Tan vs. Hosana

While a void or inexistent contract produces no legal effects and is unenforceable, it remains admissible as evidence to prove matters that occurred during its execution, including the consideration paid, for purposes of determining restitution under the principle of unjust enrichment, and the consideration stated in a notarized deed constitutes prima facie evidence of the amount paid.

Jose G. Hosana and Milagros C. Hosana acquired a house and lot located at Tinago, Naga City during their marriage, registered under Transfer Certificate of Title (TCT) No. 21229. While Jose was working in Japan, Milagros executed a Deed of Absolute Sale dated January 13, 1998, purporting to sell the conjugal property to Tomas P. Tan, Jr. for a stated consideration of P200,000.00. The sale was effected through a Special Power of Attorney (SPA) allegedly executed by Jose in favor of Milagros on June 10, 1996. Following the sale, TCT No. 21229 was cancelled and TCT No. 32568 was issued in Tomas' name.

• The Conjugal Property: Jose G. Hosana married Milagros C. Hosana on January 14, 1979. During their marriage, they acquired a house and lot in Tinago, Naga City, registered under TCT No. 21229.
• The Alleged Sale: On January 13, 1998, Milagros executed a Deed of Absolute Sale in favor of Tomas P. Tan, Jr., conveying the subject property for a stated consideration of P200,000.00. The sale was purportedly effected through a Special Power of Attorney (SPA) dated June 10, 1996, allegedly authorizing Milagros to act as attorney-in-fact for Jose. Following the sale, TCT No. 21229 was cancelled and TCT No. 32568 was issued in Tomas' name.
• The Forgery Allegation: Jose, who was working in Japan at the time of the sale, claimed that the SPA was forged and that he never consented to the transaction. Upon learning of the sale from his brother Bonifacio, Jose verified with the Register of Deeds and discovered the transfer of title. Bonifacio testified that Jose's signature on the SPA was forged and presented comparative documents including Jose's passport, voter's affidavit, and specimen signatures.
• Tomas' Defense: Tomas asserted that he was a buyer in good faith and for value. He claimed that prior to payment, he sent his goddaughter Rosana Robles to verify with Jose (via telephone) whether he consented to the sale, and Jose allegedly confirmed his authorization. Tomas claimed he paid a total of P700,000.00 (P350,000.00 as partial payment and P350,000.00 upon execution of the deed), despite the Deed of Sale stating only P200,000.00, allegedly to save on taxes. Tomas filed a cross-claim against Milagros for damages.
• Trial Proceedings: The RTC declared Milagros in default. Jose presented his brother Bonifacio as sole witness. Tomas testified that he paid P700,000.00, corroborated by Rosana regarding the telephone confirmation.
• Lower Court Findings: The RTC found the SPA null and void due to forgery. The CA affirmed the nullity of the sale but ordered reimbursement of only P200,000.00 (the amount stated in the deed), rejecting Tomas' claim of P700,000.00 for lack of convincing evidence.

• Admissibility of Void Document: Tomas argued that the Deed of Sale, having been declared null and void, cannot be used as evidence to prove the consideration paid, and that all matters contained therein are inadmissible.
• Specific Offer of Evidence: Tomas maintained that the Deed of Sale was not specifically offered to prove the actual consideration of the sale, and therefore the court could not rely on the stated P200,000.00 figure.
• Uncontroverted Testimony: Tomas argued that his testimony establishing the actual purchase price of P700,000.00 was uncontroverted and therefore entitled to weight and credence.
• Solutio Indebiti: Tomas invoked the principle of solutio indebiti, arguing that Jose must return the full amount actually paid (P700,000.00) rather than the lesser amount stated in the void contract.

• Estoppel: Jose argued that Tomas was estopped from questioning the purchase price indicated in the Deed of Sale for failing to immediately raise this objection.
• Parol Evidence Rule: Jose maintained that the terms of an agreement reduced to writing are deemed to include all terms agreed upon, and no other evidence can be admitted to vary such terms.
• Question of Fact: Jose contended that the determination of the actual purchase price was a question of fact already resolved by the Court of Appeals, which found no convincing evidence to support the P700,000.00 claim.

• Admissibility of Void Contracts: Whether a void or inexistent contract is admissible as evidence to prove the consideration paid for purposes of restitution.
• Burden of Proof: Whether the consideration stated in a notarized deed of sale constitutes prima facie evidence of the amount paid, and whether Tomas sufficiently rebutted this presumption to prove payment of P700,000.00.
• Scope of Review: Whether the determination of the actual purchase price paid involves a question of fact proper for resolution in a petition for review on certiorari under Rule 45.

