Rebusquillo vs. Gualvez

An Affidavit of Self-Adjudication is void when the affiant is not the sole heir of the decedent, as self-adjudication is only warranted under Section 1, Rule 74 of the Rules of Court when there is only one heir. A Deed of Absolute Sale executed merely to facilitate the titling of property, without any intention to transfer ownership, is an absolutely simulated contract that is void under Articles 1345 and 1346 of the Civil Code, notwithstanding its notarization.

Petitioners Avelina Abarientos Rebusquillo and Salvador Orosco were heirs of Eulalio Abarientos, who died intestate on July 3, 1964, survived by his wife Victoria and seven children, including Avelina and Fortunata (Salvador's mother). Respondents Domingo and Emelinda Rebusquillo Gualvez were Avelina's son-in-law and daughter, respectively. The subject property was an untitled parcel of land in Legazpi City covered by Tax Declaration ARP No. 0141. The dispute concerned the validity of documents executed to facilitate the titling of the property under the Torrens System.

Petitioners Avelina Abarientos Rebusquillo and Salvador Orosco filed a Complaint for annulment and revocation of an Affidavit of Self-Adjudication dated December 4, 2001 and a Deed of Absolute Sale dated February 6, 2002. Avelina was one of the children of Eulalio Abarientos and Victoria Villareal. Eulalio died intestate on July 3, 1964, survived by his wife Victoria, six legitimate children, and one illegitimate child: Avelina, Fortunata (Salvador's mother), Rosalino, Juan, Feliciano, Abraham, and Carlos. Victoria died intestate on June 30, 1983. On his death, Eulalio left an untitled parcel of land in Legazpi City consisting of 2,869 square meters, covered by Tax Declaration ARP No. 0141.

In 2001, Avelina was supposedly made to sign two documents by her daughter Emelinda and son-in-law Domingo on the pretext that the documents were needed to facilitate the titling of the lot. It was only in 2003 that Avelina realized what she signed was an Affidavit of Self-Adjudication and a Deed of Absolute Sale in favor of respondents. When respondents purportedly ignored her attempts to discuss the matter, Avelina sought the intervention of the RTC to declare the documents null and void.

In their Answer, respondents admitted that the execution of the documents was intended to facilitate the titling of the subject property. They alleged that in 2001, Avelina together with the other heirs brought out the idea to have the property registered under the Torrens System. To facilitate titling, it was agreed that the tax declaration could be transferred to respondents, who would spend all the cost of titling subject to reimbursement by all other heirs in case the property is sold. It was agreed that all heirs would be given their corresponding shares. Avelina was given an advance sum of ₱50,000.00 and all delinquent taxes were paid by respondents.

During pre-trial, respondents stipulated and admitted the following facts: Avelina was not the only surviving heir of deceased spouses Eulalio and Victoria; Salvador was a co-owner/possessor of a portion of the subject property; Fortunata was the sister of Avelina; Emelinda was a daughter of Avelina; and the existence of the Affidavit of Self-Adjudication and Deed of Absolute Sale executed by Avelina. Pending the resolution of respondents' appeal before the CA, Avelina died intestate on September 1, 2009, leaving several living heirs including respondent Emelinda.

• Exception to Administration Proceedings: Petitioners argued that recourse to administration proceedings to determine heirship is not required where the parties have already presented evidence on the issue of heirship and the RTC rendered judgment upon the issues defined during pre-trial, citing Portugal vs. Portugal-Beltran.
• Simulation of Contract: Petitioners maintained that the Deed of Absolute Sale was absolutely simulated because the parties never intended to transfer ownership, the true purpose being merely to facilitate titling, as admitted by respondents in their Answer.
• Parole Evidence Rule Exception: Petitioners argued that the notarized Deed of Absolute Sale could be nullified because the failure of the written agreement to express the true intent of the parties was put in issue, falling under the exceptions in Section 9, Rule 130 of the Rules of Court.

• Presumption of Regularity: Respondents argued that the Deed of Sale cannot be annulled because it is a public document that has for its object the creation and transmission of real rights over the immovable property, and being notarized, it enjoys the presumption of regularity and is entitled to full faith and credit upon its face.
• Evidentiary Weight of Signature: Respondents contended that since Avelina's testimony was not offered in evidence, her signature on the deed remains as concrete proof of her agreement to its terms.
• Improper Remedy: Respondents contended that the Complaint filed before the RTC was not the proper remedy provided by law for compulsory heirs unlawfully deprived of their inheritance, as issues on heirship must be made in administration or intestate proceedings.

