Case Summary (G.R. No. 159665)
Factual Background
Filomeno Taghoy and Margarita Amit owned an 11,067-square meter parcel of land designated as Lot 3635-B, under Transfer Certificate of Title No. 6466. On August 6, 1975, they executed a special power of attorney in favor of Felixberto Tigol Jr., who subsequently mortgaged the property to secure a loan from the Philippine National Bank (PNB). After the death of Filomeno in 1976, Margarita and their seven children executed a Deed of Extrajudicial Settlement and Sale that adjudicated the land to the heirs, who then sold it to Felixberto and Rosita for P1,000. The heirs later confirmed the sale twice and executed joint affidavits declaring that the sale was without consideration and merely served to secure a loan.
RTC Ruling
The Regional Trial Court (RTC) found the sale absolutely simulated, stating that the confirmation deeds were only tools to facilitate a loan application. Hence, the RTC nullified the title held by the respondents and ordered the partition of the property, contingent upon the reimbursement for the amounts paid on the loan.
Court of Appeals Ruling
Upon appeal, the Court of Appeals (CA) reversed the RTC's decision. The CA relied on testimony from Margarita that confirmed the payment of the loan by the respondents and ruled that the contract was relatively simulated. As a result, the CA upheld the validity of the title in the name of the respondents.
The Petition
The petitioners contended that the heirs had no intention to divest themselves of their shares in the property since the sale lacked consideration, which was further substantiated by the respondents' affidavits. They argued that the payment of the PNB loan did not serve as valid consideration as the loan was unpaid at the time of the extrajudicial settlement.
The Case for the Respondents
The respondents argued that the Extrajudicial Settlement and Sale was a valid basis for their title registration and that their payment of the loan constituted sufficient consideration for the property transfer. They maintained that the execution of the joint affidavits was purely a matter of goodwill and not reflective of the actual agreement.
The Issue
The central issue in this case is whether the agreement regarding the sale of the property was absolutely or relatively simulated.
Our Ruling
The Court found the petitioners’ arguments substantial. It highlighted that an appellate court's mistaken inference allows for a factual review. The true intention of the parties, indicated through contemporary acts and wording, was that there was no genuine intent to convey ownership, thereby rendering the sale absolutely simulated. The joint aff
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Case Overview
- The petitioners, Anselmo Taghoy and the heirs of Vicenta T. Apa, filed a petition for review on certiorari to challenge the decision and resolution of the Court of Appeals (CA) in CA-G.R. CV No. 54385.
- The CA's decision reversed the Regional Trial Court's (RTC) ruling that nullified the respondents' title to a parcel of land and ordered its partition.
Factual Background
- Spouses Filomeno Taghoy and Margarita Amit owned an 11,067 square meter parcel of land in Lapu-Lapu City, Cebu, identified under TCT No. 6466.
- On August 6, 1975, they executed a special power of attorney appointing Felixberto Tigol, Jr. as their attorney-in-fact.
- Felixberto executed a mortgage on the property to secure a loan of P22,000 from the Philippine National Bank (PNB) on August 21, 1975, intended to support their children's shellcraft business.
- Filomeno died intestate on February 12, 1976. His widow Margarita and their children executed a Deed of Extrajudicial Settlement and Sale on July 27, 1979, selling the property to Felixberto and Rosita Tigol for P1,000.
- The heirs later confirmed the sale through two Deeds of Confirmation, but also executed joint affidavits stating that the sale was without consideration and merely a means to secure a loan.