FACTS:

This case involves a dispute over a parcel of land in Cadiz City, Negros Occidental. The land was initially owned by Daniela Solano Vda. de Tating and was later transferred to her granddaughter, Nena Lazalita Tating, through a deed of absolute sale. However, Daniela executed a sworn statement, declaring that the sale was only intended to transfer the title to Nena for the purpose of obtaining a loan. After Daniela's death, her children, represented by Nena, filed a complaint seeking the nullification of the sale and the return of the property to the heirs. The Regional Trial Court (RTC) ruled in favor of the plaintiffs, declaring the sale null and void and ordering the cancellation of the existing title. Nena appealed the decision to the Court of Appeals (CA), which affirmed the RTC's ruling. Nena then filed a petition for certiorari before the Supreme Court, arguing that the CA decision lacked supporting evidence. The Supreme Court acknowledged that the petition should have been filed as a petition for review but opted to treat it as such for the interest of justice. In the petition, the petitioner disputed the admissibility of the sworn statement, emphasizing that Daniela could not be cross-examined. The petitioner also questioned the timing of the discovery of the sworn statement, insinuating that Daniela would have taken action during her lifetime if the sale was indeed simulated.

ISSUES:

1. Whether the Sworn Statement of Daniela, who is already deceased, should have been admitted as evidence and given probative weight.

2. Whether the contract of sale between petitioner and Daniela is simulated.

3. Whether the voluntary declaration of a property for taxation purposes strengthens the claim of acquisition of ownership.

4. Whether the lack of tax receipts or declarations by the private respondents affects their claim of ownership.

5. Whether the silence of Daniela, the alleged seller, regarding the true intention of the Deed of Absolute Sale affects the validity of the sale.

6. Whether possession is a conclusive proof of ownership.

7. Whether the affidavit of Daniela confirming the validity of the sale has probative value.

8. Whether the private respondents adequately proved that the contract of sale was simulated.

9. Whether a trust relationship was created between Daniela and the petitioner.

RULING:

1. The Supreme Court found that the lower courts erred in giving probative value to the Sworn Statement of Daniela. Since Daniela is already deceased and cannot be cross-examined, her sworn statement should not have been given probative weight to prove that the contract of sale between her and petitioner was simulated. Affidavits are generally classified as hearsay evidence and are rejected unless the affiants themselves testify on the matter.

2. The Supreme Court ruled in favor of the petitioner and held that the contract of sale between petitioner and Daniela is not simulated. Private respondents failed to present sufficient evidence, aside from Daniela's sworn statement, to prove their claim that Daniela had no intention of disposing of her property. Petitioner's payment of real estate taxes in her name and her assertion of rights of ownership over the property through declarations and receipts constituted at least proof of her claim of title over the property.

3. Yes, the voluntary declaration of a property for taxation purposes strengthens the claim of acquisition of ownership.

4. Yes, the lack of tax receipts or declarations by the private respondents affects their claim of ownership.

5. No, the silence of Daniela regarding the true intention of the Deed of Absolute Sale does not affect the validity of the sale.

6. Yes, possession is not a conclusive proof of ownership.

7. No, the affidavit of Daniela confirming the validity of the sale has no probative value.

8. No, the private respondents failed to prove that the contract of sale was simulated.

9. No, there is no need to discuss whether a trust relationship was created between Daniela and the petitioner.

PRINCIPLES:

• A contract is simulated if the parties do not intend to be bound at all or if they conceal their true agreement.

• The intention of the parties is the primary consideration in determining the true nature of a contract.

• The admissibility of evidence depends on its relevance and competence, while the weight of evidence pertains to its tendency to convince and persuade.

• Affidavits are generally classified as hearsay evidence and are rejected unless the affiants themselves testify on the matter.

• The burden of proof lies on the plaintiff to prove the material allegations of the complaint.

• The voluntary declaration of a property for taxation purposes strengthens the claim of acquisition of ownership.

• Proof of payment of taxes or lack thereof can affect the claim of ownership.

• Ownership and possession are two different legal concepts.

• The execution of a notarized deed of conveyance can be equivalent to the delivery of the property.

• The legal presumption is in favor of the validity of contracts.

• The party impugning the regularity of a contract has the burden of proving its simulation.