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SPOUSES LEQUIN VS. SPS.

VIZCONDE
SUNDAY, AUGUST 24, 2014
FACTS:
In 1995, spouses Ramon and Virginia Lequin, residents bought the subject lot consisting of 10,115 sq. m.
from one Carlito de Leon. The sale was negotiated by respondent Raymundo Vizconde.
In 1997, spouses Vizconde represented to spouses Lequin that they had also bought from Carlito de Leon a
1,012 sq. m. lot adjacent to the Lequins and built a house thereon.
As later confirmed by de Leon, however, the 1,012 sq. m. lot claimed by the Vizcondes is part of the 10,115
sq. m. lot Lequin bought from him.
With the consent of the Vizcondes, spouses Lequin then constructed their house on the 500-square meter
half-portion of the lot claimed by respondents, as this was near the road.
Given this situation where the house of Lequins stood on a portion of the lot allegedly owned by Vizcondes,
the former consulted a lawyer, who advised them that the 1,012 sq. m. lot be segregated from the subject lot
whose title they own and to make it appear that they are selling to respondents 512 square meters thereof.
This sale was embodied in the February 12, 2000 Kasulatan where it was made to appear that the
Vizcondes paid PhP 15,000 for the purchase of the 512-square meter portion of the subject lot.
In July 2000, petitioners tried to develop the dried up canal located between their 500-square meter lot and
the public road. However, the respondents objected, claiming ownership of said dried up canal or sapang
patay.
This prompted the Liquins to look into the ownership of the dried up canal and the lot claimed by the
respondents Carlito de Leon told petitioners that what he had sold to respondents was the dried up canal or
sapang patay and that the 1,012-square meter lot claimed by respondents really belongs to petitioners. In
2001, petitioners filed a complaint praying for the Kasulatan to be declared as null and void ab initio.
The RTC found the Kasulatan allegedly conveying 512 square meters to respondents to be null and void
due to: (1) the vitiated consent of petitioners in the execution of the simulated contract of sale; and (2) lack
of consideration, since it was shown that while petitioners were ostensibly conveying to respondents 512
square meters of their property, yet the consideration of PhP 15,000 was not paid to them and, in fact,they
were the ones who paid respondents PhP 50,000.
Upon appeal by the respondent-spouses, CA reversed the ruling.
ISSUE: WON the Kasulatan was null and void.
But take note, on the issue of consent, the SC said that the Kasulatan was merely voidable. But on the issue
of consideration, it was void. Final ruling - void.
HELD: YES
Re: Lack of Consideration
The contract of sale or Kasulatan states that respondents paid petitioners PhP 15,000 for the 512-square
meter portion. On its face, the above contract of sale appears to be supported by a valuable consideration.
We, however, agree with the trial courts finding that this is a simulated sale and unsupported by any
consideration, for respondents never paid the PhP 15,000 purported purchase price.
The kasulatan did not express the true intent of the parties
Lack of consideration was proved by petitioners evidence aliunde showing that the Kasulatan did not
express the true intent and agreement of the parties. As explained above, said sale contract was
fraudulently entered into through the misrepresentations of respondents causing petitioners vitiated
consent.

There can be no doubt that the contract of sale or Kasulatan lacked the essential element of consideration.
It is a well-entrenched rule that where the deed of sale states that the purchase price has been paid but in
fact has never been paid, the deed of sale is null and void ab initio for lack of consideration. Moreover, Art.
1471 of the Civil Code, which provides that if the price is simulated, the sale is void, also applies to the
instant case, since the price purportedly paid as indicated in the contract of sale was simulated for no
payment was actually made.
The contract is void ab intio
Consideration and consent are essential elements in a contract of sale. Where a partys consent to a
contract of sale is vitiated or where there is lack of consideration due to a simulated price, the contract is null
and void ab initio.
The PhP 50,000 paid by petitioners to respondents as consideration for the transfer of the 500-square meter
lot to petitioners must be restored to the latter.
