G.R. No. 219772 - Office of the Ombudsman vs. Mendoza

Petitioner, Dr. Lorna C. Formaran, is the owner of a parcel of land donated intervivos on June 25, 1967, by her uncle and aunt, spouses Melquiades Barraca and Praxedes Casidsid.
The donated property was duly declared for taxation purposes and consistently had its realty taxes paid by the petitioner.
The land was later mortgaged to Aklan Development Bank by the petitioner on May 18, 1978 to secure a loan.

On August 12, 1967 – less than two months after the donation – petitioner executed a Deed of Absolute Sale, allegedly transferring one-half of the donated parcel to defendant Glenda B. Ong.
The sale transaction was initiated at the request of defendant Glenda, who purportedly required collateral for a bank loan to purchase a dental chair, despite the fact that she already possessed one and the cost of such equipment was relatively low.
The deed was executed without any monetary consideration, raising serious doubts regarding its genuineness, and is argued to be entirely fictitious or simulated.
Although the Deed of Sale was notarized, petitioner did not follow the usual formalities such as appearing before the Notary Public at the time of its acknowledgment on November 9, 1967.

Following the execution of the deed, petitioner continued in actual possession of the land and even mortgaged it later, while defendant Glenda, despite having the document, did not exercise immediate possession.
Defendant Glenda later registered the deed on May 25, 1991, approximately twenty-four years after its execution, and declared the land for taxation purposes in her name, evidencing an irregular delay.
In 1996, defendant Glenda filed an unlawful detainer case against the petitioner, which resulted in the petitioner suffering emotional distress and reputational harm.
Petitioner initiated an action for annulment of the Deed of Absolute Sale (Civil Case No. 5398) before the Regional Trial Court (RTC) of Kalibo, Aklan, leading to a trial court decision on December 3, 1999, in her favor, declaring the deed null and void as a simulated contract.

The trial court decision in Civil Case No. 5398 declared the simulated Deed of Absolute Sale void and ordered the cancellation of defendant Glenda’s Tax Declaration along with the award of attorney’s fees and litigation expenses.
Defendant Glenda, along with Solomon S. Ong, appealed the decision to the Court of Appeals (CA), which on August 30, 2007, reversed and set aside the lower court’s decision, ordering petitioner to vacate the land and restore it to the defendants.
Petitioner elevated the case on appeal by certiorari under Rule 45 of the Revised Rules of Court, arguing that the CA misappreciated the facts, especially the simulated nature of the sale contained in the Deed of Absolute Sale.

Whether the Deed of Absolute Sale executed on August 12, 1967, constitutes a true conveyance of property or is merely a simulated transaction void from the start.
Whether the absence of any monetary consideration and other countervailing acts (such as immediate possession, registration, and payment of realty taxes by defendant) undermine the validity of the sale.

Whether the petitioner’s consistent actual possession, declaration for taxation purposes, and utilization of the property are sufficient to establish her title against the consequences of the simulated sale.
Whether the late registration (in 1991) of the sale, despite earlier reliance on the donated property, further evidences the absence of a bona fide intent to transfer ownership.

Whether the simulation of the sale, as argued by petitioner, inherently voids the transfer, as no valid consideration or intent was present.
Whether the notarial formalities (which normally impart the presumption of regularity) may be disregarded in the face of manifest bad faith and absence of any substantive agreement.