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Suntay vs.

CA
NATURE
Petition for Review on Certiorari of the Amended Decision
of respondent Court of Appeals and of its Resolution
denying petitioner's motion for reconsideration.
FACTS
- Federico Suntay is a wealthy land owner and rice miller
from Bulacan. He owned a 5,118 square-meter land in
Bulacan. On it was a rica mill, a warehouse and other
improvements.
- Federico applied as a miller-contractor of the then
National Rice and Com Corporation (NARIC). His
application was prepared by his nephew lawyer Rafael
Suntay. But it was disapproved because at that time he
was tied up w/ several unpaid loans.
- For purposes of circumvention, he had thought of
allowing Rafael to make the application for him. Rafael
prepared an absolute deed of sale whereby Federico, for
and in consideration of P20, 000.00 conveyed to Rafael
said parcel of land with all its existing structures.
- Federico claims that the sale was merely
fictitious/simulated and has been executed only for
purposes of accommodation.
- Less than three months after this conveyance, Rafael
sold it back to Federico for the same amount of P20,000.
It was notarized by Atty. Herminio V. Flores.
- However, the said document was not the said deed of
sale but a certain "real estate mortgage of a parcel of
land to secure a loan of P3,500.00 in favor of the
Hagonoy Rural Bank. It could not be found in the notarial
register as well
- Federico through his new counsel requested that Rafael
have TCT No. T-36714 so that he can have the counter

deed of sale in favor registered in his. But the request


was turned down.
- So Federicos counsel filed a case in the CFI. The trial
court upheld the validity and genuineness of the deed of
sale executed by Federico in favor of Rafael, but it ruled
that the counter-deed, executed by Rafael in favor of
Federico, was simulated and without consideration,
hence, null and void ab initio. (it was not dated, not
notarized and above all it has no consideration because
plaintiff did not pay defendant the consideration of the
sale in the sum of P20,000.00)
- CA ruled the same. BUT it then reversed itself upon
petition and said that the first Deed of Sale was a mere
accommodation arrangement executed without any
consideration and therefore a simulated contract of sale.
Considering the ff. circumstances:
> The 2 instruments were executed closely one after the
other
> The close relationship between the parties
>the value and location of the property purportedly sold.
(P20, 000)
> Rafael also never assumed ownership nor did he gather
any benefit.
- Rafael Suntay on the other hand insists that the
transaction was a veritable sale.
ISSUE
WON the deed of sale executed in favor of Rafael Suntay
was valid
HELD
NO
Reasoning The history and relationship of trust,
interdependence and intimacy between the late Rafael

and Federico is an unmistakable token of simulation. It


has been observed that fraud is generally accompanied
by trust.
- The late Rafael insisted that the sale to him of his
uncle's property was in fact a "dacion en pago" in
satisfaction of Federico's unpaid attorney's fees. But such
claim cannot prosper. He did not even tell Federico that
he considered such to be his fee. Federico was also liquid
enough to pay him.
- All circumstances point to the conclusion that such was
simulated transaction.
Ratio A contract of purchase and sale is void and
produces no effect whatsoever where the same is without
cause or consideration in that the purchase price, which
appears thereon as paid, has in fact never been paid by
the purchaser to the vendor two veritable legal
presumptions:
first,
that
there
was
sufficient
consideration for the contract and, second, that it was the
result of a fair and regular private transaction. These
presumptions if shown to hold, infer prima facie the
transactions validity, except that it must yield to the
evidence adduced.
Disposition WHEREFORE, the Amended Decision
promulgated by the Court of Appeals on December 15,
1993 in CA-G.R. CV No. 08179 is hereby AFFIRMED IN
TOTO.