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AVELINA ABARIENTOS REBUSQUILLO v. SPS. DOMINGO

FACTS:

Petitioners Avelina Abarientos Rebusquillo and Salvador Orosco filed a complaint to annul an Affidavit of Self-Adjudication and a Deed of Absolute Sale. They alleged that Avelina, one of the children of Eulalio Abarientos and Victoria Villareal, signed the documents in 2001, believing that they were meant to facilitate the titling of a property. However, in 2003, Avelina discovered that she had actually signed documents transferring her share in the property to respondents Emelinda Rebusquillo-Gualvez and Domingo Gualvez, her daughter and son-in-law. In response, petitioners sought the intervention of the Regional Trial Court (RTC) to declare the documents null and void.

Respondents admitted to the execution of the documents for the purpose of acquiring title to the property. The RTC annulled the documents and ordered the cancellation of the tax declaration in favor of respondents. Dissatisfied, the respondents appealed to the Court of Appeals (CA), arguing that the Deed of Sale cannot be annulled as it is a public document.

The CA reversed the RTC's decision, holding that issues of heirship should be resolved in administration or intestate proceedings. It also stated that the Deed of Sale is entitled to full faith and credit. Petitioners, except for respondent Emelinda, appealed to the Supreme Court seeking the reversal of the CA's decision.

ISSUES:

  1. Whether there is a need for a separate special proceeding for the determination of the status of petitioner as the sole heir of the deceased.

  2. Whether the Affidavit of Self-Adjudication executed by petitioner is valid.

  3. Whether the Deed of Absolute Sale executed by petitioner is valid.

  4. Whether the Deed of Absolute Sale is an absolutely simulated contract.

  5. Whether the form and notarization of the Deed of Absolute Sale makes it valid and binding.

RULING:

  1. There is no need for a separate special proceeding for the determination of the status of petitioner as the sole heir of the deceased. The court held that in cases where there is only one property involved and there is no compelling reason to subject the estate to administration proceedings, the status of the heirs can be determined in a civil case.

  2. The Affidavit of Self-Adjudication executed by petitioner is invalid. The court held that the affiant must be the sole heir of the decedent for self-adjudication to be proper. Since petitioner was not the sole heir, her act of adjudicating the inheritance to herself was invalid.

  3. The Deed of Absolute Sale executed by petitioner is void. The court held that as petitioner was not the sole heir and her Affidavit of Self-Adjudication was invalid, the subject property is still subject to partition. Therefore, petitioner did not have the absolute ownership of the property and could not transfer the absolute ownership to the respondents.

  4. The Deed of Absolute Sale is an absolutely simulated contract. The true intention of the parties in the execution of the Deed of Absolute Sale was simply to "facilitate the titling of the subject property," not to transfer ownership. The failure to take exclusive possession of the property or collect rentals is a clear badge of simulation that renders the whole transaction void.

  5. The form and notarization of the Deed of Absolute Sale do not make it valid and binding. The parole evidence rule does not apply to a simulated and invalid act. The party may present evidence to modify, explain, or add to the terms of the written agreement if the true intent and agreement of the parties is at issue.

PRINCIPLES:

  • In cases where there is only one property involved and there is no compelling reason to subject the estate to administration proceedings, the status of the heirs can be determined in a civil case.

  • An Affidavit of Self-Adjudication is only valid when the affiant is the sole heir of the decedent.

  • A deed of sale executed by a person who does not have absolute ownership over the property is void.

  • Simulation of a contract may be absolute or relative. An absolutely simulated or fictitious contract is void, while a relatively simulated contract may bind the parties if it does not prejudice a third person and is not contrary to law, morals, good customs, public order, or public policy. (Art. 1345, 1346 Civil Code)

  • In absolute simulation, the contract has no substance as the parties do not intend to be bound by it. In relative simulation, the parties conceal their true agreement, but the contract may still be binding if the essential requisites are present. (Heirs of Policronio Ureta Sr. v. Heirs of Liberato Ureta)

  • The form of a contract does not make an otherwise simulated and invalid act valid. The exceptions to the parole evidence rule include intrinsic ambiguity, mistake or imperfection in the written agreement, failure of the written agreement to express the true intent and agreement, validity of the written agreement, and existence of other terms agreed after the execution of the written agreement. (Sec. 9, Rule 130, Rules of Court)