Otherwise, an unjust enrichment situation ensues. The facts clearly show that the 500-square meter lot is
legally owned by petitioners as shown by the testimony of de Leon; therefore, they have no legal obligation
to pay PhP 50,000 therefor.
Considering that the 512 square-meter lot on which respondents house is located is clearly owned by
petitioners, then the Court declares petitioners legal ownership over said 512 square-meter lot. The amount
of PhP 50,000 should only earn interest at the legal rate of 6% per annum from the date of filing of complaint
up to finality of judgment and not 12% since such payment is neither a loan nor a forbearance of credit.
After finality of decision, the amount of PhP 50,000 shall earn interest of 12% per annum until fully paid.
There was vitiated consent on the part of Spouses Lequin.
There was fraud in the execution of the contract used on petitioners which affected their consent.
Petitioners reliance and belief on the wrongful claim by respondents operated as a concealment of a
material fact in their agreeing to and in readily executing the contract of sale, as advised and proposed by a
notary public.
Believing that Carlito de Leon indeed sold a 1,012-square meter portion of the subject property to
respondents, petitioners signed the contract of sale based on respondents representations. Had petitioners
known, as they eventually would sometime in late 2000 or early 2001 when they made the necessary inquiry
from Carlito de Leon, they would not have entered or signed the contract of sale, much less pay PhP 50,000
for a portion of the subject lot which they fully own. Thus, petitioners consent was vitiated by fraud or
fraudulent machinations of Raymundo. In the eyes of the law, petitioners are the rightful and legal owners of
the subject 512 square-meter lot anchored on their purchase thereof from de Leon. This right must be
upheld and protected.
HEIRS OF INTAC VS. CA
TUESDAY, AUGUST 19, 2014
FACTS:
Ireneo Mendoza, married to Salvacion Fermin, was the owner of the subject property located in Quezon city
which he purchased in 1954. (TCT No. 242655). Ireneo had two children: respondents Josefina and Martina
(respondents), Salvacion being their stepmother. When he was still alive, Ireneo, also took care of his niece,
Angelina, since she was three years old until she got married.
On October 25, 1977, Ireneo, with the consent of Salvacion, executed a deed of absolute sale of the
property in favor of Angelina and her husband, Mario (Spouses Intac). Despite the sale, Ireneo and his
family, including the respondents, continued staying in the premises and paying the realty taxes. After Ireneo
died intestate in 1982, his widow and the respondents remained in the premises. After Salvacion died,
respondents still maintained their residence there. Up to the present, they are in the premises, paying the
real estate taxes thereon, leasing out portions of the property, and collecting the rentals.
The controversy arose when respondents sought the cancellation of TCT No. 242655, claiming that the sale
was only simulated and, therefore, void. The heirs of Ireneo, the respondents in this case, alleged that:
1. When Ireneo was still alive, Spouses Intac borrowed the title of the property (TCT No. 106530) from him
to be used as collateral for a loan from a financing institution;

2. They objected because the title would be placed in the names of said spouses and it would then appear
that the couple owned the property; that Ireneo, however, tried to appease them, telling them not to worry
because Angelina would not take advantage of the situation considering that he took care of her for a very
long time; that during his lifetime, he informed them that the subject property would be equally divided
among them after his death; and
3. That respondents were the ones paying the real estate taxes over said property.
Spouses Intac countered, among others, that the subject property had been transferred to them based on a
valid deed of absolute sale and for a valuable consideration; that the action to annul the deed of absolute
sale had already prescribed; that the stay of respondents in the subject premises was only by tolerance
during Ireneos lifetime because they were not yet in need of it at that time; and that despite respondents
knowledge about the sale that took place on October 25, 1977, respondents still filed an action against
them.
RTC ruled in favor of the respondents saying that the sale to the spouses Intac was null and void. The CA
also ruled that there was no consideration in the sale to the spouses Intac and that the contract was one for
equitable mortgage.
