G.R. No. L-21489 and L-21628; May 19, 1966
Miguel Mapalo, et al., petitioners, vs. Maximo Mapalo, et al., respondents.

FACTS

The spouses Miguel Mapalo and Candida Quiba, illiterate farmers and registered owners of a residential land, intended to donate the eastern half to Miguel’s brother, Maximo Mapalo. Through fraud, they were made to sign a deed of absolute sale for the entire land on October 15, 1936, believing it to be a deed of donation for only the eastern half. The document stated a consideration of P500, but they received nothing. They immediately built a permanent fence dividing the land and remained in possession of the western half. Unbeknownst to them, Maximo registered the sale on March 15, 1938, obtaining a transfer certificate of title for the whole land. In 1951, Maximo sold the entire land to the Narcisos (Evaristo, Petronila Pacifico, and Miguel Narciso), who registered the title and took possession only of the eastern portion. The Narcisos filed a suit (Civil Case No. 11991) for ownership and possession of the western half. The Mapalo spouses counterclaimed, seeking cancellation of the Narcisos’ title over the western half due to fraud and the Narcisos’ bad faith. They also filed a separate complaint (Civil Case No. U-133) to declare the deeds of sale null and void as to the western half. The trial court ruled in favor of the Mapalo spouses, declaring the 1936 deed a donation only for the eastern half and null and void for the western half, ordering subdivision and issuance of separate titles. The Court of Appeals reversed, holding the 1936 deed was voidable due to fraud and the action to annul had prescribed, reckoning from the 1938 registration.

ISSUE

Whether the deed of absolute sale dated October 15, 1936, is void ab initio or merely voidable as to the western portion of the land.

RULING

The Supreme Court reversed the Court of Appeals and affirmed the trial court’s judgment. The deed is void ab initio as to the western portion for total absence of cause or consideration. The stated consideration of P500 was completely fictitious, and there was no donation intended for that portion. Under the Old Civil Code, a contract without cause produces no effect. The action for declaration of nullity of a void contract does not prescribe. Furthermore, the Narcisos were purchasers in bad faith, as they had prior knowledge of the Mapalo spouses’ ownership and the flaw in Maximo’s title, evidenced by Pacifico Narciso seeking permission from the Mapalo spouses before the sale. The Court awarded attorneys’ fees on appeal to the Mapalo spouses.