex acts of administration as the judicial administratrix of her late husband’s estate, including handling considerable financial transactions.
She executed contracts of lease and appeared in court proceedings, which indicated a sound capability in managing legal and administrative affairs.

On November 13, 1918, she was admitted to the “Hospital de San Juan de Dios” after an episode of cerebral hemorrhage with hemiplegia. During her treatment:

Dr. Ocampo, her attending physician, attested that her responses to questions were coherent and that her cognitive faculties remained intact despite the physical impairment.
Her medical condition improved by December 8, 1918, allowing her to leave the hospital.

The notary observed that her countenance was dignified, her answers were consistent and correct, and there were no observable signs of mental abnormality during the execution of the contract.

Testimonial evidence further highlighted inconsistencies in the claims of mental incapacity:

The principal witness, who was also the surety for her appointment as administratrix, had no reason to believe she was incapable, given the responsibilities entrusted to her.
Other witnesses, meanwhile, conducted transactions with Adriana during the period in question, suggesting that she was perceived as mentally capable by multiple parties.

The evidence pointed out a potential concern regarding the disproportion between the sale price and the land’s market value.
On detailed examination, the pittance of P4,000 for the 33-hectare property was found to be consistent with prevailing land values (approximately a little over P100 per hectare), thus reflecting its true worth.

Marcos Jaojoco was identified as Adriana Carrillo’s nephew while Justiniano Jaojoco, her brother-in-law, also played a role in her care.
Both defendants were actively involved in her management and cared for her during her hospital stay, an action that could suggest gratitude and a basis for favorable transactional terms rather than exploitation.

Whether the document of sale executed by Adriana Carrillo on December 9, 1918, is voidable on the ground of mental incapacity.

Did Adriana exhibit signs of mental incapacity at the time of executing the sale contract?
Is the evidence indicating later mental incapacity sufficient to establish incapacity at the time of the contract’s execution?

The significance of contrary and corroborative evidence regarding her mental state

How should the evidence of her proper administrative actions prior to the signing be weighed against the plaintiff’s testimonial evidence alleging mental derangement?
What is the impact of her treatment and subsequent recovery from cerebral hemorrhage on the assessment of her mental capacity during the transaction?

The relevance of the alleged disproportion between the sale price and the market value of the land

Does an ostensibly low sale price, relative to the real estate value, inherently indicate mental incapacity or undue influence in the execution of the contract?
Can gratitude towards the defendants for their care be reasonably used to justify the terms of the sale?