ISSUES:
WON the Deed of Absolute Sale was a simulated contract or a valid agreement.
WON the Deed of Absolute Sale, dated October 25, 1977, involving the subject real property in Pagasa,
Quezon City, was a simulated contract or a valid agreement.
HELD:
The deed of sale executed by Ireneo and Salvacion was absolutely simulated for lack of consideration and
cause and, therefore, void.
Articles 1345 and 1346 of the Civil Code provide:
Art. 1345. Simulation of a contract may be absolute or relative. The former takes place when the parties do
not intend to be bound at all; the latter, when the parties conceal their true agreement.
Art. 1346. An absolutely simulated or fictitious contract is void. A relative simulation, when it does not
prejudice a third person and is not intended for any purpose contrary to law, morals, good customs, public
order or public policy binds the parties to their real agreement.
Relatively simulated agreement vs. Absolute simulation
If the parties state a false cause in the contract to conceal their real agreement, the contract is only relatively
simulated and the parties are still bound by their real agreement. Hence, where the essential requisites of a
contract are present and the simulation refers only to the content or terms of the contract, the agreement is
absolutely binding and enforceable between the parties and their successors in interest
In absolute simulation, there is a colorable contract but it has no substance as the parties have no intention
to be bound by it. "The main characteristic of an absolute simulation is that the apparent contract is not
really desired or intended to produce legal effect or in any way alter the juridical situation of the parties." "As
a result, an absolutely simulated or fictitious contract is void, and the parties may recover from each other
what they may have given under the contract."
No valid sale took place between Ireneo and Spouses Intac
In the case at bench, the Court is one with the courts below that no valid sale of the subject property actually
took place between the alleged vendors, Ireneo and Salvacion; and the alleged vendees, Spouses Intac.
There was simply no consideration and no intent to sell it.
Evidences to prove that there was no absolute deed of sale between the parties
Critical is the testimony of Marietto, a witness to the execution of the subject absolute deed of sale. He
testified that Ireneo personally told him that he was going to execute a document of sale because Spouses
Intac needed to borrow the title to the property and use it as collateral for their loan application. Ireneo and
Salvacion never intended to sell or permanently transfer the full ownership of the subject property to
Spouses Intac. Marietto was characterized by the RTC as a credible witness.
Aside from their plain denial, the heirs of Intac failed to present any concrete evidence to disprove Mariettos

testimony. They claimed that they actually paid P150,000.00 for the subject property. They, however, failed
to adduce proof, even by circumstantial evidence, that they did, in fact, pay it. Even for the consideration of
P60,000.00 as stated in the contract, petitioners could not show any tangible evidence of any payment
therefor. Their failure to prove their payment only strengthened Mariettos story that there was no payment
made because Ireneo had no intention to sell the subject property.
Angelinas story, except on the consideration, was consistent with that of Marietto. Angelina testified that she
and her husband mortgaged the subject property sometime in July 1978 to finance the construction of a
small hospital in Sta. Cruz, Laguna. Angelina claimed that Ireneo offered the property as he was in deep
financial need.
The contract of sale was only for the purpose of lending the title of the property to Spouses Intac to enable
them to secure a loan.
Their arrangement was only temporary and could not give rise to a valid sale. Where there is no
consideration, the sale is null and void ab initio. The case of Lequin vs. VIzconde was cited in this case.
The fact that Ireneo was still in physical possession of the subject property after the sale is a strong
evidence to prove that there was no valid sale between the parties.
More importantly, Ireneo and his family continued to be in physical possession of the subject property after
the sale in 1977 and up to the present. They even went as far as leasing the same and collecting rentals. If
Spouses Intac really purchased the subject property and claimed to be its true owners, why did they not
assert their ownership immediately after the alleged sale took place? Why did they have to assert their
ownership of it only after the death of Ireneo and Salvacion? One of the most striking badges of absolute
simulation is the complete absence of any attempt on the part of a vendee to assert his right of dominion
over the property.