• Determination of Heirship in Ordinary Civil Action: Whether the RTC properly determined the issue of heirship in an ordinary civil action rather than in a special proceeding.
• Validity of the Affidavit of Self-Adjudication: Whether the Affidavit of Self-Adjudication executed by Avelina, who was not the sole heir, is void.
• Validity of the Deed of Absolute Sale: Whether the Deed of Absolute Sale executed to facilitate titling, without intention to transfer ownership, is void for being absolutely simulated.
• Applicability of the Parole Evidence Rule: Whether the notarized Deed of Absolute Sale may be nullified notwithstanding the parole evidence rule.

• Determination of Heirship in Ordinary Civil Action: Yes. Recourse to administration proceedings is sanctioned only if there is a good and compelling reason; where the parties have already presented evidence on heirship and the RTC rendered judgment upon issues defined during pre-trial, an ordinary civil action suffices.
• Validity of the Affidavit of Self-Adjudication: Void. Under Section 1, Rule 74 of the Rules of Court, self-adjudication is only warranted when there is only one heir; Avelina was not the sole heir, making her declaration a perjury and her act of adjudicating the inheritance invalid.
• Validity of the Deed of Absolute Sale: Void. The Deed of Absolute Sale is an absolutely simulated contract under Articles 1345 and 1346 of the Civil Code because the parties did not intend to be bound, the purpose being merely to facilitate titling.
• Applicability of the Parole Evidence Rule: Yes. The failure of the written agreement to express the true intent of the parties was put in issue, falling under the exceptions in Section 9, Rule 130 of the Rules of Court.

• Determination of Heirship in Ordinary Civil Action: The Court acknowledged the general rule that the declaration of heirship must be made in a special proceeding, not in an independent civil action. However, the Court cited Portugal vs. Portugal-Beltran for the exception that recourse to administration proceedings is sanctioned only if there is a good and compelling reason. In this case, there was only one parcel of land being claimed, making a separate special proceeding impractical and burdensome. The parties had already presented evidence before the trial court, and respondents stipulated during pre-trial that Avelina was not the sole heir and that Salvador was one of the other living heirs with rights over the subject land. Given these admissions, resort to a special proceeding would be an unnecessary superfluity.

• Validity of the Affidavit of Self-Adjudication: The Court applied Section 1, Rule 74 of the Rules of Court, which provides that self-adjudication is only warranted when there is only one heir. Since respondents admitted that Avelina was not the sole heir of Eulalio, and that Salvador was one of the co-heirs by right of representation of his mother, Avelina had perjured herself when she declared in the affidavit that she was "the only daughter and sole heir of spouses EULALIO ABARIENTOS AND VICTORIA VILLAREAL." The falsity of this claim rendered her act of adjudicating to herself the inheritance left by her father invalid.

• Validity of the Deed of Absolute Sale: The Court held that Avelina was not in the right position to sell and transfer the absolute ownership of the subject property to respondents. Since she was not the sole heir and her Affidavit of Self-Adjudication was void, the subject property was still subject to partition. Avelina only had an aliquot portion, and what she could have transferred was only the ownership of such aliquot portion. The Court found that from the admissions of respondents and the records, Avelina had no intention to transfer ownership over the property to respondents. The true intention of the parties was immediately apparent from respondents' own Answer, which acknowledged that the purpose of the Deed of Absolute Sale was simply to "facilitate the titling of the [subject] property." The failure of respondents to take exclusive possession of the property or to collect rentals from its possessor was a clear badge of simulation that rendered the whole transaction void.

• Applicability of the Parole Evidence Rule: The Court rejected the appellate court's opinion that notarization accords the Deed of Absolute Sale the quality of incontrovertibility. The form of a contract does not make an otherwise simulated and invalid act valid. The Court applied the exceptions in Section 9, Rule 130 of the Rules of Court, which allow a party to present evidence to modify, explain, or add to the terms of a written agreement if the failure of the written agreement to express the true intent and agreement of the parties is put in issue. Since respondents themselves admitted in their Answer that the documents were only executed to facilitate titling, the RTC was justified in applying the exceptions to ascertain the true intent of the parties.

• Exception to the Rule Requiring Administration Proceedings for Heirship Determination — While the declaration of heirship must generally be made in a special proceeding, recourse to administration proceedings is sanctioned only if there is a good and compelling reason. An exception exists where the parties in the civil case have already presented their evidence regarding the issue of heirship, and the RTC has consequently rendered judgment upon the issues it defined during pre-trial. The Court applied this exception where there was only one parcel of land being claimed, making a separate special proceeding impractical, burdensome, and superfluous in light of the parties' stipulations.

