1. MAPALO VS.
MAPALO
Short facts: sps mapalo here were illiterate, they donated the
eastern portion of their property to Maximo mapalo but they
were deceived into signing DOAS over the entire land. Them
maximo sold this to narciso to whom a tct was issued. Mapalo
spouses sought to have the tct cancelled and the western
portion be reconveyed to them. And that the DOAS shall be
declared null and void over the western portion.
Important rulings:
1. Contracts without cause or consideration produce no effect
whatsoever. The inexistence of a contract is permanent and
incurable and cannot be the subject of prescription.
2. Elements of contract : Cause, object, consent
3. Cause or consideration:
a) As to eastern portion, since spouses did not claim
the same being their stand that they agreed to
donate such portion, the same pronouncement of the
RTC that there was a valid and effective donation
was binding to them.
b) As to western portion, there was no donation that
took place so liberality as the cause of donation did
not exist as regards the western portion of the land.
c) Since the deed of sale here was governed by old civil
code (1936), it should be asked if in thsi case there is
no consideration or false consideration
No consideration False
Consideration
Void and inexistent Only voidable.
d) Here, the deed stated that it had for its consideration
500 pesos which was however, totally absent.
e) Question: Is a deed which states a consideration but
in fact did not exist a contract without consideration
or one of false consideration? The answer insin the
case of Ocejo cited below:
In the case of Ocejo perez & Co vs. Flores, the court held that:
“a contract of purchase and sale is null and void and
produces no effect whatsoever where the same is without cause
or consideration in that the purchase price which appears
thereon as paid has in fact never been paid by the
purchaser to the vendor.”
Needless to add, the inexistence of a contract is
permanent and incurable and cannot be the subject of
prescription.
4. Issue on Good faith, court did not agree to good faith
contention for 3 reasons:
a) Firstly, it has been positively shown by the
undisputed testimony of Candida Quiba that
Pacifico Narciso and Evaristo Narciso stayed for
some days on the western side (the portion in
question) of the above-described land until their
house was removed in 1940 by the spouses Mapalo
and Quiba;
b) secondly, Pacifica Narciso admitted in his testimony
in chief that when they bought the property, Miguel
Mapalo was still in the premises in question
(western part) which he is occupying and his house
is still standing thereon; and
c) thirdly, said Pacifico Narciso when presented as a
rebuttal and sub-rebuttal witness categorically
declared that before buying the land in question he
went to the house of Miguel Mapalo and Candida
Quiba and asked them if they will permit their elder
brother Maximo to sell the property. Why was there
a need to ask permission? The court deemed this
as not only a prior knowledge of ownership but also
a recognition of the ownership of spouses mapalo.
2. MODINA VS. CA
Short facts: Parcels of land udner the name of ramon chiang
were alleged to be sold to chiang by his wife merlinda chiang
and the subsequently sold to Modina.
Modina instituted an action for recovery of possession against
Hontarciego, Figueroa and Hipalia. When Merlinda learned of
the case, she sought declaration of nullity of the DOAS since
the titles to those properties were never legally conferred to her
husband and fraudulent acts were employed by him to obtain a
torrens title in his favor.
Issues:
1. should the sale be annulled
2. Is modina a purchaser in GF
Doctrine:
1. The principle of in pari delicto applies only to cases where
the nullity arises from the illegality of the consideration or the
purpose of the contract and not to inexistent and void contracts
where the price is merely simulated.
Important ruling:
1. YES. Modina theorized that the sale was void based on 1409 2nd issue: on purchaser in good faith
prohibiting sales between spouses but the applicable provision
is Art 1422 on application of pari delicto which leaves both guilty
parties where they are, and keeps undisturbed the rights of third
GENRAL RULE: in a sale under the Torrens system, a void title
persons to whom the lots involved were sold; petitioner
cannot give rise to a valid title.
stressed.

