Republic of the
Supreme Court
SECOND DIVISION
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JESUS
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G.R.
No. 175994 |
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CAMPOS-BAUTISTA, |
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Petitioners, |
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- versus - |
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Present: |
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NENITA
BUENVENIDA PASTRANA, |
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ROGER
BUENVENIDA, |
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CARPIO,* J., Chairperson, |
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SONIA
BUENVENIDA, |
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LEONARDO-DE
CASTRO,** |
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TEDDY
BUENVENIDA, |
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BRION, |
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VICTOR
BUENVENIDA, |
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HARRY
BUENVENIDA, |
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ABAD,
JJ. |
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MILDRED
BUENVENIDA, |
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MANOLITO
BUENVENIDA |
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and
DAISY BUENVENIDA, |
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represented
by their Attorney-in-Fact |
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Promulgated: |
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CARLITO
BUENVENIDA,*** |
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Respondents. |
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December
8, 2009 |
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D e c i
s i o n
It sometimes happens that a creditor, after securing a judgment against
a debtor, finds that the debtor had transferred all his properties to another
leaving nothing to satisfy the obligation to the creditor. In this petition for review on certiorari,[1] petitioners ask us to set aside the November 23, 2005 Decision[2] of the Court of Appeals (CA) in CA-G.R. CV No. 68731 declaring as null
the sale of several parcels of land made by their parents in their favor, for
being absolutely simulated transactions.
Also assailed is the
Factual
antecedents
This is the
third case between essentially the same parties and the second among those
cases to reach this Court on appeal, spanning a period of close to three
decades.
The first case
arose from the refusal of Carlito Campos (Carlito), the father of herein
petitioners, to surrender the possession of a fishpond he leased from
respondents’ mother, Salvacion Buenvenida, despite the expiration of their
contract of lease in 1980. Alleging that
he was an agricultural lessee, Carlito filed an agrarian case docketed as CAR Case No. 1196 (Agrarian Case) against his
lessor. After trial, the
While the appeal
in the Agrarian Case was pending before the CA, herein respondents filed the
second case, Civil Case No. V-5417, against Carlito
for Recovery of Possession and Damages with Preliminary Mandatory Injunction (Possession
Case) involving the same fishpond subject of the earlier agrarian case. On November 27, 1990, the Regional Trial
Court of Roxas City, Branch 16, rendered a Decision[4]
finding Carlito to have retained possession of the fishpond notwithstanding the
expiration of the contract of lease and ordering him to pay rentals, the value
of the produce and damages to the herein respondents. The Decision became final and executory and a
Writ of Execution[5]
was issued on
During the pendency of the Agrarian Case, as well
as prior to the filing of the Possession Case, Carlito was the registered owner
of the following properties:
1. Residential Lots 3715-A and 3715-B-2 covered by Transfer Certificates of Title Nos. 18205[7] and 18417,[8] respectively and
2. Agricultural Lots 850 and 852 covered by Original Certificates of Title
Nos. P-9199[9] and P-9200,[10] respectively.
When the respondents were about to levy these
properties to satisfy the judgment in the Possession Case, they discovered that
spouses Carlito and Margarita Campos transferred these lots to their children
Rosemarie and Jesus Campos, herein petitioners, by virtue of Deeds of Absolute
Sale dated October 18, 1985[11]
and November 2, 1988.[12] Specifically, spouses Campos sold the
residential lots (Lots 3715-A and 3715-B-2), with a total area of 1,393 square
meters, to their daughter Rosemarie for P7,000.00 and the agricultural
lots (Lots 850 and 852) with a combined area of 7,972 square meters, to their
son Jesus for P5,600.00.
Proceedings
before the Regional Trial Court –
Civil Case No.
V-7028
On
V-7028 (Nullity of Sale Case),[13]
subject of this appeal, seeking to declare as null the aforesaid deeds of sale
and the transfer certificates of title issued pursuant thereto. They alleged that the contracts of sale
between spouses
In their Answer with Counterclaim,[14]
spouses
On
In the Resolution of this case
the issue is whether or not the spouses Carlito Campos and Margarita Arduo,
sensing that an unfavorable judgment might be rendered against them in Civil
Case No. V-5417 filed in Branch 16 on July 17, 1987 by the same plaintiffs for
Recovery of Possession and Damages with Preliminary Mandatory Injunction, in
evident bad faith and wanton disregard of the law, maliciously and
fraudulently, executed a purely fictitious and simulated sale of their
properties thereby ceding and transferring their ownership thereto to their
children Rosemarie Campos-Bautista and Jesus Campos.
