Bagnas v. CA

Facts:

Hilario Mateum died on March 11, 1964, single, without ascendants or descendants, and survived only by petitioners who are his collateral relatives. He left no will, no debts, and an estate consisting of 29 parcels of land in Kawit and Imus, 10 of which are involved in this controversy. On April 3, 1964, respondents who are also collateral relatives of the deceased, but more remote, registered 2 deeds of sale purportedly executed by Mateum in their favor. The considerations were P1.00 and “services rendered, being rendered, and to be rendered for my benefit”. On the strength of the deeds, respondents were able to secure title over the 10 parcels of land. On May 22, 1964, petitioners commenced a suit against respondents, seeking annulment of the deeds of sale a fictitious, fraudulent or falsified or, alternatively, as donations void for want of acceptance in public instrument. Respondents contend that the sales were made for valuable considerations, and attacked the legal standing of the petitioners as being mere collateral heirs.

Issues:

(1) Whether petitioners have the legal standing to sue

(2) Whether the sale is void for want of consideration

Held:

(1) The law as it is now no longer deems contracts with a false cause, or which are absolutely simulated or fictitious, merely voidable, but declares them void, i.e., inexistent ("nulo") unless it is shown that they are supported by another true and lawful cause or consideration. A logical consequence of that change is the juridical status of contracts without, or with a false, cause is that conveyances of property affected with such a vice cannot operate to divest and transfer ownership, even if unimpugned. If afterwards the transferor dies the property descends to his heirs, and without regard to the manner in which they are called to the succession, said heirs may bring an action to recover the property from the purported transferee. As pointed out, such an action is not founded on fraud, but on the premise that the property never leaves the estate of the transferor and is transmitted upon his death to heirs, who would labor under no incapacity to maintain the action from the mere fact that they may be only collateral relatives and bound neither principally or subsidiarily under the deed or contract of conveyance.

(2) Upon the consideration alone that the apparent gross, not to say enormous, disproportion between the stipulated price (in each deed) of P l.00 plus unspecified and unquantified services and the undisputably valuable real estate allegedly sold worth at least P10,500.00 going only by assessments for tax purposes which, it is well-known, are notoriously low indicators of actual value plainly and unquestionably demonstrates that they state a false and fictitious consideration, and no other true and lawful cause having been shown, the Court finds both said deeds, insofar as they purport to be sales, not merely voidable, but void ab initio. Neither can the validity of said conveyances be defended on the theory that their true causa is the liberality of the transferor and they may be considered in reality donations because the law also prescribes that donations of immovable property, to be valid, must be made and accepted in a public instrument, and it is not denied by the respondents that there has been no such acceptance which they claim is not required. The transfers in question being void, it follows as a necessary consequence and conformably to the concurring opinion in Armentia, with which the Court fully agrees, that the properties purportedly conveyed remained part of the estate of Hilario Mateum, said transfers notwithstanding, recoverable by his intestate heirs, the petitioners herein, whose status as such is not challenged.