EXCEPTION: is when the sale of a person with a void title is to

RTC - ruled that the sale was void for nullity or lack of any
a third person who purchased it for value and in good faith.
consideration

CA- ruled that the sale was void for violating 1490
PURCHASER IN GF

A purchaser in good faith is one who buys the property of

1. The principle of in pari delicto non oritur actio denies all
another without notice that some other person has a right to or
recovery to the guilty parties inter se. It applies to cases where
interest in such property and pays a full and fair price at the
the nullity arises from the illegality of the consideration or the
time of the purchase or before he has notice of the claim or
purpose of the contract. When two persons are equally at fault,
interest of some other person in the property.
the law does not relieve them.

In the case under scrutiny, petitioner cannot claim that he was

EXCEPTION: The exception to this general rule is when the
a purchaser in good faith.
principle is invoked with respect to inexistent contract.

Circumstances indicative of Bad faith:

Q: Is merlinda barred by the principle of in pari delicto from
questioning the deed of sale? (1) He asked his nephew, Placido Matta, to investigate the
origin of the property and the latter learned that the same
A: Here, the contracts under controversy are inexistent
formed part of the properties of MERLINDA's first husband;
contracts within the legal contemplation. Articles 1411 and 1412
are inapplicable. (2) that the said sale was between the spouses;

In pari delicto doctrine applies only to:
1. contracts with illegal consideration or
(3) that when the property was inspected, MODINA met all the
lessees who informed that subject lands belong to MERLINDA
and they had no knowledge that the same lots were sold to the
husband.

2. Illegal subject matter

Rule:

whether the attendant facts constitute:
1. an offense or
2. misdemeanor or
3. whether the consideration involved is rendered illegal.
Here, Merlinda cannot question the sale based on 1490
because she was the wife of Ramon who sold the property to
Modina.
a purchaser cannot close his eyes to facts which would put a
reasonable man upon his guard to make the necessary
inquiries, and then claim that he acted in good faith. His mere
refusal to believe that such defect exists, or his wilful closing of
his eyes to the possibility of the existence of a defect in his
vendor's title, will not make him an innocent purchaser for value,
if it afterwards develops that the title was in fact defective, and
it appears that he had such notice of the defect as would have
led to its discovery had he acted with that measure of
precaution which may reasonably be required of a prudent man
in a like situation. Thus, petitioner cannot claim that the sale
between him and MODINA falls under the exception provided
for by law.

