G.R. No.

158380 May 16, 2005

MARIQUITA MACAPAGAL v. CATALINA O. REMORIN,
CORAZON CALUZA-BAMRUNGCHEEP, and LAURELIA
CALUZA-VALENCIANO

Facts: 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.

> Sale (July 1986) of the Property of Corazon Caluza-Bamrungcheep
(which was inherited from her father) by her step-mother Purificacion
Arce-Caluza to Catalina Remorin ~ Corazon left for Thailand (after
marriage to a Thai), Purificacion was entrusted with the administration of
the property, Purificacion obtained Titles in her name by claiming to be
the sole heir of her deceased husband and to have lost her TCTs > Catalina
mortgaged the property to L & R Lending Corporation for P200k and then
to Laurelia Caluza-Valenciano for P295k to pay off the former mortgage >
Civil Suit (December 29, 1986) by Corazon for reconveyance and
damages against Purificacion and Catalina upon discovery of the sale of
her property and Criminal Suit by Corazon against Purificacion and
Catalina for falsification and perjury > Deed of Transfer (May 4, 1987)
executed by Catalina, signed by Purificacion as witness, admitting the
wrong they did in illegally transferring the lots in their names and
acknowledging Corazon to be the rightful owner ~ presented to the
Register of Deeds which caused the cancellation of TCT in favor of
Catalina and issuance of TCT in favor of Corazon but with annotation of
Laurelias mortgage > MOA (September 9, 1988) among Corazon,
Catalina and Laurelia where Corazon would sell her property and from its
proceeds, Catalina would pay her mortgage obligation to Laurelia ~
Approved (September 16, 1988) ~ (revision of the March 21, 1988 MOA
that ceded ownership to Purificacion upon satisfaction of mortgage to
Laurelia due to Purificacions death on July 28, 1988) > Sale (May 24,
1989) of Property by Corazon to Laurelia ~ Issuance of TCT in Laurelias
name (July 21, 1989) > Sale (August 24, 1989) of Property by Catalina to
Mariquita Macapagal > SUIT (November 28, 1989) by Laurelia against
Macapagal for ejectment > SUIT by Macapagal for nullification of the
Sale to Laurelia > CONTENTION of Macapagal: that the contract of sale
between Corazon and Laurelia was invalid because it did not reflect the
true purchase price; that Catalina was authorized to sell the property as
provided in the MOA that Catalina shall pay off her mortgage obligation
and incidental expenses from the proceeds of the sale

> Sale of Property by Corazon to Laurelia is VALID even if it did not
accurately reflect the true consideration, the actual purchase price of the
property > Not cause for declaration of its nullity ~ only a relative
simulation of the contract which remains valid and enforceable ~ valid but
subject to reformation

> Catalina NOT AUTHORIZED to sell the property > Not Authorized
under the MOA ~ MOA not a Waiver by Corazon, as owner of the
property, of right to enjoy and dispose her property ~ Parties did not intend
the MOA to be the document itself considering that they agreed to execute
such other documents or papers as are necessary to implement the
agreement ~ Necessity of a special power of attorney for an agent to enter
into any contract by which the ownership of an immovable property is
transmitted

> Macapagal cannot enforce the MOA > stranger/third party > not
identified outright as the buyer for whom he has been conferred a favor

> Macapagal not a buyer in good faith ~ did not buy the disputed lot from
its registered owner

> Laurelia as the rightful owner > Double sales of real property, ownership
passes to the vendee who, in good faith, first recorded it in the Registry of
Property > Laurelia registered the sale and was issued a TCT in her name
on July 21, 1989, even before the sale to Macapagal