Cabalu v. Tabu
REITERATIONFacts
The Antecedents: The case involves a 9,000 square meter lot, a portion of a larger property registered under TCT No. 16776 in the name of the late Faustina Maslum. Faustina died without children, leaving a holographic will distributing her property to her nephews and nieces. Her will was not probated. Domingo Laxamana, grandson of one of Faustina's heirs, Benjamin Laxamana, allegedly executed a Deed of Sale of Undivided Parcel of Land on March 5, 1975, selling his supposed 9,000 square meter share to Laureano Cabalu. On August 1, 1994, Faustina's heirs executed a Deed of Extra-Judicial Succession with Partition, adjudicating 9,000 square meters to Domingo. Domingo then sold 4,500 square meters of this share to Eleazar Tabamo on December 14, 1995. On May 7, 1996, the remaining 4,500 square meters were registered in Domingo's name under TCT No. 281353. Domingo died on August 4, 1996. Two months later, on October 8, 1996, a Deed of Absolute Sale purportedly executed by Domingo in favor of respondent Renato Tabu was registered, resulting in TCT No. 286484. This lot was later subdivided into TCT Nos. 291338 and 291339 in the name of respondent spouses Renato and Dolores Tabu. Procedural History: On January 15, 1999, Domingo's heirs filed an unlawful detainer case against petitioners, who were occupying the lot. The heirs won, and a writ of execution was issued. Subsequently, on February 4, 2002, petitioners filed a case for Declaration of Nullity of Deed of Absolute Sale, Quieting of Title, Reconveyance, etc., against respondent spouses. Petitioners claimed ownership based on the March 5, 1975 sale to Laureano Cabalu. Respondent spouses countered that the 1975 deed was void because Domingo was not yet the owner, and that Domingo was of unsound mind. The RTC dismissed the complaint, declaring the March 5, 1975 deed void for lack of capacity and the October 8, 1996 deed void as executed after Domingo's death. The RTC ordered the cancellation of Tabu's titles and the restoration of TCT No. 16776 to Faustina's name. Both parties appealed. The Court of Appeals (CA) affirmed the RTC's declaration of nullity of the March 5, 1975 deed, finding it simulated, but modified the ruling by deleting the declarations of nullity concerning the October 8, 1996 deed and the cancellation of Tabu's titles, reasoning that Domingo was an undisputed heir and the CA found him of sound mind at the time of the March 5, 1975 sale. The CA also erred in canceling TCT No. 266583 and ordering the restoration of TCT No. 16770. The Petition: Petitioners sought review, arguing the March 5, 1975 deed should be presumed valid and the CA erred in deleting the nullification of the October 8, 1996 deed.
Issue(s)
Whether the Deed of Sale of Undivided Parcel of Land dated March 5, 1975, executed by Domingo Laxamana in favor of Laureano Cabalu, is valid. Whether the Deed of Sale dated October 8, 1996, executed by Domingo Laxamana in favor of Renato Tabu, is null and void.
Ruling
The Supreme Court partially granted the petition. It declared the Deed of Absolute Sale dated March 5, 1975, null and void. It also declared the Deed of Absolute Sale dated October 8, 1996, and the resulting TCT Nos. 286484, 291338, and 291339, null and void and ordered their cancellation. TCT No. 281353 in the name of Domingo Laxamana was ordered restored, subject to partition by his lawful heirs.
Ratio Decidendi
On the validity of the March 5, 1975 Deed of Sale: The Court affirmed the CA's finding that the March 5, 1975 Deed of Sale was simulated and thus null and void. While petitioners invoked the presumption of regularity for public documents, this presumption was rebutted by evidence showing discrepancies in the notary public's details and the circumstances surrounding the deed's discovery. Furthermore, even if the deed were not simulated, it would still be void because, at the time of its execution, Domingo was not yet the owner of the property. His right was merely an inchoate hereditary right as an heir by representation of his deceased father, Benjamin, who was an heir of Faustina. The property formed part of Faustina's inheritance, and Domingo could not validly dispose of it before the partition and adjudication of his share. The Court cited Article 1347 of the Civil Code, which declares contracts concerning future inheritance void, except as provided by law. Domingo only became the owner of the 9,000 square meter lot on August 1, 1994, when the Deed of Extra-Judicial Succession with Partition was executed. On the validity of the October 8, 1996 Deed of Sale: The Court found the October 8, 1996 Deed of Absolute Sale to be null and void. The deed was purportedly executed by Domingo Laxamana in favor of Renato Tabu. However, the records clearly show that Domingo died on August 4, 1996, and the deed was executed more than two months after his death. A contract requires parties with contractual capacity at the time of its consummation. Since Domingo was already deceased at the time of the purported sale, he lacked the legal capacity to enter into any contract. Consequently, the sale to Renato Tabu produced no legal effects and transmitted no rights. The titles derived from this void deed, namely TCT No. 286484 and its derivative titles TCT Nos. 291338 and 291339, were also declared void and ordered cancelled. The CA erred in deleting this portion of the RTC's decision.
Main Doctrine
A deed of sale executed by a seller who is not yet the owner of the property, or whose ownership is merely an inchoate hereditary right, is void. Furthermore, a deed of sale executed after the death of the purported seller is also void for lack of contractual capacity.