Note that 1490 (sale between spouses) was not Merlinda’s

basis in nullifying the sale as she claims that the sale was
inexistent. Since one of the characteristic of a void contract is
that it cannot produce any effect, Merlinda can recover the 3. VDA DE CATINDIG VS. HEIRS OF ROQUE
property from Modina who never acquired title.
Short facts: Heirs of roque are co owners of a fishpond which
they leased to mrs catindig for 10 yrs after termination, mrs
catindig remained in possession of teh lot as she was
negotiating with the owners for its purchase for 52k. Some co
owners sold their share to mrs catindig as follows:
1. German ramirez: 2/16
When one of the co owners learned of this, he filed an action
against mrs catindig to compel her to allow the co owners to
redeem the portion sold.
But it was found that the 52k consideration was never paid
The projected sale was merely a simulated one to enable her to
mortgage the property to secure the necessary amount needed
to pay the price.
When the case reached the CA, among its rulings was that the
sale of the fishpond was void for non payment of the price.
Ruling: the assignments of error are factual and cannot be
ventilated in a review of the decision of the court of appeals.
The alleged sale was absolutely simulated (there was no
intention to enter into the contract, merely used to obtain loan)
This renders untenable appellant Catindig's contentions that the
remedies available to the respondents, such as an action for
annulment, rescission or reformation, are barred by prescription
or laches.
The alleged sales were absolutely simulated, fictitious or
inexistent contracts (Arts. 1346 and 1409[2], Civil Code). "The
action or defense for the declaration of the inexistence of a
contract does not prescribe" Mere lapse of time cannot give
efficacy to a void contract (Tipton vs. Velasco, 6 Phil. 67).
The Appellate Court's finding that the price was not paid or
that the statement in the supposed contracts of sale as to
the payment of the price was simulated fortifies the view that the
alleged sales were void. "If the price is simulated, the sale is
void ..." (Art. 1471, Civil Code).
“A contract of sale is void and produces no effect whatsoever
where the price, which appears thereon as paid, has in fact
never been paid by the purchaser to the vendor”
4. SPOUSES LEQUIN VS. SPOUSES VIZCONDE
Ruling:
1. On lack of consideration:
The kasulatan states that the respondents paid 15k. while on
its face the contract appeared to be supported by a valuable
consideration, SC agreed that this is a SIMULATED SALE and
unsupported by any consideration.
Section 9 of Rule 130 of the Revised Rules on Evidence gives
both the general rule and exception as regards written
agreements, thus:
SEC. 9. Evidence of written agreements.—When the terms of
an agreement have been reduced to writing, it is considered as
containing all the terms agreed upon and there can be,
between the parties and their successors in interest, no
evidence of such terms other than the contents of the
written agreement.
However, a party may present evidence to modify, explain or
add to the terms of the written agreement if he puts in issue in
his pleading:
(a) An intrinsic ambiguity, mistake or imperfection in written
agreement;
(b) The failure of the written agreement to express the true
intent and agreement of the parties thereto;
(c) The validity of the written agreement; or
(d) The existence of other terms agreed to by the parties or
their successors in interest after the execution of the written
agreement.
The term "agreement" includes wills.
The second exception provided for the acceptance of parol
evidence applies to the instant case. Lack of consideration was
proved by petitioners’ evidence aliunde showing that the
Kasulatan did not express the true intent and agreement of the
parties. As explained above, said sale contract was
fraudulently entered into through the misrepresentations
of respondents causing petitioners’ vitiated consent.
Moreover, the evidence of petitioners was uncontroverted as
respondents failed to adduce any proof that they indeed paid
PhP 15,000 to petitioners. Indeed, having asserted their
purchase of the 512-square meter portion of petitioners based
on the Kasulatan, it behooves upon respondents to prove such
affirmative defense of purchase. Unless the party asserting the
affirmative defense of an issue sustains the burden of proof, his
or her cause will not succeed. If he or she fails to establish the
facts of which the matter asserted is predicated, the
complainant is entitled to a verdict or decision in his or her
favor.
Cited in heirs of Intac:
There can be no doubt that the contract of sale or Kasulatan
lacked the essential element of consideration. It is a
well-entrenched rule that where the deed of sale states that the
purchase price has been paid but in fact has never been paid,
the deed of sale is null and void ab initio for lack of consideration.
Moreover, Art. 1471 of the Civil Code, which provides that "if the
price is simulated, the sale is void," also applies to the instant
case, since the price purportedly paid as indicated in the
contract of sale was simulated for no payment was actually
made.
Consideration and consent are essential elements in a contract
of sale.1âwphi1 Where a party’s consent to a contract of sale is
vitiated or where there is lack of consideration due to a
simulated price, the contract is null and void ab initio.
Moreover, there was failure to adduce proof that the 150k
consideration was paid.
Thus, the Court agrees with the courts below that the
questioned contract of sale was only for the purpose of lending
the title of the property to Spouses Intac to enable them to
secure a loan. Their arrangement was only temporary and
could not give rise to a valid sale. Where there is no
consideration, the sale is null and void ab initio.

5. HEIRS OF INTAC VS. CA 6. BALATBAT VS. CA

Art. 1345. Simulation of a contract may be absolute or relative.

(on effect of non payment)
The former takes place when the parties do not intend to be
bound at all; the latter, when the parties conceal their true
agreement.
Examining the terms and conditions of the "Deed of Sale"
dated April 1, 1980, the P45,000.00 balance is payable only
"after the property covered by T.C.T. No. 135671 has been
Art. 1346. An absolutely simulated or fictitious contract is void. A
partitioned and subdivided, and title issued in the name of the
relative simulation, when it does not prejudice a third person
BUYER" hence, vendor Roque cannot demand payment of
and is not intended for any purpose contrary to law, morals,
the balance unless and until the property has been
good customs, public order or public policy binds the parties to
subdivided and titled in the name of private respondents.
their real agreement.

