GR 25777; (November, 1976) (Digest)
G.R. No. L-25777 November 26, 1976
ASUNCION MENESES VDA. DE CATINDIG, petitioner-appellant, vs. The Heirs of CATALINA ROQUE, et al., respondents-appellees.
FACTS
The case involves a fishpond in Bulacan owned by nine co-owners. Petitioner Asuncion Meneses Vda. de Catindig leased the property for ten years until September 30, 1951. After the lease expired, she remained in possession while negotiating to purchase the entire property for P52,000. She presented private documents (Exhibits 6 to 26) purporting to be sales of the co-owners’ shares to her, dated April 13 or 14, 1950. However, on October 18, 1960, co-owner German Ramirez separately sold his 2/16 share to Catindig. The other co-owners (respondents) filed an action to compel Catindig to allow them to redeem Ramirez’s share and to recover possession of the entire fishpond.
ISSUE
The primary legal issue is whether the purported sales of the co-owners’ shares to Catindig (Exhibits 6 to 26) are valid, thereby making her the owner entitled to possession, or whether they are simulated and void, obliging her to surrender possession and pay compensation for its use.
RULING
The Supreme Court affirmed the lower courts’ decisions with modifications. It held that the factual findings of the Court of Appeals are conclusive. The Appellate Court found the purported sales (Exhibits 6 to 26) to be simulated and void ab initio because the consideration of P52,000 was never paid by Catindig; the documents were executed merely to enable her to mortgage the property to raise funds, which loan she never obtained. Being absolutely simulated or fictitious contracts under Articles 1346 and 1409(2) of the Civil Code, they are inexistent and void from the beginning. An action for the declaration of the inexistence of a contract does not prescribe under Article 1410. Consequently, Catindig’s possession after the lease expired was in bad faith, and she is liable to pay reasonable compensation for the use of the property, fixed at P6,000 annually, subject to certain deductions.
The Court also corrected the legal basis for redemption. The right of the co-respondents to redeem the 2/16 share sold by German Ramirez is governed by Article 1620 on legal redemption among co-owners, not by Article 1088 on redemption among heirs. The Court ordered the delivery of possession to the respondents, an accounting of net earnings, and allowed deductions from the compensation due, including amounts corresponding to shares not in dispute and realty taxes Catindig paid for the benefit of the owners.