doctrine
The applicability
of the PER requires that the case be between parties and their
successors-in-interest. Both the Team A and Team P are successors-in-interest
of the parties to the Deed of Sale as they claim rights under Alfonso and
Policronio, respectively. The PER
excluding evidence aliunde, however,
still cannot apply because the present case falls under 2 exceptions to the
rule, as discussed above.
facts
·
Alfonso begot 14 children, namely, Policronio, Liberato, Narciso,
Prudencia, Vicente, Francisco, Inocensio, Roque, Adela, Wenefreda, Merlinda,
Benedicto, Jorge, and Andres. The children of Policronio (Team P), are
opposed to the rest of Alfonso’s children and their descendants (Team A).
·
Alfonso and four of his children, namely, Policronio, Liberato,
Prudencia, and Francisco, met at the house of Liberato. Francisco, who was then
a municipal judge, suggested that in order to reduce the inheritance taxes, their father should make it appear that he
had sold some of his lands to his children.
·
Alfonso executed 4 Deeds of Sale covering several parcels of land in
favor of Policronio, Liberato, Prudencia, and his common-law wife, Valeriana Dela Cruz. The Deed of Sale
executed on Oct 25, 1969, in favor of Policronio, covered six parcels of land,
which are the properties in dispute in this case.
·
Since the sales were only made for taxation purposes and no monetary
consideration was given, Alfonso continued to own, possess and enjoy the lands
and their produce.
·
Policronio died on Nov 22, 1974. Except for the said portion of parcel
5, neither Policronio nor his heirs ever took possession of the subject lands.
·
Alfonso’s heirs executed a Deed of EJP, which included all the lands that were
covered by the 4 deeds of sale. Conrado, Policronio’s eldest son, representing Team
P, signed the Deed of EJP in behalf of his co-heirs.
·
Team P found tax declarations in his name covering the six parcels of
land. They obtained a copy of the Deed of Sale executed on Oct 25, 1969 by
Alfonso in favor of Policronio.
·
Believing that the six parcels of land belonged to their late father as
such, excluded from the Partition, Team P sought to amicably settle the matter
with the Team A.
·
Team P filed a Complaint for Declaration of Ownership, Recovery of
Possession, Annulment of Docs, Partition against the Team A before the RTC
where the ff issues were submitted:
o
(1) WON the Deed of Sale was valid;
o
(2) WON the Deed of EJP was valid; and
The Ruling of the RTC
deed of
sale was void
·
No money involved in the sale. Even granting that there was, the amount
was grossly inadequate (P2K). Team P only paid real estate taxes in 1996 and
1997.
·
Policronio must have been aware that the transfer was merely for taxation purposes because he
did not subsequently take possession of the properties even after the death of
his father.
deed of
EJP valid
·
The Deed of EJP was declared valid by the RTC as all the Team A were
represented and received equal shares and all the requirements of a valid EJP
were met.
The Ruling of the CA
·
Deed of Sale: ABSOLUTELY
SIMULATED based on the testimony of Amparo
Castillo.
·
EJP: ANNULLED THE DEED OF EJP due
to the incapacity of one of the parties to give his consent to the contract.
Without a SPA, it was held that Conrado lacked the legal capactiy to give the
consent of his co-heirs.
·
Remanded to the RTC for the proper partition of the estate, with the
option that the parties may still voluntarily effect the partition by executing
another agreement or by adopting the EJP or through compulsory partition.
Team P
·
RTC violated the BER in giving credence to the testimony of Amparo Castillo
with regard to the simulation of the Deed of Sale, and that prescription had set in precluding any
question on the validity of the contract.
·
CA held that the oral testimony was admissible under Rule 130, Sec 9 (b)
and (c), which provides that evidence aliunde may
be allowed to explain the terms of the written agreement if the same failed to
express the true intent and agreement of the parties thereto, or when the
validity of the written agreement was put in issue.
·
Team P waived their right to object to evidence aliunde having failed to do so during trial
and for raising such only for the first time on appeal.
·
Re prescription: action for the declaration of the inexistence of a
contract does not prescribe (NCC 1410)
·
Team A argued that the Deed of EJP should not have been annulled, and
instead the preterited heirs should be given their share.
main issue #1: won the Deed
of Sale is valid
deed of
sale was absolutely simulated
·
2 veritable legal presumptions bear on the validity of the Deed of Sale:
o
(1) that there was sufficient consideration for the contract; and
o
(2) that it was the result of a fair and regular private transaction.
o If shown to hold, these
presumptions infer prima facie the transaction’s validity, except that it must
yield to the evidence adduced.