• Admissibility of Void Contracts: A void or inexistent contract, while devoid of force and effect and unenforceable as a contract, remains admissible as evidence to prove matters that occurred during its execution, specifically what each party has given thereunder, to allow restitution and prevent unjust enrichment. The purpose of introducing the document is not to enforce its terms but to ascertain the truth respecting a matter of fact regarding the execution of the contract.
• Prima Facie Evidence: The consideration stated in a notarized Deed of Sale constitutes prima facie evidence of the truth of the facts stated therein, including the amount paid. Tomas failed to adduce satisfactory documentary or testimonial evidence to rebut or contradict the stated consideration of P200,000.00. His sole testimony regarding the P700,000.00 payment was deemed self-serving and insufficient to overcome the prima facie evidence.
• Question of Fact: The determination of whether Tomas paid P700,000.00 or P200,000.00 is a question of fact involving the appreciation of evidence and credibility of witnesses, which is not proper in a petition for review on certiorari under Rule 45. None of the recognized exceptions to this rule (such as when findings are grounded on speculation, manifestly mistaken, or contrary to those of the trial court) apply to the present case.

• Admissibility of Void Contracts as Evidence: While a void or inexistent contract produces no legal effects and cannot be enforced, it is admissible as evidence to prove matters that occurred in the course of its execution, particularly the determination of what each party has given thereunder for purposes of restitution under Article 22 of the Civil Code (unjust enrichment). Evidence is admissible when relevant to the issue and not excluded by the Rules of Court; no provision excludes void documents.
• Prima Facie Evidence of Notarized Documents: A notarized deed of sale is a public document and constitutes prima facie evidence of the truth of the facts stated therein, including the consideration. Such evidence is sufficient to establish a given fact unless rebutted or contradicted.
• Burden of Proof in Civil Cases: The party making allegations has the burden of proving them by a preponderance of evidence, defined as evidence that is more convincing to the court as worthy of belief than that offered in opposition. One who pleads payment has the burden of proving it; mere allegation is not evidence.
• Unjust Enrichment: Under Article 22 of the Civil Code, every person who acquires or comes into possession of something at the expense of another without just or legal ground shall return the same. The principle requires restitution of what has been given under a void contract to prevent unjust retention of benefits.

• "While the terms and provisions of a void contract cannot be enforced since it is deemed inexistent, it does not preclude the admissibility of the contract as evidence to prove matters that occurred in the course of executing the contract, i.e., what each party has given in the execution of the contract."
• "The consideration stated in the notarized Deed of Sale is prima facie evidence of the amount paid by the petitioner."
• "A mere allegation is not evidence, and the person who alleges has the burden of proving his or her allegation with the requisite quantum of evidence, which in civil cases is preponderance of evidence."
• "The purpose of introducing the deed of sale as evidence is not to enforce the terms written in the contract, which is an obligatory force and effect of a valid contract. The deed of sale, rather, is used as a means to determine matters that occurred in the execution of such contract, i.e., the determination of what each party has given under the void contract to allow restitution and prevent unjust enrichment."

• Fuentes v. Roca, G.R. No. 178902, April 21, 2010, 618 SCRA 702 — Cited for the principle that a void or inexistent contract has no force and effect from the very beginning, but when terms have been performed, restoration of what has been given is in order.
• Nool v. Court of Appeals, 342 Phil. 106 (1997) — Cited for the principle that if a void contract has already been performed, the restoration of what has been given is in order.
• Sps. Santos v. Sps. Lumbao, G.R. No. 169129, March 28, 2007, 519 SCRA 408 — Cited for the rule that a notarized deed is prima facie evidence of the truth of the facts stated therein.
• Bognot v. RRI Lending Corporation, G.R. No. 180144, September 24, 2014, 736 SCRA 357 — Cited for the principle that the Supreme Court is not a trier of facts and does not address questions of fact in a Rule 45 petition except under specific exceptions.
• Ramos v. Obispo, G.R. No. 193804, February 27, 2013, 692 SCRA 240 — Cited for the definition of preponderance of evidence and the burden of proof in civil cases.

• Article 22, New Civil Code — Provides that every person who through an act of performance by another acquires something at the expense of the latter without just or legal ground shall return the same; basis for the principle of unjust enrichment.
• Article 1318 in relation to Article 1458, New Civil Code — Define the essential elements of a contract of sale (consent, determinate subject matter, price certain).
• Section 1, Rule 128, Rules of Court — Defines evidence as the means of ascertaining in a judicial proceeding the truth respecting a matter of fact.
• Section 3, Rule 128, Rules of Court — Provides that evidence is admissible when it is relevant to the issue and is not excluded by law or the Rules.

• Antonio T. Carpio (Chairperson)
• Mariano C. Del Castillo
• Jose Catral Mendoza
• Marvic M.V.F. Leonen (On Leave)