GR L 14630; (March, 1920) (Digest)
G.R. No. L-14630; March 16, 1920
OCEJO, PEREZ & CO., plaintiff-appellee, vs. ISABEL FLORES and JOAQUIN BAS, defendant-appellants; and ISABEL FLORES, plaintiff-appellee, vs. JOAQUIN BAS, defendant-appellant.
FACTS:
On May 27, 1913, Isabel Flores executed a document (Exhibit A) selling six parcels of land with an alcohol factory in Tayabas to Ocejo, Perez & Co. for P15,000. On the same date, the parties executed another document (Exhibit B) wherein the firm leased the same property back to Flores, granting her a right of repurchase. On July 23, 1913, a private document (Exhibit 2) was executed, wherein Flores acknowledged receiving the documents of her ownership over several parcels of land to secure Torrens titles and subsequently mortgage them to Ocejo, Perez & Co. as security for the P15,000 loan.
On May 7, 1915, Isabel Flores executed a notarial deed of absolute sale (Exhibit 3-Bas) in favor of Joaquin Bas, covering thirteen parcels of land and a distillery for P20,000. She later petitioned the court to amend her pending land registration application to substitute Bas’s name for hers. However, on June 26, 1915, Bas executed three promissory notes in favor of Flores for the total P20,000 purchase price, post-dated to May 7, 1915, and payable only after Torrens titles were issued in his name. Bas never paid the price.
Ocejo, Perez & Co., claiming rights under the 1913 documents, filed an ejectment suit against Flores and a separate complaint against both Flores and Bas. Flores, in turn, filed a complaint against Bas.
ISSUE:
Whether the contract of sale between Isabel Flores and Joaquin Bas dated May 7, 1915, is valid and effective.
RULING:
No. The Supreme Court declared the contract of sale null and void. The Court found that the purported sale lacked cause or consideration, as required under Article 1275 of the Civil Code. It was conclusively proven that Joaquin Bas never paid the P20,000 purchase price stipulated in the deed. The execution of the promissory notes, which were not only unpaid but also made payment conditional upon the issuance of titles, demonstrated that Bas had no intention to fulfill his obligation. The transaction was therefore simulated and without legal effect. The Court affirmed the lower court’s judgment, holding Joaquin Bas liable for the costs of the suit. Claims for damages and the recovery of possession of the lands from Ocejo, Perez & Co. were deemed matters for a separate action.