·
The
Deed of Sale was not a fair and regular private transaction because it was
absolutely simulated. It was made only for tax purposes. Even Policronio did
not disclose the sale to his heirs.
·
For lack of consideration, the Deed of Sale is once again found to be
void. It states that Policronio paid, and Alfonso received, the ₱2K purchase
price on the date of the signing of the contract:
·
Although, on its face, the Deed of Sale appears to be supported by
valuable consideration, the RTC found that there was no money involved in the
sale.
PER
·
Team P:
o
PER and hearsay were violated by the CA in ruling that the Deed of Sale
was void.
o
Team A and, specifically, Amparo Castillo, were not in a position to
prove the terms outside of the contract because they were not parties nor
successors-in-interest in the Deed of Sale in question. Thus, it is argued that
the testimony of Amparo Castillo violates the PER.
o
PER may not be properly invoked by either party in the litigation
against the other, where at least 1 of the parties to the suit is not a party
or a privy of a party to the written instrument in question and does not base a
claim on the instrument or assert a right originating in the instrument or the
relation established thereby.
·
SC: The
objection against the admission of any evidence must be made at the proper
time, as soon as the grounds therefor become reasonably apparent, and if not so
made, it will be understood to have been waived. In the case of testimonial
evidence, the objection must be made when the objectionable question is asked
or after the answer is given if the objectionable features become apparent only
by reason of such answer. Team P
failed to timely object to the testimony of Amparo Castillo and they are, thus,
deemed to have waived the benefit of the PER.
·
Granting that Team P timely objected to the testimony of Amparo, their
argument would still fail.
·
The failure of the Deed of Sale to express the true intent and agreement
of the parties was clearly put in issue in the Answer of the Team A to
the Complaint. The exception in par (b) is allowed to enable the court to
ascertain the true intent of the parties, and once the intent is clear, it
shall prevail over what the doc appears to be on its face.
·
The VALIDITY of the Deed of
Sale was also put in issue in the Answer. The
operation of the PER requires the existence of a valid written agreement. It
is, thus, not applicable in a proceeding where the validity of such agreement
is the fact in dispute, such as when a contract may be void for lack of
consideration.
·
The applicability of the PER requires that the case be between parties
and their successors-in-interest. Both the Team A and Team P are
successors-in-interest of the parties to the Deed of Sale as they claim rights
under Alfonso and Policronio, respectively. The PER excluding evidence
aliunde, however, still cannot apply because the present case falls under 2
exceptions to the rule, as discussed above.
hearsay
evidence
·
Team P: hearsay rule was violated when the testimony of Amparo was given
weight in proving that the subject lands were only sold for taxation purposes
as she was a person alien to the contract.
·
GR: Hearsay evidence whether objected to or not cannot be given credence
for having no probative value.
·
E: This principle, however, has been relaxed in cases where, in addition
to the failure to object to the admissibility of the subject evidence, there
were other pieces of evidence presented or there were other circumstances prevailing to support the fact in issue.
·
Other circumstances in this case:
o
other Deeds of Sale which were executed in favor of Liberato, Prudencia,
and Valeriana on the same day as that of Policronio’s were all presented in
evidence.
o all
the properties subject therein were included in the Deed of EJP of the estate
of Alfonso.
o
Policronio, during his lifetime, never exercised acts of ownership over
the subject properties
o
Policronio never informed his children of the sale.
Prior
Action Unnecessary
·
Team P: Team A should have filed an action to declare the sale void
prior to executing the Deed of EJP. The sale should enjoy the presumption of
regularity, and until overturned by a court, the Team A had no authority to
include the land in the inventory of properties of Alfonso’s estate.
·
SC: A simulated contract of sale is without any cause or consideration,
and is, therefore, null and void; in such case, no independent action to
rescind or annul the contract is necessary, and it may be treated as
non-existent for all purposes. A void contract produces no effect whatsoever either against or in favor
of anyone; it does not create, modify or extinguish the juridical relation to
which it refers. It was not necessary for the Team A to first file an action to
declare the nullity of the Deed of Sale prior to executing the Deed of EJP.
Personality
to Question Sale
·
Team P contended that the Team A are not parties, heirs under the
contemplation of law to clothe them with the personality to question the Deed
of Sale. They posited that the Team A were not parties to the contract; neither
did they appear to be beneficiaries by way of assignment or inheritance.