Devoid of any stipulation that "ownership in the thing shall not

If the parties state a false cause in the contract to conceal their pass to the purchaser until he has fully paid the price",
real agreement, the contract is only relatively simulated and the ownership in thing shall pass from the vendor to the vendee
parties are still bound by their real agreement. Hence, where the upon actual or constructive delivery of the thing sold even if the
essential requisites of a contract are present and the simulation purchase price has not yet been fully paid.
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.13 RULE: The failure of the buyer to make good the price does
not, in law, cause the ownership to revest to the seller unless
the bilateral contract of sale is first rescinded or resolved
In absolute simulation, there is a colorable contract but it has no pursuant to Article 1191 of the New Civil Code.
substance as the parties have no intention to be bound by it.
NON PAYMENT
"The main characteristic of an absolute simulation is that the
Non-payment only creates a right to demand the fulfillment of
apparent contract is not really desired or intended to produce
the obligation or to rescind the contract.
legal effect or in any way alter the juridical situation of the
parties."14 "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."15

NON DELIVERY

In the case at bench, the Court is one with the courts below that
no valid sale of the subject property actually took place between
the alleged vendors, Ireneo and Salvacion; and the alleged
vendees, Spouses Intac. There was simply no consideration
and no intent to sell it.
Critical is the testimony of Marietto, a witness to the execution of
the subject absolute deed of sale. He testified that Ireneo
personally told him that he was going to execute a document of
sale because Spouses Intac needed to borrow the title to the
property and use it as collateral for their loan application. Ireneo
and Salvacion never intended to sell or permanently transfer the
full ownership of the subject property to Spouses Intac.
With respect to the non-delivery of the possession of the
subject property to the private respondent, suffice it to say that
ownership of the thing sold is acquired only from the time of
delivery thereof, either actual or constructive. 28Article 1498 of
the Civil Code provides that — when the sale is made through
a public instrument, the execution thereof shall be equivalent to
the delivery of the thing which is the object of the contract, if
from the deed the contrary does not appear or cannot be
inferred. 29 The execution of the public instrument, without
actual delivery of the thing, transfers the ownership from the
vendor to the vendee, who may thereafter exercise the rights of
an owner over the same.
It is not necessary that vendee be physically present at every
square inch of the land bought by him, possession of the public
instrument of the land is sufficient to accord him the rights of
ownership. Thus, delivery of a parcel of land may be done by
placing the vendee in control and possession of the land (real)
or by embodying the sale in a public instrument (constructive).
The provision of Article 1358 on the necessity of a public
document is only for convenience, not for validity or
enforceability. It is not a requirement for the validity of a contract
of sale of a parcel of land that this be embodied in a public
instrument.
7. BAGNAS VS. CA
(Must be in money or its equivalent)
DOCTRINE
The Deeds of Sale are VOID or have no force or effect. Upon
the consideration alone that the apparent gross, not to say
enormous, disproportion between the stipulated price (in each
deed) of P 1.00 plus unspecified and unquantified services and
the undisputably valuable real estate allegedly sold worth at
least P10,500.00 going only by assessments for tax purposes
which, it is well-known, are notoriously low indicators of actual
value plainly and unquestionably demonstrates that they
state a false and fictitious consideration, and no other true
and lawful cause having been shown, the Court finds both said
deeds, insofar as they purport to be sales, not merely voidable,
but void ab initio.
Is P1 and services rendered included in the term money and its
“equivalent?”
NO. They are not included in the term money and its
“equivalent”
8. ONG VS. ONG
Short facts: Imelda Ong, for and in consideration of One
(P1.00) Peso and other valuable considerations, executed in
favor of private respondent Sandra Maruzzo, then a minor, a
Quitclaim Deed whereby she transferred, released, assigned
and forever quit-claimed to Sandra Maruzzo, her heirs and
assigns, all her rights, title, interest and participation in the
ONE-HALF (½) undivided portion of the parcel of land.
Ruling:
the cause or consideration is not the One (P1.00) Peso
alone but also the other valuable considerations. As aptly
stated by the Appellate Court-
... although the cause is not stated in the contract it is
presumed that it is existing unless the debtor proves the
contrary (Article 1354 of the Civil Code).
One of the disputable presumptions is that there is a sufficient
cause of the contract (Section 5, (r), Rule 131, Rules of Court).
It is a legal presumption of sufficient cause or consideration
supporting a contract even if such cause is not stated therein
(Article 1354, New Civil Code of the Philippines.)
This presumption cannot be overcome by a simple assertion of
lack of consideration especially when the contract itself states
that consideration was given, and the same has been reduced
into a public instrument with all due formalities and solemnities.
To overcome the presumption of consideration the alleged lack
of consideration must be shown by preponderance of evidence
in a proper action.
The execution of a deed purporting to convey ownership of a
realty is in itself prima facie evidence of the existence of a
valuable consideration, the party alleging lack of consideration
has the burden of proving such allegation.
"the major premise thereof is based upon the fact that the
consideration stated in the deeds of sale in favor of Reyes and
the Abellas is P1.00. It is not unusual, however, in deeds of
conveyance adhering to the Anglo-Saxon practice of stating
that the consideration given is the sum of P1.00, although the
actual consideration may have been much more.
Moreover, assuming that said consideration of P1.00 is
suspicious, this circumstance, alone, does not necessarily
justify the inference that Reyes and the Abellas were not
purchasers in good faith and for value.
Neither does this inference warrant the conclusion that the
sales were null and void ab initio. Indeed, bad faith and
inadequacy of the monetary consideration do not render a
conveyance inexistent, for the assignor's liberality may be
sufficient cause for a valid contract (Article 1350, Civil Code),
whereas fraud or bad faith may render either rescissible or
voidable, although valid until annulled, a contract concerning
an object certain entered into with a cause and with the
consent of the contracting parties, as in the case at bar."
Bagnas Ong