A close scrutiny of the
defendants’ documentary exhibits and testimonies showed that as early as 1981
defendant Jesus Campos was already leasing a fishpond in Brgy. Majanlud,
Sapi-an, Capiz from Victorino Jumpay and defendant Rosemarie Campos was engaged
in the sari-sari store business starting 1985 so that they were able to
purchase the properties of their parents out of their profits derived
therefrom.
The Deed of Absolute
It can readily [be] gleaned from
the records that Civil Case No. V-5417 was filed on
WHEREFORE, the complaint of the
plaintiffs against the defendants is DISMISSED.
Their claim for damages is likewise DISMISSED. The counter-claim of the defendants must also
be DISMISSED as the case was not filed in evident bad faith and with malicious
intent.
SO ORDERED.[16]
Proceedings
before the Court of Appeals
Upon review of the evidence presented, the CA found
that the conveyances were made in 1990, and not in 1985 or 1988, or just before
their actual registration with the Registry of Deeds, evidently to avoid the
properties from being attached or levied upon by the respondents. The CA likewise noted that the zonal value of
the subject properties were much higher than the value for which they were
actually sold. The appellate court
further observed that despite the sales, spouses
On these bases, the CA ruled that the assailed
contracts of sale were indeed absolutely simulated transactions and declared
the same to be void ab initio. The dispositive portion of the Decision of
the CA reads:
WHEREFORE,
the instant appeal is GRANTED. The
decision of the
SO ORDERED.
Only petitioners moved for reconsideration[17]
but the CA denied the same.[18]
Issues
Hence, this petition for review on certiorari
raising the following errors:
I.
THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN
APPLYING ARTICLE 1409, CIVIL CODE, INSTEAD OF ARTIcLE 1381 (3), CIVIL CODE, AND
IN SPECULATING THAT A CAUSE OF ACTION OF SUPPOSED SALE IN FRAUD OF CREDITORS
EXISTS DESPITE NON-EXHAUSTION OF REMEDIES TO ENFORCE THE JUDGMENT IN CIVIL CASE
NO. V-5417.
II.
THE COURT OF APPEALS COMMITTED AN ERROR OF LAW
OVERLOOKING THAT THE CAUSE OF ACTION HAD PRESCRIBED, THE COMPLAINT HAVING BEEN
FILED AFTER SEVEN (7) YEARS OR ONLY ON
III.
THE COURT OF APPEALS ERRONEOUSLY ANCHORED ITS IMPUGNED
JUDGMENT ON MISAPPREHENSION OF FACTS THAT THE
IV.
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION IN CASTING ASIDE OVERWHELMING EVIDENCE DULY APPRECIATED BY THE TRIAL
COURT THAT PETITIONERS ARE BUYERS IN GOOD FAITH AND FOR VALUE, WHO EXERCISED
DOMINION OVER THE SUBJECT LOTS, WHICH IF PROPERLY CONSIDERED, SHALL WARRANT THE
SINGULAR CONCLUSION THAT THE SALE AND TRANSFER OF TITLES ARE VALID.[19]
Petitioners’ arguments
Petitioners assail the application of Article 1409[20]
of the Civil Code on void
contracts as against Article 1381(3)[21]
of the Civil Code on rescissible contracts in fraud of creditors, considering
that the questioned conveyances executed by the spouses
Respondents’ arguments
Respondents argue that the application of Article
1409 on void contracts was a natural and logical consequence of the CA’s
finding that subject deeds of sale were absolutely simulated and fictitious,
consistent with the nature of the respondents’ cause of action which was for
declaration of nullity of said contracts and the transfer certificates of titles
issued pursuant thereto.[24] Respondents also stressed that the CA’s
finding is conclusive upon us and that only questions of law may be raised in a
petition for review on certiorari under Rule 45 of the Rules of Court.[25]
Our
Ruling
The petition lacks merit.
Well-settled is the rule that this Court is not a
trier of facts. When supported by substantial evidence, the findings of fact of
the CA are conclusive and binding, and are not reviewable by this Court, unless
the case falls under any of the following recognized exceptions:
(1) When
the conclusion is a finding grounded entirely on speculation, surmises and
conjectures;
(2) When
the inference made is manifestly mistaken, absurd or impossible;
(3) Where
there is a grave abuse of discretion;
(4) When
the judgment is based on a misappreciation of facts;
(5) When
the findings of fact are conflicting;
(6) When
the CA in making its findings, went beyond the issues of the case and the same
is contrary to the admissions of both appellant and appellee;
(7) When
the findings are contrary to those of the trial court;
(8) When
the findings of fact are conclusions without citation of specific evidence on
which they are based;
(9) When
the facts set forth in the petition as well as in the petitioners’ main and
reply briefs are not disputed by the respondents; and
(10) When the findings of fact of the CA are
premised on the supposed absence of evidence and contradicted by the evidence
on record.