As heretofore shown, the contemporaneous and subsequent acts of both parties in this case, point to the
fact that the intention of Ireneo was just to lend the title to the Spouses Intac to enable them to borrow
money and put up a hospital in Sta. Cruz, Laguna. Clearly, the subject contract was absolutely simulated
and, therefore, void.
The Spouses Intac never became the owners of the property despite its registration in their names.
It is also of no moment that TCT No. 106530 covering the subject property was cancelled and a new TCT
(TCT No. 242655)21 was issued in their names. After all, registration does not vest title. As a logical
consequence, petitioners did not become the owners of the subject property even after a TCT had been
issued in their names.
BUENAVENTURA VS. CA
TUESDAY, JULY 1, 2014
FACTS:
Defendant spouses Leonardo Joaquin and Feliciana Landrito are the parents of plaintiffs Consolacion, Nora,
Emma and Natividad as well as of defendants Fidel, Tomas, Artemio, Clarita, Felicitas, Fe, and Gavino, all
surnamed JOAQUIN. (Note: So there are two sets of children here.)
Sought to be declared null and void ab initio are certain deeds of sale of real property executed by Leonardo
Joaquin and Feliciana Landrito in favor of their co-defendant children and the corresponding certificates of
title issued in their names. The plaintiffs in this case sought for the declaration of nullity of the six deeds of
sale and certificates of title in favor of the defendants. They alleged that certain deed of sale were null and
void ab initio because they are simulated.
They said that:
a. Firstly, there was no actual valid consideration for the deeds of sale xxx over the properties in litis;
b. Secondly, assuming that there was consideration in the sums reflected in the questioned deeds, the
properties are more than three-fold times more valuable than the measly sums appearing therein;
c. Thirdly, the deeds of sale do not reflect and express the true intent of the parties (vendors and vendees);
and
d. Fourthly, the purported sale of the properties in litis was the result of a deliberate conspiracy designed to
unjustly deprive the rest of the compulsory heirs (plaintiffs herein) of their legitime.

Defendants, on the other hand aver:


(1) That plaintiffs do not have a cause of action against them as well as the requisite standing and interest to
assail their titles over the properties in litis;
(2) That the sales were with sufficient considerations and made by defendants parents voluntarily, in good
faith, and with full knowledge of the consequences of their deeds of sale; and
(3) That the certificates of title were issued with sufficient factual and legal basis.
RTC ruled in favor of the defendants (respondents in this case) and dismissed the complaint. Upon appeal,
the CA upheld RTCs ruling.
ISSUES:
1. Whether the Deeds of Sale are void for lack of consideration. NO
2. Whether the Deeds of Sale are void for gross inadequacy of price. NO
HELD:
1st issue: There was a consideration.
If there is a meeting of the minds of the parties as to the price, the contract of sale is valid, despite the
manner of payment, or even the breach of that manner of payment. If the real price is not stated in the
contract, then the contract of sale is valid but subject to reformation. If there is no meeting of the minds of
the parties as to the price, because the price stipulated in the contract is simulated, then the contract is void.
Article 1471 of the Civil Code states that if the price in a contract of sale is simulated, the sale is void.
It is not the act of payment of price that determines the validity of a contract of sale.
Payment of the price has nothing to do with the perfection of the contract. Payment of the price goes into
the performance of the contract. Failure to pay the consideration is different from lack of consideration. The
former results in a right to demand the fulfillment or cancellation of the obligation under an existing valid
contract while the latter prevents the existence of a valid contract.
Petitioners failed to show that the prices in the Deeds of Sale were absolutely simulated.
To prove simulation, petitioners presented Emma Joaquin Valdozs testimony stating that their father,
respondent Leonardo Joaquin, told her that he would transfer a lot to her through a deed of sale without
need for her payment of the purchase price. The trial court did not find the allegation of absolute simulation
of price credible.
