THIRD DIVISION
G.R. No. 196083, November 11, 2015
MILAGROS C. REYES, Petitioner, v. FELIX P. ASUNCION, Respondent.
D E C I S I O N
PERALTA, J.:
For this Court's consideration is the Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, dated April 25, 2011 of petitioner Milagros C. Reyes seeking the reversal of the Decision2 of the Court of Appeals (CA) dated July 9, 2010 which affirmed the Decision3 of the Regional Trial Court (RTC), Branch 66, Capas, Tarlac, dated January 17, 2007 dismissing the Complaint4 of petitioner against respondent Felix P. Asuncion for the declaration of nullity of a contract or deed.
The facts follow.
Petitioner claimed that since the early 80s, she and her late husband were the owners, with the right to occupy and possess a parcel of land (subject land), which is also a sugarcane plantation, with an area of more or less 3.5 hectares located at Patling, Capas, Tarlac and forms part of a U.S. Military Reservation. Sometime in 1986, petitioner hired respondent as a caretaker of the subject land. In 1997, the Bases Conversion and Development Authority (BCDA) launched a resettlement program for the victims of the Mt. Pinatubo eruption and began to look for possible resettlement sites in Tarlac and the subject lot was among those considered.
Thereafter, according to petitioner, in order to prevent the BCDA from converting her property into a resettlement site, she and respondent executed a contract, antedated on June 15, 1993, transferring her rights over the subject land to the respondent. The contract reads as follows:chanRoblesvirtualLawlibrary
PAGLILIPAT [NG] KARAPATAN SA LUPA
Para sa Kinauukulan[:]
Ako po [ay] si [G]inang Milagros C. Reyes, widow[,] [F]ilipino, a sugar [p]lanter of Central Azucarera de Tarlac, San Miguel [,] Tarlac [and] residing at San Rafael[,] Tarlac.
Akin[g] pinatutunayan sa kasulatan[g] ito na nabili ko ang karapatan o [r]ights ni [GJinoong Reymundo Dailig, nakatira sa Patling[,] Capas[,] Tarlac. Ang loti ay may sukat na tatlong ektarya at kalahati [sic] (3 1/2 hec). [A]t itoy [sic] ay kusang loob naming mag-asawa, si Jesus C. Reyes[,] na ipagkaloob ang nasabing lupa kay [G]inoong Felix Asuncion [unreadable portion]. Sa loob ng sampung taon naminfg] pagsasama[,] nakita namin na naging matapat siya sa kanyang obligations bilang taga pamahala [sic] ng aming tubuhan at sa mga [k]ontratista at higit sa lahat ay marunong siya makisama sa aming kasama siya [ay] mapagkakatiwalaan lalo na sa pera. Dahil sa [sic] naging matapat siya sa amin bilang Palsunero, napagkasunduan namin na kami ang bahala sa finances, sa kasunduan na kami ang magpapakabyaw ng tubo sa pangalan ko, hanggang gusto ko. Sa ilalim nito ay nakapinna ang aking pangalan.
Sgd. Sgd.
Felix P. Asuncion Milagros C. Reyes
Tenant PlanterSgd.cralawlawlibrary
Witness
Barangay [C]aptain
Bon Vistair5
WHEREFORE, premises considered, finding no legal basis to nullify the contract denominated as Paglilipat [nang] Karapatan set Lipa, the complaint is dismissed and the Paglilipat [nang] Karapatan set Lupa is declared legal and binding.
No pronouncement as to cost. SO ORDERED.6cralawlawlibrary
I
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN RULING THAT THE SUBJECT CONTRACT IS VALID EVEN IF IT DOES NOT REFLECT THE TRUE INTENT OF THE PARTIES.II.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN RULING THAT THE DONATION OF THE SUBJECT LAND IS VALID EVEN IF NOT MADE AND ACCEPTED IN A PUBLIC DOCUMENT.III.
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN RULING THAT THE PETITIONER MAY TRANSFER THE SUBJECT LAND TO THE RESPONDENT EVEN WITHOUT THE CONSENT OF THE HEIRS OF HER LATE HUSBAND.9ChanRoblesVirtualawlibrary
cralawlawlibrary
Art. 1345. Simulation of a contract may be absolute or relative. The former takes place when the parties do not intend to be bound at all; the latter, when the parties conceal their true agreement.
