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Macapagal vs. Remorin, Bejerano

1) Corazon, Purificacion, Catalina, and Laurelia executed agreements regarding disputed property where Purificacion would own the property on the condition she pay Catalina's mortgage to Laurelia, but Purificacion died. 2) A new agreement stated Catalina would pay her mortgage to Laurelia from proceeds of selling part of the property to an interested buyer. 3) Corazon then sold the property to Laurelia, but Catalina also sold the same property to Macapagal claiming authorization in the agreement. 4) The court ruled the sale between Corazon and Laurelia was valid despite an inaccurate purchase price, as this was a relative simulation that does not nullify the contract

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Allen Jay Araneta Bejerano
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471 views1 page

Macapagal vs. Remorin, Bejerano

1) Corazon, Purificacion, Catalina, and Laurelia executed agreements regarding disputed property where Purificacion would own the property on the condition she pay Catalina's mortgage to Laurelia, but Purificacion died. 2) A new agreement stated Catalina would pay her mortgage to Laurelia from proceeds of selling part of the property to an interested buyer. 3) Corazon then sold the property to Laurelia, but Catalina also sold the same property to Macapagal claiming authorization in the agreement. 4) The court ruled the sale between Corazon and Laurelia was valid despite an inaccurate purchase price, as this was a relative simulation that does not nullify the contract

Uploaded by

Allen Jay Araneta Bejerano
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Kinds of Simulation of Contracts – Art.

1345; Relative
Case No 50, Bejerano
Macapagal vs. Remorin, Caluza (G.R. No. 158380. May 16, 2005.)
FACTS:
In an effort to settle a civil case of illegal transfer of the subject properties, Corazon, Purificacion,
Catalina, and Laurelia executed a Memorandum of Agreement. It stipulated that Corazon granted
Purificacion full ownership and other real rights over the disputed property subject to the condition that
Purificacion shall assume satisfaction of the mortgage debt contracted by Catalina in favor of Laurelia.
However, before agreement could be implemented, Purificacion died. Consequently, another compromise
agreement was executed stating that Corazon and Catalina agreed that title to the southernmost apartment
as well as the portion of the lot occupied thereby shall be transferred direct to its interested buyer with
defendant Catalina assuming and paying (from the proceeds of the sale) her mortgage obligation with
Laurelia.
Corazon then sold the subject Lot to Laurelia by virtue of a deed entitled "Sale of Unsegregated Portion
of Land." However, Catalina also sold the same lot to Macapagal claiming to be authorized under the
Compromise Agreement. Macapagal sought to nullify the sale executed by Corazon in favor of Laurelia
and to declare valid the one executed by Catalina in her favor.
RTC rendered judgment in favor of petitioner. Corazon and Laurelia appealed to the Court of Appeals
which reversed the decision of the trial court.
Macapagal's contention: the sale executed by Catalina in her favor should prevail over theone executed by
Corazon in favor of Laurelia, as Catalina was the one authorized to sell the disputed property under the
Compromise Agreement.
Respondent’s contention: Corazon, the registered owner of the disputed property, did notgive Catalina
authority to sell the lot. It was provided in the Agreement that Catalina shall payoff her mortgage
obligation and incidental expenses from the proceeds of the sale only to reassure Catalina that her
obligation would be paid in the event that Corazon sells the property.
ISSUE:
Whether or not the deed of sale between Corazon and Laurelia is valid.
RULING:
Yes. The fact that the deed of sale between respondents Corazon and Laurelia did not accurately reflect
the true consideration thereof is not cause for declaration of its nullity. When the parties intended to be
bound by the contract except that it did not reflect the actual purchase price of the property, there is only a
relative simulation of the contract which remains valid and enforceable. It cannot be declared null and
void since it does not fall under the category of an absolutely simulated or fictitious contract. The contract
of sale is valid but subject to reformation.
MAINPOINT:
Corazon sold her property to mortgagor Laurelia. Although the contract did not accurately reflect the
actual purchase price of the property,it remains valid because it is only a relative simulation which does
not affect the validity of the contract but does require its reformation.

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