Regina Francisco and Zenaida Pascual vs. Aida Francisco-Alfonso

A contract of sale with no cause or consideration is simulated and null and void; and a transfer by a parent of his only property to his illegitimate children, to the exclusion of his sole legitimate daughter, cannot defeat the latter's legitime under the Civil Code. Findings of fact of the Court of Appeals supported by substantial evidence are conclusive and binding on the Supreme Court unless the case falls under recognized exceptions.

Respondent Aida Francisco-Alfonso is the only legitimate daughter of spouses Gregorio Francisco and Cirila de la Cruz, both deceased. Petitioners Regina Francisco and Zenaida Pascual are identified as Gregorio's illegitimate children with his common-law wife Julia Mendoza, with whom he begot seven children; a footnote notes that Zenaida Pascual was not Gregorio's blood daughter but the daughter of his paramour by her lawful husband. Gregorio owned two parcels of residential land in Barangay Lolomboy, Bocaue, Bulacan, covered by TCT Nos. T-32740 and T-117160. Because the deed at issue was executed in 1983, the applicable law is the Civil Code, under which legitimate children have a legitime in the estate of their parents.

Respondent Aida Francisco-Alfonso is the only daughter of spouses Gregorio Francisco and Cirila de la Cruz, both deceased. Petitioners Regina Francisco and Zenaida Pascual are identified as the illegitimate children of Gregorio with his common-law wife Julia Mendoza, with whom he begot seven children. Gregorio owned two parcels of residential land in Barangay Lolomboy, Bocaue, Bulacan, covered by TCT Nos. T-32740 and T-117160.

In 1990, while Gregorio was confined in a hospital, he confided to Aida that the certificates of title of his property were in the possession of Regina and Zenaida. After Gregorio died on July 20, 1990, Aida inquired about the certificates from her half sisters. They informed her that Gregorio had sold the land to them on August 15, 1983. After verification, Aida learned that there was indeed a deed of absolute sale in favor of Regina and Zenaida. On August 15, 1983, Gregorio executed a "Kasulatan sa Ganap na Bilihan," whereby for P25,000.00, he sold the two parcels of land to Regina and Zenaida. By virtue of the sale, the Register of Deeds of Bulacan issued TCT No. T-59.585 to Regina and TCT No. T-59.586 to Zenaida.

On April 1, 1991, Aida filed with the Regional Trial Court of Bulacan a complaint against petitioners for annulment of sale with damages. She alleged that the signature of her late father on the Kasulatan dated August 15, 1983, was a forgery. In their joint answer, petitioners denied the alleged forgery or simulation of the deed of sale.

At trial, Felicitas de la Cruz, a family friend of the Franciscos, testified that Zenaida and Regina did not have any source of income in 1983 when they bought the property, until the time she testified in 1991. Zenaida testified that she operated a canteen, worked as a cashier at Mayon Night Club, and bought and sold ready-to-wear items in August 1983 and prior thereto. She alleged that she paid her father P10,000.00. She did not withdraw money from her bank account at the Rural Bank of Meycauayan, Bulacan, to pay for the property, and claimed she had personal savings other than those deposited in the bank. Her gross earnings from the RTW business for three years were P9,000.00, and she earned P50.00 a night at the club. Regina, on the other hand, was a market vendor selling nilugaw, earning a net income of P300.00 a day in 1983. She bought the property from the deceased for P15,000.00 and had no other source of income.

The Court found the testimonies of petitioners incredible considering their inconsistent statements as to whether there was consideration for the sale and whether the property was bought below or above its supposed market value. They could not present a single witness to the Kasulatan that would prove receipt of the purchase price. It was also established that Gregorio did not own any other property. Before his death, Gregorio had a change of heart and informed his daughter about the titles to the property.

