Clemente v. Jalandoon
REITERATIONFacts
The Antecedents: Adela de Guzman Shotwell owned three parcels of land (Lots 32, 34, and 35-B) in Quezon City. She had previously executed simulated transfers of Lots 32 and 34 to her grandsons, Carlos Jr. and Dennis, with the understanding that they would reconvey the lots upon request. On April 18, 1989, Adela requested Carlos Jr. and Dennis to execute a deed of reconveyance. On April 25, 1989, Adela executed two deeds of absolute sale over Lots 32 and 34 in favor of her granddaughter, Valentina S. Clemente (petitioner), for a stated price of P250,000.00. On the same day, Adela also executed a special power of attorney (SPA) in favor of petitioner, authorizing her to manage Adela's properties. Adela and petitioner left for the US on April 29, 1989. Petitioner registered the sale on September 25, 1989, and new titles were issued in her name. Adela died on January 14, 1990. Upon petitioner's return, she sought to eject Annie Shotwell Jalandoon and Carlos Sr. from the properties, revealing the transfer of titles. Annie, Carlos Sr., and Anselmo filed a complaint for reconveyance. During the trial, it was discovered that Adela also executed a deed of absolute sale over Lot 35-B in favor of petitioner on April 25, 1989, for a stated price of P60,000.00, which was registered later. The complaint was amended to include Lot 35-B, seeking nullification of the deeds of absolute sale, alleging they were simulated, lacked consideration, and were intended only to facilitate petitioner's travel abroad. Procedural History: The Regional Trial Court (RTC) of Quezon City, Branch 89, rendered a Decision on February 26, 2001, declaring the deeds of absolute sale null and void, ordering the cancellation of titles in petitioner's name, and directing her to execute a deed of reconveyance in favor of Adela's estate. The Court of Appeals (CA) affirmed the RTC's decision with modification, deleting the finding of an implied trust. The CA ruled that the deeds were simulated, lacked consideration, and were without intention to have legal effect. Petitioner's motion for reconsideration was denied by the CA on November 15, 2006. The Petition: Petitioner filed a Petition for Review on Certiorari under Rule 45, assailing the CA's decision and resolution, primarily questioning whether the CA erred in affirming the trial court's findings that the deeds of absolute sale were simulated and without consideration, thus void and inexistent.
Issue(s)
Whether the Court of Appeals erred in affirming the decision of the trial court that the Deeds of Absolute Sale between petitioner and her late grandmother are simulated and without consideration, and hence, void and inexistent. Whether an implied trust existed between Adela and petitioner.
Ruling
The petition is DENIED. The Court affirmed the decision of the Court of Appeals, declaring the Deeds of Absolute Sale between petitioner and the late Adela Shotwell null and void for being simulated and lacking consideration. The Court also affirmed the deletion of the trial court's pronouncement regarding the existence of an implied trust.
Ratio Decidendi
On the issue of simulated contracts and lack of consideration: The Court held that the petition raises questions of fact, which are generally not within the purview of a Rule 45 petition. However, to resolve any doubt, the Court reviewed the records and found no error in the lower courts' appreciation of evidence. The Deeds of Absolute Sale were deemed simulated because the parties' contemporaneous and subsequent acts demonstrated no intention to be bound by the apparent contract. Evidence such as Adela's letter to Dennis indicating her continued ownership, petitioner's own letter admitting Adela's control over the properties and her lack of "say" therein, and Adela's letter to Candy requesting her to stay in the house, all pointed to Adela's retention of dominion. Furthermore, the execution of a Special Power of Attorney (SPA) appointing petitioner as administratrix on the same day as the deeds of sale was considered repugnant to the claim of ownership transfer. The Court also noted the history of previous simulated transfers to other grandchildren, which, when considered with other evidence, supported the conclusion that the transfers to petitioner were also a sham. Regarding consideration, the Court found that no money actually changed hands, and the stated prices in the deeds were superimposed with a different font, indicating a lack of genuine consideration. Article 1471 of the Civil Code, which states that if the price is simulated, the sale is void, was applied. The lack of consideration renders the sale void and inexistent. On the issue of implied trust: The Court affirmed the CA's deletion of the trial court's finding of an implied trust. The Court reasoned that implied trusts, such as resulting trusts under Article 1453 of the Civil Code, contemplate situations where legal title is validly vested. However, since the simulated transfers were void and inexistent ab initio, they vested no rights whatsoever in favor of the petitioner. A void contract cannot give rise to any legal effect or obligation, including an implied trust. Therefore, no transfer of title, legal or beneficial, was effected to petitioner, making the concept of an implied trust inapplicable.
Main Doctrine
Deeds of absolute sale are declared null and void for being simulated and lacking consideration, as the parties' contemporaneous and subsequent acts demonstrate no intention to be bound by the apparent contract, rendering it void ab initio and incapable of producing any legal effect.