Consideration 1 peso and Consideration 1 peso and

otehr services rendered otehr valuable services
rendered

There was no evidence that There was no proof that there

the parties really entered into was no intention to enter into
a contract of sale. a contract thus the
presumption of existence of a
consideration is applicable.

9. REPUBLIC VS. PRDC

Is payment in kind equivalent to price paid in money? YES

Whether the G.I. sheets, black sheets, M. S. Plates, round bars

and G. I. pipes claimed by the respondent corporation to belong
to it and delivered to the Bureau of Prison by Macario Apostol in
payment of his account is sufficient payment therefore, is for the
court to pass upon and decide after hearing all the parties in the
case. Should the trial court hold that it is as to credit Apostol with
the value or price of the materials delivered by him, certainly the
herein respondent corporation would be affected adversely if its
claim of ownership of such sheets, plates, bars and pipes is
true.

From the case:

It is true that the very subject matter of the original case is a sum
of money. But it is likewise true as borne out by the records, that
the materials purportedly belonging to the petitioner corporation
have been assessed and evaluated and their price equivalent in
terms of money have been determined; and that said materials
for whatever price they have been assigned by defendant now
respondent Apostol as tokens of payment of his private debts
with the Bureau of Prisons. In view of these considerations, it
becomes enormously plain in the event the respondent judge
decides to credit Macario Apostol with the value of the goods
delivered by the latter to the Bureau of Prisons, the petitioner
corporation stands to be adversely affected by such judgment.
The conclusion, therefore, is inescapable that the petitioner
possesses a legal interest in the matter in litigation and that
such interest is of an actual, material, direct and immediate
nature as to entitle petitioner to intervene.