• Denial of Forgery/Simulation: Petitioners denied the alleged forgery or simulation of the deed of sale in their joint answer.
• Consideration: Petitioners maintained that there was consideration for the sale, presenting Zenaida Pascual's testimony that she paid P10,000.00 and Regina Francisco's testimony that she paid P15,000.00, supported by their claimed income sources.
• Review of Factual Findings: The petition raised as the main issue whether the Supreme Court may review the factual findings of the appellate court.

• Forgery: Respondent alleged that the signature of her late father, Gregorio Francisco, on the Kasulatan sa Ganap na Bilihan dated August 15, 1983, was a forgery.

• Review of Factual Findings: Whether the Supreme Court may review the factual findings of the Court of Appeals in a petition for review under Rule 45.
• Simulation and Consideration: Whether the Kasulatan sa Ganap na Bilihan dated August 15, 1983, was simulated and null and void for lack of cause or consideration.
• Legitime: Whether the sale, even if not simulated, violated the legitime of respondent as the sole legitimate daughter of Gregorio Francisco under the Civil Code.

• Review of Factual Findings: No. The Supreme Court's jurisdiction under Rule 45 is limited to review of pure errors of law; findings of fact of the Court of Appeals supported by substantial evidence are conclusive and binding unless the case falls under recognized exceptions, and petitioners failed to prove any exception.
• Simulation and Consideration: Yes. The deed was simulated because there was no consideration; under Article 1409(2) of the Civil Code, a simulated contract is null and void.
• Legitime: Yes. Even if not simulated, the sale violated the Civil Code provisions on legitime; respondent, as the sole legitimate child, cannot be deprived of her share except by disinheritance as prescribed by law.

• Review of Factual Findings: The Supreme Court's jurisdiction in cases brought before it from the Court of Appeals under Rule 45 of the Revised Rules of Court is limited to review of pure errors of law. It is not the function of the Court to analyze or weigh evidence all over again unless there is a showing that the findings of the lower court are totally devoid of support or are glaringly erroneous as to constitute grave abuse of discretion. Findings of fact of the Court of Appeals supported by substantial evidence are conclusive and binding on the parties and are not reviewable by the Supreme Court unless the case falls under any of the recognized exceptions. Petitioners failed to prove that the case fell within any exception.

• Simulation and Consideration: A contract with an absolutely simulated cause is null and void under Article 1409(2) of the Civil Code. The Kasulatan was simulated because there was no consideration. Felicitas de la Cruz, a family friend of the Franciscos, testified that Zenaida Pascual and Regina Francisco did not have any source of income in 1983 when they bought the property. Zenaida claimed she operated a canteen, worked as a cashier at Mayon Night Club, and bought and sold ready-to-wear items; she alleged she paid P10,000.00 but did not withdraw from her bank account, and her gross earnings from the RTW business over three years were P9,000.00 while she earned P50.00 a night at the club. Regina claimed she was a market vendor selling nilugaw with a net income of P300.00 a day in 1983 and bought the property for P15,000.00, with no other source of income. The Court found it incredible that engaging in buy-and-sell could raise P10,000.00, or that earnings in selling goto could save enough to pay P15,000.00 in cash for the land. Petitioners' testimonies were also inconsistent as to whether there was consideration for the sale and whether the property was bought below or above its supposed market value, and they could not present a single witness to the Kasulatan to prove receipt of the purchase price. Since there was no cause or consideration for the sale, the same was a simulation and hence null and void.

• Legitime: Even if the Kasulatan was not simulated, it still violated the Civil Code provisions insofar as the transaction affected respondent's legitime. The sale was executed in 1983, when the applicable law was the Civil Code, not the Family Code. The sale was Gregorio's way to transfer the property to his illegitimate daughters at the expense of his legitimate daughter and to prevent respondent from claiming her legitime and rightful share in the property. Before his death, Gregorio had a change of heart and informed his daughter about the titles to the property. Under Article 888 of the Civil Code, the legitime of legitimate children and descendants consists of one-half of the hereditary estate of the father and of the mother, and the latter may freely dispose of the remaining half subject to the rights of illegitimate children and of the surviving spouse as hereinafter provided. Gregorio did not own any other property. If the parcels of land involved were the only property left by their father, the sale in fact would deprive respondent of her share in her father's estate; by law, she is entitled to half of the estate of her father as his only legitimate child. The legal heirs of the late Gregorio Francisco must be determined in proper testate or intestate proceedings for settlement of the estate. His compulsory heir cannot be deprived of her share in the estate save by disinheritance as prescribed by law.

