G.R. No. L-54538. April 25, 1985.
HEIRS OF SPOUSES LUIS YANAS and MARIA AGLIMOT, represented by Abraham Yanas, petitioners, vs. HEIRS OF SPOUSES ANTONIO ACAYLAR and GELACIA ACAYLAR, namely, Antonio, Jr., Cecilia, Godofredo, Pacita, Corazon and Loreta, all surnamed Acaylar, and COURT OF APPEALS, respondents.

FACTS

Luis Yanas, an illiterate Subano, was the adjudicated owner of a 13-hectare land in Zamboanga del Norte. On August 7, 1950, he purportedly thumbmarked a deed of sale in English, selling the land to Antonio Acaylar for P200. The sale was notarized the next day and was approved by the provincial governor over two years later in 1953. The decree for the land was registered in Yanas’s name only in 1954, and Acaylar subsequently registered the deed of sale, obtaining a transfer certificate of title.
Yanas, upon discovering the cancellation of his title, filed an adverse claim in 1958, asserting he never sold the land and that the P200 price was grossly inadequate for land worth at least P6,000. After Yanas’s death, his heirs filed an action in 1963 to declare Acaylar’s title void. The trial court and the Court of Appeals upheld the validity of the sale, prompting the Yanas heirs to appeal to the Supreme Court.

ISSUE

The core issue is whether the deed of sale executed by Luis Yanas is valid and binding or whether it is fictitious and fraudulent.

RULING

The Supreme Court reversed the lower courts and declared the sale void. The Court meticulously examined the circumstances and identified multiple badges of fraud that, taken collectively, proved the transaction was fictitious. These included: the deed was in English, which the illiterate vendor could not understand; his wife, Maria Aglimot, did not join the sale and her name was incorrectly stated; the price of P200 for 13 hectares was grossly inadequate; the notarization occurred a day after the thumbmarking; the deed failed to state the land boundaries; the governor’s approval came over two years later; registration was delayed; and the Acaylars only occupied a portion of the land before being ousted.
Crucially, the Court found grave inconsistencies in the testimonies of Acaylar’s key witnesses, Antonio Acaylar himself and lawyer Leoncio Hamoy. Their testimonies regarding the execution and witnessing of the deed were contradictory and unreliable. Furthermore, evidence suggested irregularities in the notarial record. The Court concluded the transaction was not conducted in good faith or in the ordinary course of business. Finally, the Court held that the action to declare a void or inexistent contract does not prescribe, making the 1963 filing timely. Ownership was reinstated in favor of the heirs of Luis Yanas.