HEIRS OF THE LATE SPOUSES AURELIO AND ESPERANZA BALITE;
Namely, ANTONIO T. BALITE, FLOR T. BALITE-ZAMAR, VISITACION T. BALITE-DIFUNTORUM,
PEDRO T. BALITE, PABLO T. BALITE, GASPAR T. BALITE, CRISTETA T. BALITE and
AURELIO T. BALITE JR., All Represented by GASPAR T. BALITE, petitioners, vs.
RODRIGO N. LIM, respondent
G.R. No. 152168 | December 10, 2004
FACTS:
The spouses Arelio and Esperazna Balite were the owners of a
parcel of land, located at Poblacion, Catarman, Northern Samar. When Aurelio
died intestate, his wife and children inherited the property and became
co-owners thereof.
In the meantime, Esperanza became ill and was in dire need
of money for her hospital expenses. She offered to sell to Rodrigo Lim her
undivided share for the prize of P1,000,000.00. Esperanza and Rodrigo agreed
that, under the “Deed of Absolute Sale,” it will be made to appear that the
purchase price of the property would be P150,000.00, although the actual agreed
price was P1,000,000.00. Only Esperanza and 2 of her children namely, Antonio
and Cristeta knew about the transaction.
Thereafter, Rodrigo took actual possession of the property
and introduced improvements thereon. He remitted to Esperanza and Cristeta sums
of money in partial payments of the property for which he signed “Receipts.”
After Gaspar, Visitacion, Flor, Pedro and Aurelio, Jr
learned about the said sale, they wrote a letter of the Registry of Deeds
saying that they were not informed of the sale of a portion of the said
property by their mother, nor did they give their consent thereto, and
requested the ROD to hold in abeyance any approval of any application for
registration of title of ownership in the name of the buyer of said lot until
the issue of the legality/validity of the above sale has been cleared.
On October 23, 1996, Esperanza signed a letter addressed to
Rodrigo informing the latter that her children did not agree to the sale of the
property to him and that she was withdrawing all her commitments until the
validity of the sale is finally resolved.
On October 31, 1996, Esperanza died intestate.
ISSUE:
Whether or not the sale was valid
RULING:
Article 1345 of the Civil Code provides that the simulation
of a contract may either be absolute or relative. In absolute simulation, there
is a colorable contract but without any substance, because the parties have no
intention to be bound by it. An absolutely simulated contract is void, and the
parties may recover from each other what they may have given under the
“contract.” On the other hand, if the parties state a false cause in the
contract to conceal their real agreement, such a contract is relatively
simulated. Here, the parties’ real agreement binds them.
In the present case, the parties intended to be bound by the
Contract, even if it did not reflect the actual purchase price of the property.
Since the Deed of Absolute Sale was merely relatively
simulated, it remains valid and enforceable. All the essential requisites
prescribed by law for the validity and perfection of contracts are present.
However, the parties shall be bound by their real agreement for a consideration
of P1,000,000 as reflected in their Joint Affidavit.
The juridical nature of the Contract remained the same. What
was concealed was merely the actual price. Where the essential requisites are
present and the simulation refers only to the content or terms of the contract,
the agreement is absolutely binding and enforceable between the parties and
their successors in interest.
Petitioners cannot be permitted to unmake the Contract
voluntarily entered into by their predecessor, even if the stated consideration
was included therein for an unlawful purpose. “The binding force of a contract
must be recognized as far as it is legally possible to do so.”
Being onerous, the Contract had for its cause or
consideration the price of P1,000,000. Both this consideration as well as the
subject matter of the contract —Esperanza’s share in the property covered by
OCT No. 10824—are lawful. The motives of the contracting parties for lowering
the price of the sale—in the present case, the reduction of capital gains tax
liability— should not be confused with the consideration. Although illegal, the
motives neither determine nor take the place of the consideration.
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