G.R. No. 144576 - SPOUSES ISABELO AND ERLINDA PAYONGAYONG, VS. HON. COURT OF APPEALS, SPOUSES CLEMENTE AND ROSALIA SALVADOR.D E C I S I O N - Supreme Court E-Library

Ruling

accordingly acquired valid and indefeasible title thereto. The law is thus in respondents favor. Article 1544 of the Civil Code so provides: Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. There being double sale of an immovable property, as the above-quoted provision instructs, ownership shall be transferred (1) to the person acquiring it who in good faith first recorded it in the Registry of Property; (2) in default thereof, to the person who in good faith was first in possession; and (3) in default thereof, to the person who presents the oldest title, provided there is good faith. [30] The trial and appellate courts thus correctly accorded preferential rights to respondents who had the sale registered in their favor. Petitioners claim, however, that the sale between Mendoza and respondents was simulated. Simulation occurs when an apparent contract is a declaration of a fictitious will, deliberately made by agreement of the parties, in order to produce, for the purpose of deception, the appearance of a juridical act which does not exist or is different from that which was really executed. [31] Its requisites are: a) an outward declaration of will different from the will of the parties; b) the false appearance must have been intended by mutual agreement; and c) the purpose is to deceive third persons. [32] The basic characteristic then of a simulated contract is that it is not really desired or intended to produce legal effects or does not in any way alter the juridical situation of the parties. [33] The cancellation of Mendozas certificate of title over the property and the procurement of one in its stead in the name of respondents, which acts were directed towards the fulfillment of the purpose of the contract, unmistakably show the parties intention to give effect to their agreement. The claim of simulation does not thus lie. That petitioners and respondents were forced to litigate due to the deceitful acts of the spouses Mendoza, this Court is not unmindful. It cannot be denied, however, that petitioners failure to register the sale in their favor made it possible for the Mendozas to sell the same property to respondents. Under the circumstances, this Court cannot come to petitioners succor at the expense of respondents-innocent purchasers in good faith. Petitioners are not without remedy, however. They may bring an action for damages against the spouses Mendoza. [34] WHEREFORE, the petition is DENIED.