1. GUARDIAN AND WARD; CONTRACT OF LEASE OF GUARDIANSHIP PROPERTY EXECUTED BY GUARDIAN; LEASE FOR SIX YEARS. — It cannot be said that the indispensable requirement to record the contract in dispute to give it validity, was not complied with, for the reason that the contracts of lease which, by their very nature, must be recorded, are only those covering immovable property which are for a period longer than six years, or those in which the rents for three or more years may have been advanced, or those in which none of the foregoing conditions being present, it has been expressly agreed by the parties that they should be recorded. (Art. 2 of the Mortgage Law.)

2. ID.; ID.; ID; JUDICIAL APPROVAL UNNECESSARY. — Substantially, this is also what article 1548 of the Civil Code, which is of the following tenor, says: "No lease for a term of more than six years shall be made by the husband with respect to the property of his wife, by the father with respect to that of his children, by the guardian with respect to that of his minor ward, or in default of special power, by a manager of property." The quoted provisions authorize the statement that a contract of lease for a period of less than six years and without the other two conditions above-mentioned, is but a mere act of administration for whose validity judicial approval is not necessary. (Tipton v. Andueza, 5 Phil., 477; Enriquez v. A. S. Watson & Co., 6 Phil., 84; 22 Phil., 623; Rodriguez v. Borromeo, 43 Phil., 479; Tan Pho and Tan U v. Nable Jose, 49 Phil., 828; and Lichauco v. Tan Pho, 51 Phil., 862.)

3. ID.; ID.; ID.; ID. — Even if it be conceded that inscription was an indispensable requirement in the contract under consideration, said requirement is present and was complied with on July 23, 1935 when S. G. presented said contract to the registrar of property for its annotation in the corresponding book. (Exhibits 1 and 2.)

4. ID.; ID.; ID.; ID.; INTERPRETATION OF THE PHRASE "FOR PROPER ACTION" USED IN THE ORDER OF THE COURT. — Judicial approval was not necessary because the contract of lease herein involved was entered into precisely by virtue of the express authority which the court had granted to the guardian, through its aforementioned order of October 20, 1934. The phrase "the deed which may be executed to be submitted to this court for proper action," which was used in said order, does not mean that once the contract was formally effected there arose the duty to submit it to the court for its approval. That approval was not necessary not only for the reason already given, that is, that the contract had been expressly authorized; but also because the duration of the contract of lease was not more than six years. "For proper action’ means no more than that the deed or contract should be attached to the record for purposes of reference or information when necessary.

5. ID.; ID.; ID.; BURDENS AND CHARGES ON GUARDIANSHIP PROPERTY. — It is true that under the provisions of section 569 of Act No. 190, as amended by Act No. 2640, burdens or charges may not be made on property under guardianship without the knowledge and leave of the court. It is, however, likewise true that this is what has been done in the case at bar, inasmuch as the hacienda "Makamig" was leased to S. G. precisely upon the express authority granted the guardian by the court. Besides, it is also a fact that nowhere in said law is it declared that after the performance of what has been authorized it should again be submitted to the court for its approval. The leasing of an immovable for six years or less is furthermore not a charge or burden, since the Civil Code considers only the lease, for a longer period to be so. For this reason, it is said in a resolution of the Department of Registries of Spain from which our Code is derived, that the recording of a contract of lease, which contains all the requirements of article and the Mortgage Law, is a real burden whereby the owner of an estate limits, to the prejudice of the subsequent owners, the free exercise of one of the rights of dominion; and in another it is affirmed that the Mortgage Law has made into a truly real right the lease having all the necessary conditions for its inscription. (10 Manresa, Civil Code, 4th edition, p. 426.)

6. ID.; ID.; ID.; ID. — As the aforementioned section 669 of Act No. 190 has not amended articles 1548 and 1713 above-cited, of the Civil Code, which are in a way interrelated, as well as article 2 of the Spanish Mortgage Law, the only practical interpretation that may be given to said section (569 of Act No. 190) in referring to charges and burdens, is that leases of immovables for a period of less than six years are not thus considered.

7. ID.; ID.; ID.; DETERMINATION OF THE BEST LEASE PROPOSAL. — It is unnecessary to hold as without merit the guardian’s other argument that the order of October 17, 1935 which finds the contract of lease in favor of S. G. as illegal, and the lease granted to G. J. as valid, on the ground that the conditions offered by the latter are better, because in order to determine the question of whether or not said conditions are better than those proposed by S. G., the element of time or the occasion on which they were offered must be taken into account. Those of J were offered on August 14, 1935, while the contract in favor of S. G. was perfected on October 25, 1934. In such cases, the best over is not that which contains better conditions, made after the occasion when it should have been made; but that given on that occasion, which is found to be advantageous after comparison with others made at the same time.

