Suntay vs. CA Case Digest

Suntay vs. CA NATURE Petition for Review on Certiorari of the Amended Decision of respondent Court of Appeals and of its Resolution denying petitioner's motion for reconsideration. FACTS - Federico Suntay is a wealthy land owner and rice miller from Bulacan. He owned a 5,118 square-meter land in Bulacan. On it was a rica mill, a warehouse and other improvements. - Federico applied as a miller-contractor of the then National Rice and Com Corporation (NARIC). His application was prepared by his nephew lawyer Rafael Suntay. But it was disapproved because at that time he was tied up w/ several unpaid loans. - For purposes of circumvention, he had thought of allowing Rafael to make the application for him. Rafael prepared an absolute deed of sale whereby Federico, for and in consideration of P20, 000.00 conveyed to Rafael said parcel of land with all its existing structures. - Federico claims that the sale was merely fictitious/simulated and has been executed only for purposes of accommodation. - Less than three months after this conveyance, Rafael sold it back to Federico for the same amount of P20,000. It was notarized by Atty. Herminio V. Flores. - However, the said document was not the said deed of sale but a certain "real estate mortgage of a parcel of land to secure a loan of P3,500.00 in favor of the Hagonoy Rural Bank. It could not be found in the notarial register as well - Federico through his new counsel requested that Rafael have TCT No. T-36714 so that he can have the counter

deed of sale in favor registered in his. But the request was turned down. - So Federico’s counsel filed a case in the CFI. The trial court upheld the validity and genuineness of the deed of sale executed by Federico in favor of Rafael, but it ruled that the counter-deed, executed by Rafael in favor of Federico, was simulated and without consideration, hence, null and void ab initio. (it was not dated, not notarized and above all it has no consideration because plaintiff did not pay defendant the consideration of the sale in the sum of P20,000.00) - CA ruled the same. BUT it then reversed itself upon petition and said that the first Deed of Sale was a mere accommodation arrangement executed without any consideration and therefore a simulated contract of sale. Considering the ff. circumstances: > The 2 instruments were executed closely one after the other > The close relationship between the parties >the value and location of the property purportedly sold. (P20, 000) > Rafael also never assumed ownership nor did he gather any benefit. - Rafael Suntay on the other hand insists that the transaction was a veritable sale. ISSUE WON the deed of sale executed in favor of Rafael Suntay was valid HELD NO Reasoning The history and relationship of trust, interdependence and intimacy between the late Rafael

and Federico is an unmistakable token of simulation. It has been observed that fraud is generally accompanied by trust. - The late Rafael insisted that the sale to him of his uncle's property was in fact a "dacion en pago" in satisfaction of Federico's unpaid attorney's fees. But such claim cannot prosper. He did not even tell Federico that he considered such to be his fee. Federico was also liquid enough to pay him. - All circumstances point to the conclusion that such was simulated transaction. Ratio A contract of purchase and sale is 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 two veritable legal presumptions: first, that there was sufficient consideration for the contract and, second, that it was the result of a fair and regular private transaction. These presumptions if shown to hold, infer prima facie the transaction’s validity, except that it must yield to the evidence adduced. Disposition WHEREFORE, the Amended Decision promulgated by the Court of Appeals on December 15, 1993 in CA-G.R. CV No. 08179 is hereby AFFIRMED IN TOTO.