G.R. No. L-73275. May 20, 1987.
FLOCERFINA BARANDA, et al., petitioners, vs. EVANGELINA G. BARANDA, ELISA G. BARANDA, and THE HONORABLE INTERMEDIATE APPELLATE COURT, respondents.

FACTS

The case involves the validity of three deeds of sale (“Bilihan ng Lupa”) executed in 1977, wherein the late Paulina Baranda sold five parcels of land to her niece Evangelina and a sixth parcel to another niece, Elisa. Shortly after, Paulina filed a complaint alleging she signed the deeds without knowing their contents, seeking reconveyance. This complaint was withdrawn pursuant to an agreement wherein the nieces promised to execute absolute deeds of sale in favor of Paulina and return the titles, allowing her to retain possession and control over the properties. Only Elisa complied; Evangelina did not. Upon Paulina’s death in 1982, the petitioners, claiming to be her legitimate heirs, filed an action for annulment of the sales and reconveyance. The trial court declared the deeds null and void and ordered reconveyance. The Intermediate Appellate Court reversed, upholding the deeds as valid public documents and awarding substantial damages against the petitioners.

ISSUE

The primary issue is whether the deeds of sale are valid and binding, given the circumstances surrounding their execution and the subsequent agreement.

RULING

The Supreme Court reversed the decision of the Intermediate Appellate Court and reinstated the trial court’s judgment. The Court held that the presumption of regularity and conclusiveness of the notarized deeds of sale was successfully rebutted by clear and convincing evidence. The purported consideration was highly suspect. Evangelina claimed the funds came from a nameless, generous “balikbayan” boyfriend who gave her P100,000.00 in cash, a story the Court found to be an obvious fabrication, noting both nieces were unemployed fresh graduates at the time. The subsequent compromise agreement, where Paulina secured a promise for the return of the properties and retained control, strongly indicated the original transfers were not intended as absolute sales. This agreement, coupled with the incredible tale of the purchase money, proved the absence of a true meeting of the minds and a simulated consideration, rendering the contracts void. The Court also found the appellate court’s award of excessive, unpleaded damages (totaling P120,000.00) to be reckless and an abuse of discretion, serving as a caution against such judicial improvidence. The action for reconveyance was proper as the properties were wrongfully registered in the nieces’ names.