• Simulation of Contract — An absolutely simulated contract, one with no cause or consideration, is null and void under Article 1409(2) of the Civil Code. The Court applied this doctrine because the purported sale had no consideration, as petitioners failed to credibly prove payment of the purchase price.

• Legitime of Legitimate Children — Under Article 888 of the Civil Code, the legitime of legitimate children and descendants consists of one-half of the hereditary estate of the father and mother; the latter may freely dispose of the remaining half subject to the rights of illegitimate children and the surviving spouse. A compulsory heir cannot be deprived of her share except by disinheritance as prescribed by law. The Court applied this doctrine because the sale would have deprived respondent, the sole legitimate child, of her share in Gregorio's estate.

• Conclusiveness of Court of Appeals Factual Findings — Findings of fact of the Court of Appeals supported by substantial evidence are conclusive and binding on the parties and are not reviewable by the Supreme Court, unless the case falls under recognized exceptions. The Court applied this doctrine because petitioners failed to prove any exception.

• "Since there was no cause or consideration for the sale, the same was a simulation and hence, null and void." — This is the ratio decidendi for the first ground invalidating the deed of sale.
• "The legitime of legitimate children and descendants consists of one-half of the hereditary estate of the father and of the mother. The latter may freely dispose of the remaining half subject to the rights of illegitimate children and of the surviving spouse as hereinafter provided." — This defines the legitime of legitimate children under Article 888 of the Civil Code, which the Court applied to respondent as the sole legitimate child.
• "The legal heirs of the late Gregorio Francisco must be determined in proper testate or intestate proceedings for settlement of the estate. His compulsory heir can not be deprived of her share in the estate save by disinheritance as prescribed by law." — This states the controlling succession principle protecting the legitime of a compulsory heir.
• "The findings of fact of the Court of Appeals supported by substantial evidence are conclusive and binding on the parties and are not reviewable by this Court, unless the case falls under any of the recognized exceptions to the rule." — This states the procedural doctrine limiting the Supreme Court's review of factual findings under Rule 45.

• J.R. Blanco vs. William H. Quasha, 318 SCRA 373 (1999) — Cited for the rule that the Supreme Court's jurisdiction under Rule 45 is limited to review of pure errors of law and that it is not the Court's function to analyze or weigh evidence anew.
• Arriola vs. Mahilum, G.R. No. 123490, August 9, 2000 — Cited for the rule that findings of fact of the Court of Appeals supported by substantial evidence are conclusive and binding and not reviewable by the Supreme Court unless the case falls under recognized exceptions.

• Article 1409(2), Civil Code — Provides that contracts with an absolutely simulated cause are null and void. Applied because the sale had no consideration.
• Article 888, Civil Code — Defines the legitime of legitimate children and descendants as one-half of the hereditary estate of the father and mother, with the remaining half subject to the rights of illegitimate children and the surviving spouse. Applied to respondent as the sole legitimate child.
• Articles 886–888, Civil Code — Cited as the governing provisions on legitime because the sale was executed in 1983, when the applicable law was the Civil Code, not the Family Code.
• Article 916, Civil Code — Provides that a compulsory heir cannot be deprived of her share in the estate except by disinheritance as prescribed by law. Applied to protect respondent's share.
• Rule 45, Revised Rules of Court — Limits the Supreme Court's jurisdiction in cases brought from the Court of Appeals to review of pure errors of law. Applied to deny review of the Court of Appeals' factual findings absent any exception.

Davide, Jr., C.J., Puno, Kapunan, and Ynares-Santiago, JJ., concur.