CASE DIGEST: OLEGARIO V. CA

BONIFACIO OLEGARIO AND ADELAIDA VICTORINO, petitioners, V. THE HONORABLE COURT OF APPEALS, MANUEL RIVERA, PAZ OLEGARIO, AND SOCORRO OLEGARIO-TEVES, respondent.

G.R. NO. 104892               |              Nov. 14, 1994

PONENTE: Puno

 

DOCTRINE(S): Contract of sale; consideration of a contract is different from the motive of the parties

 

FACTS:

 Sps. Marciliano Olegario and Aurelia Rivera-Olegario owned a 91 sq. m. parcel of land at 198 J.P. Rizal cor. Antipolo Sts., Caloocan City.

The Olegario couple were childless but reared and educated private respondents Manuel Rivera, Paz Olegario, and Socorro Olegario-Teves. Petitioner Bonifacio Olegario is the brother of Marciliano while petitioner Adelaida Victorino is the niece of Aurelia.

On March 19, 1986, Aurelia Rivera-Olegario died at the age of 83. To preclude her heirs from inheriting and to avoid payment of taxes, Marciliano executed a Deed of Absolute Sale of the subject property in favor of private respondents. The purported consideration was P50,000. The contract of sale was not registered.

On March 10, 1988, Marciliano died intestate. Petitioners Bonifacio Olegario and Adelaida Victorino were the sole heirs of spouses Olegario. On May 23, 1989, they executed a Deed of Extrajudicial Settlement of Estate covering the subject lot. On July 13, 1989 the said Extrajudicial Settlement was recorded in the Register of Deeds of Caloocan City.

On August 1, 1989, petitioners sold the subject lot for P200,000 to Elena Adaon and Nestor Tejon.

Private respondents alleged that the Extrajudicial Settlement came to their knowledge only on August 21, 1989. On that same day, they tried to register their contract of sale 3 years from its execution. The registration was denied as the subject property has been transferred to Elena Adaon and Nestor Tejon.

The fight for ownership of subject lot ensued. Private respondents filed for the Annulment of Extrajudicial Settlement of Estate and Damages against petitioners. As special and affirmative defense, petitioners assailed the Deed of Absolute Sale between Marciliano Olegario and privat respondents. On the other hand, cross-claimants Elena Adaon and Nestor Tejon maintained they were buyers in good faith for value.

ISSUE(S):

Whether or Not the sale between Marciliano Olegario and the private respondents is null and void for being absolutely simulated and fictitious?

RULING:

YES. The sale between Marciliano Olegario and private respondents is null and void. Applying Articles 1352 and 1409 of the Civil Code in relation to the indispensable requisite of a valid cause, the court held that the alleged deed of sale is void.

RATIO:

In a contract of sale, consideration is, as a rule, different from the motive of the parties. Consideration is defined as some right, benefit, or advantage conferred upon the promisor, to which he is otherwise not lawfully entitled or any detriment, prejudice, loss, or disadvantage suffered or undertaken by the promisee other than to such as he is at the time of consent bound to suffer. As contradistinguished, motive is the condition of mind which incites to action, but includes also the inference as to the existence of such condition, from an external fact of a nature to produce such a condition. Under certain circumstances, however, the motive of the parties may be regarded as the consideration when it predetermines the purpose of the contract. When they blend to that degree, and the motive is unlawful, when the contract entered into is null and void.

In the case at bench, the primary motive of Marciliano is selling the controverted 91 sq. m. lot to private respondents was to illegally frustrate petitioners’ right of inheritance and to avoid payment of estate tax.