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● [1975] Narciso Valerio, with consent of his wife Nieves, [3] As co-owners, petitioners and Alejandro subdivided
executed a DEED OF SALE whereby he sold his 6.5 the land in order that separate titles may be issued to
hectare landholding to his heirs and conveyed 511 sq. them;
m. of his landholding in favor of his tenant Alejandro R.
in recognition of his long service and cultivation of the [4] Thereafter, respondent Vicenta succeeded her
subject land husband in tilling the 6.5-hectare land;
● [1982] The parties to the DEED OF SALE as co- [5] As tenant, she paid lease rentals to petitioners who
owners, subdivided the 6.5 hectare land and executed a initially accepted them;
DEED OF AGREEMENT OF SUBDIVISION
[6] Upon the death of petitioners’ mother, Nieves Valerio,
● The 511 sq. m. of land was granted to tenant petitioners demanded the Refrescas to return the 511
Alejandro R. sq. m. land as the former intended to sell the entire land
which shall then be converted to commercial use.
● Individual titles over the apportioned areas were
subsequently issued to the vendees [7] Invoked prescription and estoppel in their defense
● Nieves Valerio [widow] entered into another ● At the pre-trial, the parties stipulated that the transfer
LEASEHOLD AGREEMENT with the Refrescas over the of 511 sq. m. lot to Alejandro was without monetary
6.5 hectare landholding for the period of 1984-1965 in consideration.
exchange for the latter’s payment.
Petitioners admitted that they did not pay monetary
● Vicenta R. succeeded Alejandro R. in tilling the land consideration for the transfer of the specific portions of
when he died; thereafter, petitioners demanded that the the land to them
respondents vacate the land and they filed a complaint
for the annulment of documents of transfer and title of ISSUES:
Alejandro.
[1] Whether or not the 1975Deed of Sale between
Allegations: Narciso and Alejandro is absolutely simulated or
[1] Cause or consideration for the transfer of the 511 sq. fictitious and produced no legal effect as there was no
m. lot to the Refrescas was an agreement between monetary consideration
Narciso and Alejandro that conveyance of said portion
would serve as disturbance compensation in favor of the SC RULING: NO. RELATIVELY SIMULATED
latter, i.e., the 511 sq. m. lot was granted to the
Refrescas in exchange for the surrender of their tenancy ● Article 1345 of the Civil Code provides that the
rights over the entire 6.5-hectare land; simulation of a contract may either be absolute or
relative.
[2] Alejandro allegedly obliged himself to return the 6.5-
hectare land he was tilling as a tenant
● In absolute simulation, there is a colorable contract but
it has no substance as the parties have no intention to
be bound by it.