·
Unlike themselves who are direct Team P, the Team A are not Alfonso’s
direct heirs. For the Team A to qualify as parties, under Art 1311 of the Civil
Code, they must first prove that they are either heirs or assignees. Being
neither, they have no legal standing to question the Deed of Sale.
·
SC: The right to set up the nullity of a void or non-existent contract
is not limited to the parties, as in the case of annullable or voidable
contracts; it is extended to third persons who are directly affected by the
contract. Team A are clearly his heirs and successors-in-interest and, as such,
their interests are directly affected, thereby giving them the right to
question the legality of the Deed of Sale.
Inapplicability
of Art 842
·
Art refers to the principle of freedom of disposition by will. What is
involved in the case at bench is not a
disposition by will but by Deed of Sale. Team A need not first prove that
the disposition substantially diminished their successional rights or unduly
prejudiced their legitimes.
Inapplicability
of Art 1412
·
Art 1412 is not applicable to fictitious or simulated contracts, because
they refer to contracts with an illegal cause or subject-matter. This Art
presupposes the existence of a cause, it cannot refer to fictitious or
simulated contracts which are in reality non-existent.
Prescription
·
As the Deed of Sale is a void contract, the action for the declaration
of its nullity, even if filed 21 years after its execution, cannot be barred by
prescription for it is imprescriptible. Furthermore, the right to set up the
defense of inexistence or absolute nullity cannot be waived or renounced.
main issue #2: won the
Deed of EJP is valid.
Unenforceability
·
Team A:
o
CA was mistaken in annulling the Deed of EJP due to the incapacity of
Conrado to give the consent of his co-heirs for lack of a SPA. They argue that
the Deed of EJP is not a voidable or an annullable contract, but rather, it is
an unenforceable or, more specifically, an unauthorized contract under Arts
1403 (1) and 1317 of the Civil Code. As such, the Deed of EJP should not be annulled but only be rendered
unenforceable against the siblings of Conrado.
o
NCC 1317 when the persons
represented without authority have ratified the unauthorized acts, the contract
becomes enforceable and binding. Team P ratified the Deed of EJP when
Conrado took possession of 1 of the parcels of land adjudicated to him and his
siblings. The Deed of EJP having been ratified and its benefits accepted, the
same thus became enforceable and binding upon them.
·
Team P
o
subject properties should not have been included in the estate of
Alfonso, and because Conrado lacked the written authority to represent his
siblings.
o
Team P denied that they ratified the Deed of EJP.
·
Partition among heirs is not legally deemed a conveyance of real
property resulting in change of ownership. Hence, a special power of attorney
is not necessary.
·
Conrado’s failure to obtain authority from his co-heirs to sign the Deed
of EJP in their behalf did not result in his incapacity to give consent so as
to render the contract voidable, but rather, it rendered the contract valid but
unenforceable against Conrado’s co-heirs for having been entered into without
their authority.
·
The
Deed of EJP is not unenforceable but, in fact, valid, binding and enforceable
against all Team P for having given their consent to the contract.
o
EJP was executed on April 19, 1989, and Team P claim that they only came
to know of its existence on July 30, 1995 through an issue of the Aklan
Reporter.
o
Conrado retained possession of 1 of the land adjudicated to him in the
Deed of EJP.
o
more than a year before they claimed to have discovered the existence of
the Deed of EJP on July 30, 1995, some of Team P executed a SPA in favor of their sister Gloria
Gonzales, authorizing her to obtain a loan from a bank and to mortgage 1 of the
parcels of land adjudicated to them in the Deed of EJP to secure payment of the
loan.
o
in the letter sent by the counsel of Team P to the Team there was no
mention that Conrado’s consent to the Deed of EJP was vitiated by mistake and
undue influence.
·
The allegation of Conrado’s vitiated consent and lack of authority to
sign in behalf of his co-heirs was a mere afterthought on the part of Team P.
Preterition
·
The Team A were of the position that the absence of Team P in the
partition at the very least, in their preterition and not in the invalidity of
the entire deed of partition.
·
Preterition is thus a concept of testamentary succession and requires a
will. In the case at bench, there is no will involved. Therefore, preterition
cannot apply.
Remand Unnecessary
Considering that
the Deed of Sale has been found void and the Deed of EJP valid, with the
consent of all Team P duly given, there is no need to remand the case to the
court of origin for partition.
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