• Absolute Simulation of Contracts — Under Article 1345 of the Civil Code, absolute simulation takes place when the parties do not intend to be bound at all. An absolutely simulated or fictitious contract is void under Article 1346. The main characteristic of absolute simulation is that the apparent contract is not really desired or intended to produce legal effect or in any way alter the juridical situation of the parties. The Court found the Deed of Absolute Sale absolutely simulated because the parties' true intention, as admitted by respondents, was merely to facilitate titling, not to transfer ownership.

• Parole Evidence Rule Exceptions — Under Section 9, Rule 130 of the Rules of Court, a party may present evidence to modify, explain, or add to the terms of a written agreement if he puts in issue in his pleading: (a) an intrinsic ambiguity, mistake, or imperfection in the written agreement; (b) the failure of the written agreement to express the true intent and agreement of the parties; (c) the validity of the written agreement; or (d) the existence of other terms agreed to by the parties. The Court applied this exception where the failure of the Deed of Absolute Sale to express the true intent of the parties was put in issue, as respondents themselves admitted the documents were executed only to facilitate titling.

• "It has indeed been ruled that the declaration of heirship must be made in a special proceeding, not in an independent civil action. However, this Court had likewise held that recourse to administration proceedings to determine who heirs are is sanctioned only if there is a good and compelling reason for such recourse." — This passage establishes the exception to the general rule requiring special proceedings for heirship determination, which was central to the Court's ruling that the RTC properly exercised jurisdiction.

• "Section 1. Extrajudicial settlement by agreement between heirs. –– x x x If there is only one heir, he may adjudicate to himself the entire estate by means of an affidavit filed in the office of the register of deeds." — This quotation of Rule 74, Section 1 states the controlling rule that self-adjudication is only warranted when there is only one heir, forming the basis for voiding the Affidavit of Self-Adjudication.

• "In the present case, the true intention of the parties in the execution of the Deed of Absolute Sale is immediately apparent from respondents' very own Answer to petitioners' Complaint. As respondents themselves acknowledge, the purpose of the Deed of Absolute Sale was simply to 'facilitate the titling of the [subject] property,' not to transfer the ownership of the lot to them." — This passage identifies the badge of simulation that rendered the Deed of Absolute Sale void, relying on respondents' own admissions.

• "The form of a contract does not make an otherwise simulated and invalid act valid. The rule on parole evidence is not, as it were, ironclad." — This passage rejects the appellate court's reliance on notarization and the presumption of regularity, affirming that the parole evidence rule admits exceptions where the validity of the written agreement is put in issue.

• Portugal vs. Portugal-Beltran, G.R. No. 155555, August 16, 2005, 467 SCRA 184 — Controlling precedent establishing the exception to the rule requiring administration proceedings for heirship determination where the parties have already presented evidence and the trial court rendered judgment upon issues defined during pre-trial.
• Heirs of Policronio Ureta Sr. vs. Heirs of Liberato Ureta, G.R. Nos. 165748 & 165930, September 14, 2011, 657 SCRA 555 — Followed for the concept of simulation of contracts, distinguishing absolute from relative simulation and explaining that in absolute simulation, the apparent contract is not really desired or intended to produce legal effect.
• Pereira vs. Court of Appeals, G.R. No. 81147, June 20, 1989, 174 SCRA 154 — Cited for the rule that recourse to administration proceedings is sanctioned only if there is a good and compelling reason.
• Intestate Estate of Mercado vs. Magtibay, 96 Phil. 383 (1953) — Cited for the same rule regarding administration proceedings.

• Section 1, Rule 74, Rules of Court — Provides that if there is only one heir, he may adjudicate to himself the entire estate by means of an affidavit filed in the office of the register of deeds. The Court applied this provision to void the Affidavit of Self-Adjudication because Avelina was not the sole heir.
• Articles 1345 and 1346, Civil Code — Define simulation of contracts, distinguishing absolute from relative simulation, and provide that an absolutely simulated or fictitious contract is void. The Court applied these provisions to void the Deed of Absolute Sale.
• Section 9, Rule 130, Rules of Court — Provides the exceptions to the parole evidence rule, allowing a party to present evidence to modify, explain, or add to the terms of a written agreement where the failure of the written agreement to express the true intent of the parties is put in issue. The Court applied this provision to allow evidence of the parties' true intention.

Peralta, J.; Villarama, Jr., J. (acting member per Special Order No. 1691 dated May 22, 2014); Mendoza, J.; Leonen, J.