None of these exceptions is present in this
case. We find that the Decision of the
CA is supported by the required quantum of evidence.
The subject Deeds of Absolute
The CA correctly
held that the assailed Deeds of Absolute Sale were executed when the Possession
Case was already pending, evidently to avoid the properties subject thereof
from being attached or levied upon by the respondents. While the sales in question transpired on
We also agree
with the findings of the CA that petitioners failed to explain the reasons for
the delay in the registration of the sale, leading the appellate court to conclude
that the conveyances were made only in 1990 or sometime just before their
actual registration and that the corresponding Deeds of Absolute Sale were
antedated. This conclusion is bolstered
by the fact that the supposed notary public before whom the deeds of sale were
acknowledged had no valid notarial commission at the time of the notarization
of said documents.[26]
Indeed, the Deeds of Absolute Sale were executed for the purpose of
putting the lots in question beyond the reach of creditors. First, the Deeds of Absolute Sale were registered
exactly one month apart from each other and about another one month from the time
of the promulgation of the judgment in the Possession Case. The Deeds of Absolute Sale were antedated and
that the same were executed when the Possession Case was already pending.
Second, there
was a wide disparity in the alleged consideration specified in the Deeds of
Absolute Sale and the actual zonal valuation of the subject properties as per
the BIR Certification, as follows:
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Consideration specified in Deed of Absolute Sale |
Market Value as per Tax Declaration |
Computed Zonal Valuation (BIR Certification) |
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Residential Lots: From
Spouses Campos to daughter, Rosemarie Campos |
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Agricultural Lots: From
Spouses Campos to son, Jesus Campos |
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As correctly noted by the CA, the appraised value
of the properties subject of this controversy may be lower at the time of the
sale in 1990 but it could not go lower than P7,000.00 and P5,600.00. We likewise find the considerations involved
in the assailed contracts of sale to be inadequate considering the market values
presented in the tax declaration and in the BIR zonal valuation.
Third, we cannot believe that the buyer of the
1,393-square meter[31]
residential land could not recall the exact area of the two lots she purchased. In her cross-examination, petitioner
Rosemarie Campos stated:
Q: Can you tell us the total area of those two (2) lots that they sold to you?
A: It consists of One Thousand (1,000) Square Meters.[32]
x x x x
Q: By the way, for how much did you buy this [piece] of land consisting of 1,000 square meters?
A: Seven
Thousand Pesos (P7,000.00) Your Honor.[33]
Fourth, it appears on record that the money
judgment in the Possession Case has not been discharged with. Per Sheriff’s Service Return dated
Finally, spouses
In Suntay v.
Court of Appeals,[38]
we held that:
The failure of the late Rafael to
take exclusive possession of the property allegedly sold to him is a clear
badge of fraud. The fact that,
notwithstanding the title transfer, Federico remained in actual possession,
cultivation and occupation of the disputed lot from the time the deed of sale
was executed until the present, is a circumstance which is unmistakably added
proof of the fictitiousness of the said transfer, the same being contrary to
the principle of ownership.
While in Spouses Santiago v. Court of Appeals,[39] we
held that “the failure of petitioners to take exclusive possession of the
property allegedly sold to them, or in the alternative, to collect rentals from
the alleged vendor x x x is contrary to the principle of ownership and a clear
badge of simulation that renders the whole transaction void and without force
and effect, pursuant to Article 1409 of the Civil Code”.
The issuance
of transfer certificates of title to petitioners did not vest upon them
ownership of the properties.
The fact that petitioners were able to secure
titles in their names did not operate to vest upon them ownership over the
subject properties. That act has never
been recognized as a mode of acquiring ownership.[40]
The
In the instant case, petitioner Rosemarie Campos supposedly
bought the residential properties in 1985 but did not have the assailed Deed of
Absolute Sale registered with the proper Registry of Deeds for more than five
years, or until a month before the promulgation of the judgment in the
Possession Case. Hence, we affirm the
finding of the CA that the purported deed was antedated. Moreover, her failure
to take exclusive possession of the property allegedly sold, or, alternatively,
to collect rentals is contrary to the principle of ownership and a clear badge
of simulation. On these grounds, we
cannot hold that Rosemarie Campos was an innocent buyer for value.
Likewise, petitioner Jesus Campos supposedly bought
the rice land from his parents in 1988 but did not have the assailed Deed of
Absolute Sale registered with the proper Registry of Deeds for more than two
years, or until two months before the promulgation of the judgment in the
Possession Case. Thus, we likewise affirm
the finding of the CA that the purported deed was antedated. In addition, on cross, he confirmed that he
had knowledge of the prior pending cases when he supposedly purchased his
parents’ rice land stating that:
Q: You never knew that your parents and the plaintiffs in this case have cases in the past prior to this case now, is that right?
