Pasco v. Cuenca
REITERATIONFacts
The Antecedents: At the heart of this dispute is a parcel of land, Lot No. 38-B, located in the Municipality of Katipunan, Province of Zamboanga del Norte. This property was originally registered under Transfer Certificate of Title (TCT) No. T-12461 in the names of Spouses Antonio and Isabel Baguispas. On September 9, 1999, Myrna Pasco (petitioner) initiated a legal action against Isabel Baguispas and Spouses Romeo M. Ytang, Jr. and Esther C. Ytang (respondents). Petitioner alleged that the Spouses Baguispas offered to sell the lot to her in June 1986 for P50,000.00, and a Deed of Sale of Real Property was executed on July 1, 1986. Following Antonio's death in March 1987, Isabel executed an affidavit of self-adjudication, conveying the property to herself. Petitioner claims that Isabel subsequently, and without her knowledge, transferred the title to her name and then sold the property to the Spouses Ytang, resulting in a new title, TCT No. T-62536, in the respondents' names. Petitioner sought the cancellation of TCT No. T-62536 and the declaration of nullity of the affidavit of self-adjudication and the deed of sale to the Spouses Ytang. Procedural History: Respondents, in their defense, argued that the sale to petitioner was fictitious and lacked consideration, asserting it was merely for the purpose of enabling petitioner to use the property as collateral for a loan from the Social Security System (SSS). The Regional Trial Court (RTC), Branch 6, Dipolog City, ruled in favor of the petitioner on May 31, 2010, declaring TCT No. T-62536 and the deed of sale to the Spouses Ytang null and void, and recognizing petitioner as the lawful owner. The RTC also ordered the reinstatement of the original title and annotation of the deed of sale in petitioner's favor. The respondents appealed this decision to the Court of Appeals (CA). The CA, in its Decision dated August 27, 2014, reversed the RTC's ruling, finding the deed of sale between the Spouses Baguispas and petitioner void ab initio due to lack of consideration and simulated price, and consequently declared the sale to the Spouses Ytang valid. This CA decision is the subject of the present petition. The Petition: This case comes before the Supreme Court via a Petition for Review on Certiorari under Rule 45 of the Rules of Court, filed by Myrna C. Pasco (petitioner). The petition assails the August 27, 2014 Decision of the Court of Appeals, which reversed the Regional Trial Court's judgment. The core issue presented is whether the CA erred in ruling that the Deed of Sale of Real Property dated July 1, 1986, is null and void for lack of consideration and absence of intent by the parties to be bound. The petition also raised concerns regarding the authority of petitioner's counsel to file the petition, as petitioner had passed away prior to the CA's decision, and the counsel's authority was only secured from the heirs after the Court directed him to provide proof of such authority.
Issue(s)
Whether the Court of Appeals erred in ruling that the Deed of Sale of Real Property dated July 1, 1986 is null and void for lack of consideration and lack of intent by the parties to be bound by the deed of sale. Whether the petition filed by Atty. Angeles on behalf of the deceased petitioner is valid.
Ruling
The petition is DENIED for lack of merit. The Decision dated August 27, 2014 of the Court of Appeals in CA-G.R. CV No. 02386-MIN is AFFIRMED.
Ratio Decidendi
On the nullity of the Deed of Sale of Real Property dated July 1, 1986: The Court affirmed the CA's finding that the deed of sale was void for being absolutely simulated. A contract of sale requires consent, a determinate subject matter, and a certain price. Simulation occurs when parties do not intend the contract to produce the legal effects of its wording. Article 1345 of the Civil Code distinguishes between absolute simulation (no intention to be bound) and relative simulation (concealment of true agreement). In absolute simulation, the contract is void. The Court found that the Spouses Baguispas never intended to sell the land and never received the ₱50,000.00 consideration. This was supported by the testimony of Isabel Cuenca and Rene Pasco, who both stated that the deed was executed to accommodate petitioner's loan application with the SSS, and that no money was actually exchanged. The lack of intention to be bound and the absence of consideration rendered the deed of sale absolutely simulated and void ab initio. On the validity of the petition filed by Atty. Angeles: The Court ruled that Atty. Angeles had no authority to file the petition on behalf of the petitioner. The lawyer-client relationship is terminated upon the death of the client. While a counsel may take steps to safeguard the decedent's interest, this requires further retention by substitute parties. In this case, Atty. Angeles was only given authority by the heirs after the Court required proof of his authority, and he only notified the Court of the petitioner's death during the pendency of the case. Therefore, the petition was filed in behalf of a deceased client without proper authority from the legal representatives, rendering the petition invalid.
Main Doctrine
A deed of sale is considered absolutely simulated and thus void if the parties never intended to be bound by the contract, which can be determined by examining the parties' true intention, the lack of consideration, and the circumstances surrounding the execution of the deed. Furthermore, a counsel's authority to file a petition on behalf of a deceased client is terminated upon the client's death, and any subsequent filing requires express authorization from the legal heirs.