Case Summary (G.R. No. 148376)
Procedural Posture
Petition for Review on Certiorari from the Court of Appeals’ February 15, 2001 decision reversing the Regional Trial Court of Dumaguete City, Branch 35. The CA held the April 19, 1990 Deed of Absolute Sale simulated and fictitious.
Facts
- In July 1971, Villaner acquired the land by deed of sale from his parents for ₱2,000.00, during his marriage to Justiniana.
- On April 19, 1990, Villaner signed a document in favor of his godson-nephew Leonardo for ₱10,000.00. Leonardo paid and took possession.
- On May 19, 1990, Leonardo sold the same property to Ramon Nicolas.
- In October 1993, Villaner sued to annul the sales, claiming he only agreed to lease the land for three years at ₱1,000.00 per hectare.
Issue
Whether the April 19, 1990 instrument was a valid deed of sale or a simulated lease, and if the subsequent chain of title is valid as to an acquitting purchaser in good faith.
Applicable Law
– 1987 Constitution (decided 2005)
– Civil Code: Articles on contracts (consent, simulation, burden of proof), co-ownership (Art. 493), legal redemption (Art. 1623)
– RA 6657 (Comprehensive Agrarian Reform Law) retention limits
Ruling
The petition is GRANTED. The CA decision is REVERSED and SET ASIDE. The deed of sale is declared valid insofar as it conveyed Villaner’s undivided one-half interest (vested at five-ninths of the whole property) to Leonardo and thence to Ramon Nicolas.
Reasoning
- Fraud and Simulation – Consent can be vitiated only by clear, convincing evidence. Villaner’s bare assertions of mistake or deceit were uncorroborated; notarial and witness testimony confirmed he read and signed a deed of sale.
- Adequacy of Consideration – Without evidence of fair market value on April 19, 1990, the ₱10,000.00 price cannot be deemed inadequate. An ocular inspection report showed poor soil and low productivity; adjoining land sold for even less per hectare.
- Rule 8, Section 8 – Failure to deny genuineness of the document under oath does not bar proof of fraud or mistake.
- Good-Faith Purchase – The land is unregistered; the good-faith purchaser rule under Torrens does not apply. Nicolas purchases at his peril, but no fraud was shown.
- Agrarian Reform – Only about 3–4 hectares were actually agricultural; far below the 5-hectare retention limit. No violation of RA 6657.
- Pari Delicto – Both parties
Case Syllabus (G.R. No. 148376)
Facts
- Respondent Villaner Acabal’s parents acquired an 18.15-hectare parcel in Barrio Tanglad, Manjuyod, Negros Oriental, under Tax Declaration No. 15856.
- By Deed of Absolute Sale dated July 6, 1971, Alejandro Acabal and Felicidad Balasabas sold the land to their son Villaner for ₱2,000; at that time he was married to Justiniana Lipajan.
- After Justiniana’s death, Villaner executed on April 19, 1990, a document conveying the same land purportedly as a Deed of Absolute Sale in favor of his godson-nephew Leonardo for ₱10,000.
- Villaner later asserted the April 19, 1990 document was a three-year Lease Contract at ₱1,000 per hectare, modeled on a 1976 lease he had signed with a prior lessee.
- Leonardo purportedly paid the ₱10,000 consideration and, as alleged owner, transferred the land to Ramon Nicolas on May 19, 1990.
Procedural History
- October 11, 1993 – Villaner filed before the Regional Trial Court (RTC) of Dumaguete City an action for annulment of the April 19, 1990 deeds against Leonardo and Nicolas.
- RTC Branch 35, August 8, 1996 – Dismissed the complaint in favor of Leonardo and Nicolas.
- Court of Appeals, February 15, 2001 – Reversed the RTC, holding the sale simulated and fictitious.
- Supreme Court, March 31, 2005 – Petitioners filed a certiorari petition to review the CA decision.
Issues
- Whether Villaner was legitimately deceived into signing a deed of sale instead of a lease contract.
- Whether the ₱10,000 purchase price was “unusually low and inadequate.”
- Whether Villaner’s failure to challenge Nicolas’s possession earlier barred his relief.
- Whether Nicolas qualified as a buyer in good faith.
- Whether Villaner’s claim of a lease contract, lacking any witness testimony, could prevail.
- Whether Rule 8, Section 8 of the Rules of Court barred Villaner’s challenges for failure to deny