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[G.R. No. 147670.July 2, 2001]

EULALIA LAURINO v. REMEDIOS P. LIAM, et al.

SECOND DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated JUL 2 2001.

G.R. No. 147670 (Eulalia Laurino v. Remedios P. Liam, et al.)

During their lifetime, the spouses Francisca Co and Tomas Villareal acquired 27 parcels of land, all of which were unregistered, in their hometown of Villaba, Leyte. On September 5, 1977, Francisca died, leaving her husband Tomas as her sole intestate heir. On August 28, 1983, Tomas died, leaving his sister Nieves Villareal Pajaron as his sole heir. On October 15, 1984, Nieves died, leaving the properties she inherited from her brother Tomas to her children and grandchildren, herein respondents.

Before Francisca Co and Tomas Villareal died, they conveyed all the 27 parcels of land owned by them to their prot�g�s and a loyal family retainer. Two such conveyances, evidenced by notarized deeds of sale dated June 6, 1976 and March 22, 1977, were made in favor of Araceli Villareal and Clemen Condes, who in turn sold the same on October 10, 1986 and November 28, 1984 to herein petitioner Eulalia Laurino and her husband Basilio.

On August 2, 1989, respondents brought suit against petitioner, among others, alleging that the deeds of sale executed by the spouses Francisca Co and Tomas Villareal in favor of their prot�g�s were simulated and void and thus the sales and mortgages executed by the latter were also void. Respondents prayed the properties be reconveyed to them.

On October 30, 1991, the trial court rendered a decision declaring respondents the true and absolute owners of all the properties in question. On appeal, the Court of Appeals affirmed the trial court's decision finding the sales to petitioner and her predecessors-in-interest Araceli Villareal and Clemen Condes to be void while holding some of the other sales made by the Villareal spouses valid.

Hence this petition for review on certiorari. Petitioner assigns the following errors as having been committed by the appeals court:

I. THE HONORABLE COURT OF APPEALS ERRED IN NULLIFYING THE NOTARIZED DEEDS OF SALE DESPITE THE ABSENCE OF ANY CLEAR AND CONVINCING EVIDENCE TO CONTRADICT THE LEGAL PRESUMPTION OF ITS REGULARITY, GENUINENESS, AND DUE EXECUTION.

II. THE HONORABLE COURT OF APPEALS ERRED IN CLASSIFYING THE DEEDS OF SALE EXECUTED BY THE VILLAREAL SPOUSES IN FAVOR OF CLEMEN CONDES AND ARACELI VILLAREAL AS VOID CONTRACTS OF SALE ON THE GROUND THAT THE PURCHASE PRICES WERE ALLEGEDLY NOT PAID.

III. ASSUMING THAT THE. CONVEYANCES OF THE PARCELS OF LAND WERE INDEED DONATIONS, THE HONORABLE COURT OF APPEALS ERRED IN NOT CATEGORIZING THEM AS ONEROUS DONATIONS.

IV. THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO RECOGNIZE THAT PRESCRIPTION IS ONE OF THE GROUNDS/DEFENSES WHICH MAY BE RAISED EVEN FOR THE FIRST TIME ON APPEAL.

V. THE HONORABLE COURT OF APPEALS ERRED IN FAILING TO RECOGNIZE THAT EVEN ASSUMING THE DEEDS OF SALE WERE VOID AB INITIO, THE PETITIONER HAS OBTAINED OWNERSHIP OVER THE PARCELS OF LAND THROUGH ACQUISITIVE PRESCRIPTION.

VI. ASSUMING THAT THE NOTARIZED DEEDS OF SALE WERE VOID AB INITIO, THE HONORABLE COURT OF APPEALS ERRED IN NOT ORDERING THE REIMBURSEMENT FOR THE NECESSARY AND USEFUL IMPROVEMENTS MADE BY THE PETITIONER WHO WAS CLEARLY A POSSESSOR IN GOOD FAITH.

The foregoing contentions are without merit.

First. Petitioner invokes the presumption of regularity in the execution of the notarized deeds of sale in favor of her predecessors-in-interest, Araceli Villareal and Clemen Condes. She claims that the contracts were actually sales so that nonpayment of the purchase price at the most would only give respondents the right to sue for collection.

The conclusive finding of both the trial and appellate courts, however, is that both sales are simulated and void ab initio. Indeed, the findings of both courts that the purchase price had not been paid or that the statement in the supposed contracts of sale as to the payment of the price had been simulated fortify the view that the alleged sales were void (See Vda. de Catindig v. Heirs of Catalino Roque, 74 SCRA 83 (1976)). It is not disputed that at the time of the alleged sales, Araceli Villareal was only 11 years old and Clemen Condes was blind. Both were not gainfully employed nor did they have properties of their own. They were without means with which to pay the purchase price stated in the deeds of sale (P30,000.00 in case of Araceli Villareal and P50,000.00 in the case of Clemen Condes). In accordance with Art. 1471 of the Civil Code, the sales were void because the price was simulated.

Second. Petitioner contends that assuming Araceli Villareal and Clemen Condes had not paid for the parcels of land conveyed to them, the conveyances should have been considered as onerous donations because Araceli Villareal and Clemen Condes took care of the Villareal spouses until their death. Petitioner, however, failed to substantiate her claim. The same is true of the claim of petitioner's predecessors-in-interest, Araceli Villareal and Clemen Condes, who alleged in the answer they filed in the trial Court that the sales in their favor were actually remuneratory donations. (A remuneratory donation is one in which the donor gives something to reward past or future services or because of future charges or burdens and in which the value of said services, burdens, or charges is less than the value of the donation. An onerous donation, on the other hand, is one which is subject to burdens, charges, or future services equal (or more) in value than the thing donated.) Indeed, the Court agrees with the Court of Appeals that what the Villareal spouses actually intended was to execute simple donations, the cause of which is pure liberality. However, the formal requisites for the same were not complied with for Araceli Villareal and Clemen Condes failed to accept the conveyances to them of immovable property in the same deeds or in a separate public instrument as required by Art. 749 of the Civil Code.

Third. Anent petitioner's claim over the subject parcels of land based on acquisitive prescription, suffice it to say that under Art. 1410 of the Civil Code the action or defense for the declaration of the inexistence of a contract does not prescribe.

Fourth. Finally, petitioner claims that she is a buyer in good faith and for value and should be reimbursed as such for the necessary and useful improvements made by her on the parcels of lands in question. It will suffice to quote the ruling in David v. Bandin, 149 SCRA 140, 150 (1987):

The defense of having purchased the property in good faith may be availed of only where registered land is involved and the buyer had relied in good faith on the clear title of the registered owner. One who purchases an unregistered land does so at his peril. His claim of having bought the land in good faith, i.e., without notice that some other person has a right to, or interest in, the property, would not protect him if it turns out that the seller does not actually own the property. This is what happened in the case at bar.

WHEREFORE, the Court RESOLVED to (1) NOTE petitioner's manifestation, dated May 3, 2001, and to GRANT her motion therein praying that the date of promulgation of the decision of the Court of Appeals stated in her petition be corrected and (2) DENY the aforesaid petition for lack of showing that the Court of Appeals committed reversible error.

Very truly yours,

(Sgd.) TOMASITA B. MAGAY-DRIS
Clerk of Court

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