8. ID.; ID.; ID.; VALIDITY OF THE CONTRACT; JUDICIAL ERROR. — The lower court clearly erred in holding in these same guardianship proceedings, without n separate case having been commenced, that the contract of lease in question is void because it lacks judicial approval. Contracts are presumed valid until they are declared to be otherwise; and this can only be done by bringing an ordinary action in a separate case wherein the question may be determined because Chapter XXVII of Act No. 190 dealing with guardianships, does not confer authority on the court to concern itself therewith or, more exactly, to decide it. What has been held in the cases of Guzman v. Anog and Anog (37 Phil., 61); Alafriz v. Mina (28 Phil., 137); Llacer v. Muñoz de Bustillo and Achaval (12 Phil., 328); and Hagans v. Wislizenus (42 Phil., 880), is, by reason of its close analogy to the case at bar, of great and timely application thereto.

9. ID.; ID.; ID.; ID.; ID. — Since the contract of lease entered into between the guardian and the appellant S. G. is valid as we have held, it was improper to accept the offer of G. J., which was only made nine months after said contract was perfected and more than one month after it is recorded in the registry of property. This is the more evident when it is remembered that the appellant was already then in possession of several portions of the leased hacienda even if the fact that the contract was recorded in the registry of property, which adds weight to the contention of the appellant by virtue of sections 51 and 70 of Act No. 496, were disregarded.

The guardianship of the incompetent Eulalio Lopez has been the owner long before the year 1932 of the hacienda known as "Makamig", located in the municipality of Silay, Province of Occidental Negros, and formed by the lands identified in the cadastre of that municipality as lots Nos. 662 and 686. In 1934 it was leased for three years beginning with the 1932-1933 crop year to Glicerio Montinola.

As the guardianship was in need of funds to meet certain unpaid obligations, the guardian petitioned and obtained from the Court of First Instance of Occidental Negros which had control of the guardianship proceedings, authority to negotiate a loan which may not exceed P3,000, encumbering therefor by way of second mortgage the hacienda aforementioned which was at the time already subject to a previous one in favor of the spouses Albino Jison and Dolores Lopez de Jison.

Acting thereafter in accordance with the authority which had been granted him, the guardian obtained a loan of P2,500 from Serafin Gamboa, his own brother, the two agreeing that said loan would earn interest at 12 per cent per annum which would be payable within the period of two years to be counted from October 16, 1934. It was on this date just mentioned when the guardian executed the corresponding deed of second mortgage in favor of his aforesaid brother Serafin Gamboa. The Court of First Instance of Occidental Negros to which the deed referred to was presented one day after for its approval, approved it on October 20, 1934, and in doing so expressly authorized the guardian — using its own words — "to give in lease the said hacienda Makamig to any person or entity which offers the best conditions, the deed which may be executed to be submitted to this court for proper action."cralaw virtua1aw library

Five days later, the guardian leased the hacienda in question to Serafin Gamboa himself from whom he had obtained he loan of P2,500, the two agreeing at the time that the duration of the lease would be six years to begin from the 1936-1937 harvest and that the rent would be 500 piculs of centrifugal sugar per year. This lease was set forth in a public instrument executed on October 25, 1934, which was not, however, presented for registration in the registry of property until July 23, 1935. In that deed the guardian authorized the lessee to take possession of the unoccupied portions of the hacienda beginning with the month of July, 1935.

Having been informed of the new lease, the prior lessee, Glicerio Montinola, filed with the court on November 21, 1934 a motion praying that he be allowed to continue leasing the hacienda for another three years, alleging that he had invested therein sufficient money to improve it and proposing conditions which, he believed, were better than those offered by Serafin Gamboa. To influence the court further in his favor, he made it understand that if the guardian had given the aforesaid new lease to Serafin Gamboa it was because the latter is the former’s brother. On November 24, 1934 the guardian opposed Montinola’s motion, contending that up to then Montinola had not submitted to him any lease proposal; that if the one which he was contemplating to submit be of the same terms and conditions as his lease, under which he would continue paying the same rent that he had been paying until then and which was much smaller than that offered by Serafin Gamboa, the guardianship would be greatly prejudiced; that Montinola had no reason to complain of having made improvements on the hacienda because he well knew from his very contract of lease that at the expiration of the time therein agreed upon, whatever improvement he might have introduced would pass to the ownership of the guardianship; that he owed rents in arrears in the amount of P4,181.81; that the offer of Serafin Gamboa which was already accepted, was also to give 12 per cent of the harvest, similar to what Montinola now offers the court; and that in addition to this fact, he bound himself to pay the corresponding realty tax on the hacienda. In reply to all the foregoing, Montinola absolutely denied it and added that he was ready to offer the same conditions as those of Serafin Gamboa. While the controversy was at this stage, Serafin Gamboa intervened, and in his complaint dated January 19, 1935 he prayed the court to confirm his right to lease the hacienda in question in consideration of the fact that he had effectively helped the guardianship out of its difficulties, giving it a loan of P2,500, without which the government, according to him, would have confiscated the hacienda by reason of delay in the payment of taxes owing y the guardianship. Things were in this state, when Gonzalo Junsay intervened in the case, offering to take the hacienda in lease for four years on August 14, 1935, but ,with the option of extending the lease for another three years, and binding himself to give 15