Art. 1346. An absolutely simulated or fictitious contract is void. A relative simulation, when it does not prejudice a third person and is not intended for any purpose contrary to law, morals, good customs, public order or public policy binds the parties to their real agreement.cralawlawlibrary
x x x In absolute simulation, there is a colorable contract but it has no substance as the parties have no intention to be bound by it. The main characteristic of an absolute simulation is that the apparent contract is not really desired or intended to produce legal effect or in any way alter the juridical situation of the parties. As a result, an absolutely simulated or fictitious contract is void, and the parties may recover from each other what they may have given under the contract. However, if the parties state a false cause in the contract to conceal their real agreement, the contract is relatively simulated and the parties are still bound by their real agreement. Hence, where the essential requisites of a contract 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.cralawlawlibrary
So far, appellant's averments evince an obvious knowledge and voluntariness on her part to enter into the alleged simulated contract. Without the slightest doubt, appellant, as plaintiff in the court below, utterly foiled to adduce any evidence of appellee's bad faith or fraud in procuring her signature to the contract or that he violated their real intention, if any, in executing it. It must be stressed that the determination of whether one acted in bad faith is evidentiary in nature. Indeed, the unbroken jurisprudence is that "[b]ad faith [or fraud] under the law cannot be presumed; it must be established by clear and convincing evidence. The allegation of simulation of contract as well as lack of consent and/or vitiated consent remains to be proven. As it stands, We perceive that the contract by its very terms and conditions, on June 15, 1993, appellant simply intended to transfer the subject land to appellee. It is a cardinal rule that if the terms of a contract are clear and leave no doubt as to the intention of the contracting parties, the literal meaning of its stipulation shall control.17cralawlawlibrary
A painstaking review of the contract reveals that it is a remuneratory donation. First, appellant expressed in the contract that "sa loob ng sampling taon namin[g] pagsasama[,] nakita namin na naging matapat siya sa kanyang obligations bilang taga pamahala [sic] ng aming tubuhan at sa mga [k]ontratista at higit sa lahat ay marunong siya makisama sa aming mga kasama at siya [ay] mapagkakatiwalaan lalo na sa pera. Clearly, she gave the subject land to appellee to remunerate his ten (10) years of faithful service to her. More importantly, appellant stated that "napagkasunduan namin na kami ang bahala sa finances, sa kasunduan na kami ang magpapakabyaw ng tubo sa pangalan ko, hanggang gusto ko. This is a profit sharing agreement where appellant finances the planting, harvesting and milling of sugarcane on the subject land donated to appellee under appellant's name. Unmistakably, it is a charge or burden on the donation.22cralawlawlibrary
Endnotes:
1Rollo, pp. 45-109.
2 Penned by Associate Justice Mario V. Lopez, with Associate Justices Magdangal M. De Leon and Rodil V. Zalameda, concurring; id. at 50-60.
3 Penned by Judge Alipio C. Yumul; id. at 75-83.
4 Id. at 62-65.
5 Id. at 106.
6 M at 83.
7 Id. at 60.
8 Resolution dated March 1, 2011, id. at 45-48.
9 Id. at 25-26.
10 Id. at 132-141.
11 Id. at 156-167.
12 520 Phil. 367, 374 (2006), citing Loyola v. Court of Appeals, 383 Phil. 171 (2000) and Heirs of the Late Spouses Balite v. Lim, 487 Phil. 281 (2004). (Italics omitted)
13Manila Banking Corporation v. Silverio, 504 Phil. 17, 27 (2005), citing People's Aircargo and Warehousing Co., Inc. v. Court of Appeals, 357 Phil. 850, 869 (1998).
14Tongoy, et al. v. Court of Appeals, et al, 208 Phil. 95, 113 (1983), citing Vda. de Rodriguez v. Rodriguez, et al., 127 Phil. 294, 301-302 (1967).
15Spouses Lopez v. Spouses Lopez, 620 Phil. 368, 378 (2009).
16Ramos v. Heirs of Honorio Ramos, Sr., 431 Phil. 337, 339 (2002).
17Rollo, p. 55. (Citations omitted.)
18 Civil Code, Art. 725.
19Ocampo v. Ocampo, 471 Phil. 519, 541 (2004), citing Vitug, Compendium of Civil Law and Jurisprudence (1993 revised ed.), p. 353.
20 Civil Code, Art. 750.
21 Id.
22Rollo, p. 58.
23 379 Phil. 515, 527 (2002).