Petitioners failure to prove absolute simulation of price is magnified by their lack of knowledge of their
respondent siblings financial capacity to buy the questioned lots. On the other hand, the Deeds of Sale
which petitioners presented as evidence plainly showed the cost of each lot sold. Not only did respondents
minds meet as to the purchase price, but the real price was also stated in the Deeds of Sale. As of the filing
of the complaint, respondent siblings have also fully paid the price to their respondent father.
2nd issue: The general rule is that inadequacy of consideration shall not invalidate a contract.
Articles 1355 of the Civil Code states:
Art. 1355. Except in cases specified by law, lesion or inadequacy of cause shall not invalidate a contract,
unless there has been fraud, mistake or undue influence. (Emphasis supplied)
Article 1470 of the Civil Code further provides:
Art. 1470. Gross inadequacy of price does not affect a contract of sale, except as may indicate a defect in
the consent, or that the parties really intended a donation or some other act or contract. (Emphasis
supplied)
Petitioners failed to prove any of the instances mentioned in Articles 1355 and 1470 of the Civil Code which
would invalidate, or even affect, the Deeds of Sale. Indeed, there is no requirement that the price be equal
to the exact value of the subject matter of sale. All the respondents believed that they received the
commutative value of what they gave.
Ruling: In the instant case, the trial court found that the lots were sold for a valid consideration, and that the
defendant children actually paid the purchase price stipulated in their respective Deeds of Sale. Actual

payment of the purchase price by the buyer to the seller is a factual finding that is now conclusive upon us.
WHEREFORE, we AFFIRM the decision of the Court of Appeals in toto.

MARIQUITA MACAPAGAL vs. CATALINA O. REMORIN, CORAZON CALUZABAMRUNGCHEEP, and LAURELIA CALUZA-VALENCIANO
THE FACTS:
Lots 24 and 25 were registered in the name of Candido Caluza under Transfer Certificate of Title (TCT) No.
160544. Purificacion Arce-Caluza (Purificacion) is his second wife. Corazon Caluza-Bamrungcheep
(Corazon) is his legally adopted daughter during his first marriage. After Candido died in 1981, Corazon and
Purificacion executed a Deed of Extrajudicial Settlement adjudicating between themselves the properties of
Candido, as the latter's surviving heirs.
Lots 24 and 25, together with Lot 23, which was registered in Candido's name, were adjudicated to Corazon.
Purificacion got Candido's land in Bulacan. However, administration of Lots 23, 24 and 25 were entrusted to
Purificacion by Corazon as she had to leave for Thailand after her marriage to a Thai.
Unknown to Corazon, Purificacion executed an Affidavit of Loss alleging that the TCTs of Lots No 23, 24 and
25 were lost and could no longer be found. She filed a petition for the issuance of new owner's duplicates of
title alleging that she was her deceased husband's sole heir. The petition was granted and new TCTs were
issued in Purificacion's name. Purificacion then sold the lots to Catalina Remorin (Catalina) and Catalina
mortgaged Lots 24 and 25 to L & R Lending Corp.
Corazon filed a complaint for reconveyance and damages against Purificacion and Catalina upon discovery
of sale. Plaintiff alleged that the two defendants connived with each other in transferring the three lots in
their names through simulated sales. Corazon likewise filed a criminal complaint for falsification and perjury
against the two.
Catalina executed a Deed of Transfer, signed by Purificacion as witness, admitting the wrong they did in
illegally transferring the lots in their names and acknowledging Corazon to be the rightful owner under the
Deed of Extrajudicial Settlement. Corazon presented the Deed of Transfer before the Register of Deeds of
Quezon City and Catalina's TCT over Lots 24 and 25 was cancelled and a TCT was issued in Corazon's
name.
