22/03/2026
JUSTICE SAMUEL GAERLAN PENNED CASE!!⚖️👨⚖️
Ana De Joya, Et Al., vs. Francisco Madlangbayan
G.R. No. 228999, April 28, 2021
ISSUE: Whether an absolute simulation in contract of sale does not produce legal effect.
RULING: The Supreme Court (SC) held that absolute simulation in contract of sale is a colorable contract that is not desired to produce legal effect or in any way alter the judicial relation of the parties. This is because simulated deed of sale may appear to be supported by a cause or consideration, but the purchase price has never been actually paid. In which case, the deed of sale is considered void ab initio & any transfer certificate of title which has been issued as a result thereof must be cancelled.
There are two veritable legal presumptions that support the validity of a Deed of Sale: (1) that it was the result of a fair and regular private transaction, and (2) that there was sufficient consideration for the contract. However, these presumptions merely infer prima facie the transaction's validity and may be rebutted by proof to the contrary. Hence, the SC held that even the existence of a signed document purporting to be a contract of sale does not preclude the finding that the contract is invalid when the evidence shows that there was no meeting of minds between the seller and the buyer. In addition, a contract to be valid, requires for its existence the presence of three essential elements: (1) consent of the contracting parties; (2) object certain which is the subject matter of the contract; & (3) cause of the obligation which is established. The absence of any of these elements renders the contract void.
