GR L 47661; (July, 1987) (Digest)
G.R. No. L-47661; July 31, 1987
JUANITO CARIÑO and CIRILA VICENCIO, petitioners, vs. COURT OF APPEALS, PABLO ENCABO and JUANITA DE LOS SANTOS, and LAND AUTHORITY, respondents.
FACTS
Pablo Encabo applied to purchase a lot from the government-acquired Tuason Estate. He allegedly transferred his rights to Josue Quesada through petitioner Cirila Vicencio, but the Land Tenure Administration (LTA) disapproved this transfer as Quesada was disqualified. Encabo later executed a Deed of Sale of House and Transfer of Rights in favor of petitioners Juanito Cariño and Cirila Vicencio. However, the LTA, in an administrative case, refused to approve this transfer, maintaining the status quo and indicating that the authenticity of the deed was a judicial matter. The Office of the President affirmed this LTA decision. Despite these rulings, petitioners remained in possession of the lot. Encabo subsequently obtained a final deed of sale from the Land Authority and a certificate of title. He then filed an action in the Court of First Instance to recover possession.
ISSUE
Whether the petitioners have a valid and enforceable right to the lot based on the Deed of Sale executed by Encabo.
RULING
The Supreme Court denied the petition, affirming the decisions of the lower courts. The legal logic rests on two primary grounds. First, the purported Deed of Sale (Exhibit “D-1”) in favor of the petitioners was found to be fictitious and without consideration. Trial evidence established that no actual payment was made by the petitioners to Encabo for the transfer of rights. Under Article 1409 of the Civil Code, absolutely simulated or fictitious contracts are inexistent and void from the beginning. A contract of sale requires a cause or consideration, and its absence renders the contract null and void.
Second, and decisively, any transfer of rights over a lot from a government land settlement program is subject to the approval of the administering agency, originally the LTA and later the Land Authority. This requirement is a condition precedent for the validity of the transfer against the government. The LTA never approved the transfer to the petitioners; it merely held the matter in abeyance. Consequently, even assuming the deed was valid between the parties, it remained unenforceable against the Land Authority. Since the Land Authority ultimately executed a final deed of sale in favor of the qualified applicant, Encabo, his ownership was rightfully upheld. The petitioners’ claim, being based on a void and unapproved transfer, cannot prevail.