Prior thereto, however, Catalina mortgaged Lots 24 and 25 to respondent Laurelia Caluza-Valenciano
(Laurelia) to pay off her mortgage indebtedness to L & R Lending Corporation. The inscription of the
mortgage in favor of Laurelia was carried over to Corazon's TCT.
-Corazon, Purificacion, Catalina, and Laurelia executed a Memorandum of Agreement to settle Civil Case. It
stipulated that Corazon cedes and grants unto and in favor of Purificacion full ownership and other real
rights over the southernmost apartment as well as the portion of the lot occupied thereby subject to the
condition that Purificacion shall assume satisfaction of the mortgage debt contracted by Catalina in favor of
Laurelia and shall cause transfer of said annotation to the title to be issued in her (Purificacion's) name; and
furthermore that any and all expenses for segregation survey, re-titling and annotation of said mortgage shall
be shouldered by said Purificacion Arce-Caluza;
Before the agreement could be implemented, Purificacion died. Consequently, another compromise
agreement was executed stating that Corazon and Catalina agreed that title to the southernmost apartment
as well as the portion of the lot occupied thereby shall be transferred direct to its interested buyer with
defendant Catalina assuming and paying (from the proceeds of the sale) her mortgage obligation with
Laurelia; any and all expenses for segregation survey, re-titling, capital gains taxes and those connected
with the annotation and/or release of said mortgage should now be shouldered by defendant Catalina O.
Remorin. Corazon then sold the subject Lot to Laurelia by virtue of a deed entitled "Sale of Unsegregated
Portion of Land." However, Catalina also sold the same lot to Macapagal claiming to be authorized under the
Compromise Agreement. Macapagal sought to nullify the sale executed by Corazon in favor of Laurelia and
to declare valid the one executed by Catalina in her favor.
RTC rendered judgment in favor of petitioner. Corazon and Laurelia appealed to the Court of Appeals which
reversed the decision of the trial court.

Macapagals contention: the sale executed by Catalina in her favor should prevail over the one executed by
Corazon in favor of Laurelia, as Catalina was the one authorized to sell the disputed property under the
Compromise Agreement
Respondents contention: Corazon, the registered owner of the disputed property, did not give Catalina
authority to sell the lot. It was provided in the Agreement that Catalina shall pay off her mortgage obligation
and incidental expenses from the proceeds of the sale only to reassure Catalina that her obligation would be
paid in the event that Corazon sells the property.
ISSUE: WON Catalina was authorized to sell the land as provided by their Compromise Agreement.
RULING:
The Compromise Agreement dated September 9, 1988 cannot be taken as a waiver of Corazon's authority
to sell and grant thereof to Catalina considering that the Agreement merely provided that Catalina pay off her
mortgage obligation and incidental expenses from the proceeds of the sale. Although it was imperative, as
part of the compromise, that the money come from the proceeds of the sale, it was not expressly stated, nor
did it necessarily mean, that Catalina herself be the one to directly sell the property. Authority to sell must be
couched in clear and unmistakable language.
Moreover, intent to give Catalina authority to sell may not be easily attributed to Corazon considering that
the latter had to file the reconveyance case as a result of Purificacion's and Catalina's acts of transferring
the disputed lot in their names.
In contract interpretation, analysis is not to be limited to the words used in the contract, as they may not
accurately reflect the parties' true intent. If the words of the contract appear to be contrary to the evident
intention as revealed by the circumstances, the latter shall prevail over the former.
The fact that the deed of sale between respondents Corazon and Laurelia did not accurately reflect the true
consideration thereof is not cause for declaration of its nullity. When the parties intended to be bound by the
contract except that it did not reflect the actual purchase price of the property, there is only a relative
simulation of the contract which remains valid and enforceable. It cannot be declared null and void since it
does not fall under the category of an absolutely simulated or fictitious contract. The contract of sale is valid
but subject to reformation.
Petition denied.

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