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SPS. MARIANO CASTILLO v. HEIRS OF VICENTE MADRIGAL

FACTS:

The petitioners in this case, spouses Mariano Castillo and Pilar Castillo, filed a complaint before the Regional Trial Court of Manila against the heirs of Vicente Madrigal and/or Susana Realty, Inc. and the Register of Deeds of Manila. They claimed to be registered co-owners of a parcel of land in Ermita, Manila, supported by Transfer Certificate of Title No. 623597 issued in their names and that of their brother Eduardo Castillo. The property was originally declared and taxed by their mother, Petronila Vda. de Castillo.

Allegedly, the petitioners entrusted their brother Eduardo Castillo with the possession, management, and supervision of the land while they were away engaging in business ventures in the provinces. Upon their return, they found out about mysterious transactions involving the transfer of the property to Vicente Madrigal and subsequently to Susana Realty, Inc. The petitioners claimed that they never consented to any transfer to Vicente Madrigal and alleged fraud, simulation, illegality, and serious irregularity in the transactions.

In light of these circumstances, the petitioners sought the remedy of reconveyance. The Court of Appeals, however, ruled against the petitioners, prompting them to seek the reversal of the decision through a petition for review on certiorari.

ISSUES:

  1. Whether the transfer of the property in favor of Vicente Madrigal through fraud, simulation, illegality, and serious irregularity is equivalent to nullity and inexistence of contract.

  2. Whether the Transfer Certificate of Title No. 36280 under the name of Susana Realty Inc. is null and void and without any effect whatsoever.

  3. Whether the remedy of reconveyance is feasible considering the validity of the title from the plaintiffs' mother to them is not affected and without flaw.

RULING:

  1. The transfer of the property in favor of Vicente Madrigal through fraud, simulation, illegality, and serious irregularity is equivalent to nullity and inexistence of contract.

  2. The Transfer Certificate of Title No. 36280 under the name of Susana Realty Inc. is null and void and without any effect whatsoever.

  3. The remedy of reconveyance is feasible considering the validity of the title from the plaintiffs' mother to them is not affected and without flaw.

PRINCIPLES:

  • Fraud, simulation, illegality, and serious irregularity in a contract can render the contract null and void.

  • A certificate of title obtained through fraudulent means is null and void and without any effect.

  • Reconveyance is a feasible remedy when the validity of the title is not affected and without flaw.