Title
Clemente vs. Court of Appeals
Case
G.R. No. 175483
Decision Date
Oct 14, 2015
Adela simulated property transfers to grandsons, later sold to granddaughter Valentina. Courts ruled sales void due to simulation, lack of consideration, and no intent to transfer ownership.

Case Summary (G.R. No. 175483)

Petitioner

Valentina S. Clemente executed and registered deeds of absolute sale over Lots 32, 34 and later 35‑B, and obtained Transfer Certificates of Title in her name for Lots 32 and 34 (TCT Nos. 19811, 19809) after registering the purported April 25, 1989 sales. She also held an SPA from Adela granting extensive powers to administer and manage Adela’s properties.

Respondents and Claim

Private respondents (Adela’s children and heirs) challenged the validity of the deeds of absolute sale by filing a complaint for reconveyance, alleging the deeds were simulated and lacking consideration, and asking for cancellation of titles and reconveyance to Adela’s estate.

Key Dates

Relevant chronological facts: prior simulated transfers in 1985 and 1987; reconveyances executed April 18, 1989; deeds of absolute sale and SPA executed April 25, 1989; registration of deeds and issuance of TCTs in 1989 and October 1990; Adela’s death January 14, 1990; complaint filed July 9, 1990; trial court decision February 26, 2001; Court of Appeals decision August 23, 2005; denial of reconsideration November 15, 2006; Supreme Court decision denying the petition (petitioner’s Rule 45 appeal) (decision rendered 2015, thus governed by the 1987 Constitution and applicable post‑1987 rules).

Applicable Law and Legal Sources

Primary governing norms: 1987 Philippine Constitution as the constitutional framework (decision date post‑1990), the Civil Code provisions on contracts and trusts (Arts. 1305, 1318, 1345, 1453, 1471) and jurisprudence interpreting simulation, consent, and consideration; Rules of Court including Rule 45 (petition for review on certiorari – questions of law only) and Rule 130, Section 9 on evidence of written agreements.

Facts — Possession and Prior Simulated Transfers

Adela owned and permitted family members to occupy and use the properties. In 1985 and 1987 she caused simulated transfers of Lots 32 and 34 to other grandchildren (Carlos Jr. and Dennis), which were not intended to vest real title and were later reconveyed on April 18, 1989. The parties agree those earlier transfers were sham transactions intended to serve non‑conveyancing purposes.

Facts — April 25, 1989 Instruments and Subsequent Conduct

On April 25, 1989, Adela executed separate deeds of absolute sale transferring Lots 32 & 34 to petitioner (stating a price of P250,000.00) and Lot 35‑B to petitioner (stating P60,000.00). On the same day Adela executed an SPA appointing petitioner administratrix of her properties. Petitioner and Adela then left for the United States on April 29, 1989. Titles in petitioner’s name were registered thereafter; Adela died January 14, 1990.

Procedural History

Private respondents filed a complaint for reconveyance (Civil Case No. Q‑90‑6035) after learning of the transfers and petitioner’s attempt to eject family members. The RTC rendered judgment nullifying the April 25, 1989 deeds, ordered cancellation of TCT Nos. 19809, 19811 and 26558, and ordered petitioner to execute reconveyances. The CA affirmed the RTC’s judgment but deleted the RTC’s finding of an implied trust. Petitioner sought relief via a Rule 45 petition to the Supreme Court.

Issues Raised on Appeal

Primary legal issue: whether the CA erred in affirming the RTC’s factual and legal conclusion that the deeds of absolute sale were simulated and without consideration, rendering them void and inexistent. Secondary issues raised by petitioner included challenges to the lower courts’ reliance on prior simulated transfers, various letters, the SPA’s consistency with ownership claims, the absence of demonstrable acts of ownership by petitioner, and the fact that only some heirs contested the sale.

Standard of Review — Rule 45 Limitations

The Supreme Court emphasized the procedural constraint that a Rule 45 petition brings only questions of law. Disputes over factual findings — including the genuineness of documents, credibility of witnesses, and inferences from contemporaneous conduct — are ordinarily beyond the scope of Rule 45. Exceptions to this limitation exist (e.g., findings grounded on speculation, manifest error, grave abuse of discretion, or misapprehension of facts), but the Court found no such exception on the record.

Supreme Court’s Approach to Evidence and Review

Although the petition was limited to questions of law, the Court nonetheless reviewed the record to ensure no grave abuse or misapprehension existed. The Court concluded that the RTC’s factual findings, as affirmed by the CA, were supported by credible evidence and were not the subject of the exceptions that would permit factual re‑examination under Rule 45.

Legal Analysis — Simulation and Absence of Consent

The Court applied the Civil Code’s doctrine on contracts (Arts. 1305, 1318) and the concept of simulation (Art. 1345). A contract is void when an essential element such as consent is absent. Absolute simulation occurs when parties do not intend the instrument to produce legal effects; such instruments are void and “inexistent.” The Court held that the deeds were absolutely simulated because the parties did not intend to alter the juridical relation between Adela and her family; contemporaneous and subsequent acts demonstrated that Adela retained dominion and that petitioner did not exercise independent ownership.

Evidence Supporting the Finding of Simulation

The Court identified several cumulative circumstances supporting simulation: Adela’s contemporaneous letters indicating intent to reserve or consolidate ownership in other heirs; petitioner’s own admissions in a letter that she had “no ‘say’” over the properties and was following Adela’s orders; Adela’s letter instructing relatives to occupy the “big house” rent free after the purported sale; petitioner’s submission to Adela’s continued control; and the prior pattern of simulated transfers to other grandchildren. The SPA executed the same day as the deeds, which conferred broad administrative powers on petitioner, further contradicted the claim that ownership had been genuinely transferred.

Legal Analysis — Lack of Consideration

The Court analyzed Article 1471 (price simulated renders sale void) and factual indicators that the declared purchase prices were not actually paid. It noted alterations in the instruments (different font), discrepancies between duplicate originals as to price entries, and the absence of documentary proof or credible testimony of payment. Because no consideration was shown to have passed, the asserted sales were void for lack of price actually paid.

Implied (Resulting) Trust Doctrine Addressed

The RTC had found a resulting trust under Article 1453; the CA deleted that finding and the Supreme Court affirmed deletion. The Court reasoned that implied trusts presuppose a valid transfer of legal title which gives rise to an equitable obligation. Where the instruments are absolutely simulated and therefore void ab initio, no legal title or transaction exists to support a resulting trust. In short, an inexistent instrument cannot generate an implied trust.

Applicatio

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