A: Yes, sir. I knew about it.
Q: And in spite of your knowledge, that there was a pending case between your parents and the plaintiffs here, you still purchased these two (2) lots 850 and 852 from your parents, is that what you are telling us?
A: All I knew was that, that case was a different case from the subject matter then [sic] the lot now in question.[42]
On these findings of fact, petitioner Jesus Campos
cannot be considered as an innocent buyer and for value.
Since both the transferees, Rosemarie and Jesus
Campos, are not innocent purchasers for value, the subsequent registration
procured by the presentation of the void deeds of absolute sale is likewise
null and void.
The action for the declaration of the
inexistence of the assailed Deeds of Absolute
Petitioners argue that respondents’ cause of
action had prescribed when they filed the Nullity of the Sale Case on
We cannot agree. As discussed above, the sale of
subject properties to herein petitioners are null and void. And under Article 1410 of the Civil Code, an
action or defense for the declaration of the inexistence of a contract is
imprescriptible. Hence, petitioners’
contention that respondents’ cause of action is already barred by prescription
is without legal basis.
Since the assailed Deeds of Absolute
Finally, petitioners’ argument that the applicable
law in this case is Article 1381(3) of the Civil Code on rescissible contracts and
not Article 1409 on void contracts is not a question of first impression. This issue had already been settled several
decades ago when we held that “an action to rescind is founded upon and
presupposes the existence of a contract”.[43]
A contract which is null and void is no contract
at all and hence could not be the subject of rescission.[44]
In the instant case, we have declared the Deeds of
Absolute Sale to be fictitious and inexistent for being absolutely simulated
contracts. It is true that the CA cited
instances that may constitute badges of fraud under Article 1387 of the Civil
Code on rescissible contracts. But there
is nothing else in the appealed decision to indicate that rescission was
contemplated under the said provision of the Civil Code. The aforementioned badges must have been
considered merely as grounds for holding that the sale is fictitious. Consequently, we find that the CA properly
applied the governing law over the matter under consideration which is Article
1409 of the Civil Code on void or inexistent contracts.
WHEREFORE, the petition is DENIED. Costs
against petitioners.
SO ORDERED.
MARIANO
C.
Associate
Justice
WE
CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
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TERESITA J. LEONARDO-DE
CASTRO Associate Justice |
ARTURO D. BRION Associate Justice |
ROBERTO A. ABAD
Associate Justice
ATTESTATION
I
attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
ANTONIO
T. CARPIO
Associate Justice
Chairperson, Second Division
C E R T I F I C A T I O N
Pursuant
to Section 13, Article VIII of the Constitution, and the Division Chairperson’s
attestation, it is hereby certified that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice
* Per
Special Order No. 775 dated
** Additional
member per Special Order No. 776 dated
*** The Court of Appeals was deleted as co-respondent from the title pursuant to Section 4, Rule 45 of the Rules of Court.
[1] Rollo,
pp. 4-29.
[2] CA rollo,
pp. 144-154; penned by Associate Justice Ramon M. Bato, Jr. and concurred in by
Associate Justices Isaias P. Dicdican and Apolinario D. Bruselas, Jr.
[3]
[4] Records,
pp. 195-200; penned by Judge Manuel E. Autajay.
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17] CA rollo, pp. 164-185.
[18]
[19] Rollo, pp. 11-12.
[20] Article 1409 of
the Civil Code provides:
The following contracts
are inexistent and void from the beginning:
x x x x
(2) Those which are absolutely simulated or
fictitious;
x x x x
These contracts cannot
be ratified. Neither can the right to
set up the defense of illegality be waived.
[21] Article 1381 of
the Civil Code provides:
The following contracts
are rescissible:
x x x x
(3) Those undertaken in
fraud of creditors when the latter cannot in any other manner collect the
claims due them.
x x x x
[22] Rollo, p. 127.
[23]
[24]
[25] Id at 107-10.
[26] Records, pp. 226-227.
[27] Rollo,
p. 37; Aggregate of the market value of P24,780.00 for P58,800.00 for
[28] P300/square
meter.
[29] Id.
at 38; Aggregate of the market value of P14,698.43 for Lot 850 and P10,301.76
for Lot 852.
[30] P5/square
meter.
[31]
[32] TSN,
[33]
[34] Rollo,
p. 38.
[35]
[36]
[37] TSN,
[38] 321
Phil. 809, 832 (1995).
[39] 343 Phil. 612,
622 (1997).
[40] Berico v. Court of Appeals, G.R. No. 96306,
[41] Spouses
[42] TSN,
[43] Onglengco v. Ozaeta, 70 Phil 43, 47 (1940).
[44] Perez v. Court of Appeals,
380 Phil. 592, 602 (2000).