Tuesday, February 23, 2016

Art. 1471, Civil Code - If the price is simulated, the sale is void, but the act may be shown to have been in reality a donation, or some other act or contract.



FELIX TING HO, JR.,  MERLA TING HO BRADEN, JUANA TING HO & LYDIA TING HO BELENZO vs. VICENTE TENG GUI, G.R. No. 130115, July 16, 2008

“x x x.

Coming now to the issue of ownership of the properties erected on the subject lot, the Court agrees with the finding of the trial court, as affirmed by the appellate court, that the series of transactions resorted to by the deceased were simulated in order to preserve the properties in the hands of the family. The records show that during all the time that the properties were allegedly sold to the spouses Victoria Cabasal and Gregorio Fontela in 1958 and the subsequent sale of the same to respondent in 1961, the petitioners and respondent, along with their parents, remained in possession and continued to live in said properties.

However, the trial court concluded that:

In fairness to the defendant, although the Deeds of Sale executed by Felix Ting Ho regarding the improvements in favor of Victoria Cabasal and Gregorio Fontela and the subsequent transfer of the same by Gregorio Fontela and Victoria Cabasal to the defendant are all simulated, yet, pursuant to Article 1471 of the New Civil Code it can be assumed that the intention of Felix Ting Ho in such transaction was to give and donate the improvements to his eldest son the defendant Vicente Teng Gui [20]

Its finding was based on Article 1471 of the Civil Code, which provides that:

Art. 1471. If the price is simulated, the sale is void, but the act may be shown to have been in reality a donation, or some other act or contract.[21]

The Court holds that the reliance of the trial court on the provisions of Article 1471 of the Civil Code to conclude that the simulated sales were a valid donation to the respondent is misplaced because its finding was based on a mere assumption when the law requires positive proof.

The respondent was unable to show, and the records are bereft of any evidence, that the simulated sales of the properties were intended by the deceased to be a donation to him. Thus, the Court holds that the two-storey residential house, two-storey residential building and sari-sari store form part of the estate of the late spouses Felix Ting Ho and Leonila Cabasal, entitling the petitioners to a four-fifths (4/5) share thereof.

 X xx.”


Footnotes:
[1] Under Rule 45 of the 1997 Rules of Civil Procedure.
[9] Article 1471 of the Civil Code provides:
Art. 1471. If the price is simulated, the sale is void, but the act may be shown to have been in reality a donation, or some other act or contract.
[14] 79 Phil. 461 (1947).
[15] Id. at 474 (emphasis supplied).
[16] Property Registration Decree, P.D. No. 1529, 103.
[17] This rule does not apply where the land covered by a patent issued by the Government had previously been determined in a registration proceeding and adjudicated in favor of a private individual other than the patentee, which situation is not present in this case.
[18] G.R. No. 149615, August 29, 2006, 500 SCRA 65.
[19] Id. at 68.
[21] Civil Code, Art. 1471.