THIRD DIVISION

[G.R. No. 188417. September 24, 2012.]

MILAGROS DE BELEN VDA. DE CABALU, MELITON CABALU, SPS.

ANGELA CABALU and RODOLFO TALAVERA, and PATRICIO ABUS ,
petitioners, vs . SPS. RENATO TABU and DOLORES LAXAMANA,
Municipal Trial Court in Cities, Tarlac City, Branch II , respondents.

DECISION

MENDOZA , J : p

This is a "Petition for Review on Certiorari (under Rule 45)" of the Rules of Court
assailing the June 16, 2009 Decision 1 of the Court of Appeals (CA) in CA-G.R. CV No.
81469 entitled "Milagros De Belen Vda de Cabalu v. Renato Tabu."
The Facts
The property subject of the controversy is a 9,000 square meter lot situated in
Mariwalo, Tarlac, which was a portion of a property registered in the name of the late
Faustina Maslum (Faustina) under Transfer Certificate of Title (TCT) No. 16776 with a total
area of 140,211 square meters. 2
On December 8, 1941, Faustina died without any children. She left a holographic will,
dated July 27, 1939, assigning and distributing her property to her nephews and nieces.
The said holographic will, however, was not probated. One of the heirs was the father of
Domingo Laxamana (Domingo), Benjamin Laxamana, who died in 1960. On March 5, 1975,
Domingo allegedly executed a Deed of Sale of Undivided Parcel of Land disposing of his
9,000 square meter share of the land to Laureano Cabalu. 3
On August 1, 1994, to give effect to the holographic will, the forced and legitimate
heirs of Faustina executed a Deed of Extra-Judicial Succession with Partition. The said
deed imparted 9,000 square meters of the land covered by TCT No. 16776 to Domingo.
Thereafter, on December 14, 1995, Domingo sold 4,500 square meters of the 9,000 square
meters to his nephew, Eleazar Tabamo. The document was captioned Deed of Sale of a
Portion of Land. On May 7, 1996, the remaining 4,500 square meters of Domingo's share in
the partition was registered under his name under TCT No. 281353. 4
On August 4, 1996, Domingo passed away.
On October 8, 1996, two months after his death, Domingo purportedly executed a
Deed of Absolute Sale of TCT No. 281353 in favor of respondent Renato Tabu (Tabu). The
resultant transfer of title was registered as TCT No. 286484. Subsequently, Tabu and his
wife, Dolores Laxamana (respondent spouses), subdivided the said lot into two which
resulted into TCT Nos. 291338 and 291339. 5 IaEASH

On January 15, 1999, respondent Dolores Laxamana-Tabu, together with Julieta

Tubilan-Laxamana, Teresita Laxamana, Erlita Laxamana, and Gretel Laxamana, the heirs of
Domingo, led an unlawful detainer action, docketed as Civil Case No. 7106, against
Meliton Cabalu, Patricio Abus, Roger Talavera, Jesus Villar, Marcos Perez, Arthur Dizon, and
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 all persons claiming rights under them. The heirs claimed that the defendants were merely
allowed to occupy the subject lot by their late father, Domingo, but, when asked to vacate
the property, they refused to do so. The case was ruled in favor of Domingo's heirs and a
writ of execution was subsequently issued. 6
On February 4, 2002, petitioners Milagros de Belen Vda. De Cabalu, Meliton Cabalu,
Spouses Angela Cabalu and Rodolfo Talavera, and Patricio Abus (petitioners), led a case
for Declaration of Nullity of Deed of Absolute Sale, Joint A davit of Nullity of Transfer
Certi cate of Title Nos. 291338 and 291339, Quieting of Title, Reconveyance, Application
for Restraining Order, Injunction and Damages (Civil Case No. 9290) against respondent
spouses before the Regional Trial Court, Branch 63, Tarlac City (RTC). 7
In their complaint, petitioners claimed that they were the lawful owners of the
subject property because it was sold to their father, Laureano Cabalu, by Domingo, through
a Deed of Absolute Sale, dated March 5, 1975. Hence, being the rightful owners by way of
succession, they could not be ejected from the subject property. 8
In their Answer, respondent spouses countered that the deed of sale from which the
petitioners anchored their right over the 9,000 square meter property was null and void
because in 1975, Domingo was not yet the owner of the property, as the same was still
registered in the name of Faustina. Domingo became the owner of the property only on
August 1, 1994, by virtue of the Deed of Extra-Judicial Succession with Partition executed
by the forced heirs of Faustina. In addition, they averred that Domingo was of unsound
mind having been confined in a mental institution for a time. 9
On September 30, 2003, the RTC dismissed the complaint as it found the Deed of
Absolute Sale, dated March 5, 1975, null and void for lack of capacity to sell on the part of
Domingo. Likewise, the Deed of Absolute Sale, dated October 8, 1996, covering the
remaining 4,500 square meters of the subject property was declared ineffective having
been executed by Domingo two months after his death on August 4, 1996. The fallo of the
Decision 1 0 reads: CaEATI

WHEREFORE , in view of the foregoing, the complaint is hereby

DISMISSED , and the decision is hereby rendered by way of:

1. declaring null and void the Deed of Absolute Sale dated March 5,
1975, executed by Domingo Laxamana in favor of Laureano
Cabalu;

2. declaring null and void the Deed of Absolute Sale dated October 8,
1996, executed by Domingo Laxamana in favor of Renato Tabu,
and that TCT Nos. 293338 and 291339, both registered in the name
of Renato Tabu, married to Dolores Laxamana be cancelled;

3. restoring to its former validity, TCT No. 16770 in the name of

Faustina Maslum subject to partition by her lawful heirs.

Costs de oficio.

SO ORDERED. 1 1

Not in conformity, both parties appealed to the CA. Petitioners contended that the
RTC erred in declaring void the Deed of Absolute Sale, dated March 5, 1975. They claimed
that Domingo owned the property, when it was sold to Laureano Cabalu, because he
inherited it from his father, Benjamin, who was one of the heirs of Faustina. Being a co-
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 owner of the property left by Benjamin, Domingo could dispose of the portion he owned,
notwithstanding the will of Faustina not being probated.
Respondent spouses, on the other hand, asserted that the Deed of Sale, dated
March 5, 1975, was spurious and simulated as the signature, PTR and the document
number of the Notary Public were different from the latter's notarized documents. They
added that the deed was without consent, Domingo being of unsound mind at the time of
its execution. Further, they claimed that the RTC erred in canceling TCT No. 266583 and
insisted that the same should be restored to its validity because Benjamin and Domingo
were declared heirs of Faustina. cEITCA

On June 16, 2009, the CA rendered its decision and disposed as follows:
WHEREFORE , in the light of the foregoing, the instant appeal is partially
GRANTED in that the decision of the trial court is AFFIRMED WITH
MODIFICATION that sub-paragraphs 2 & 3 of the disposition, which reads:

"2. declaring null and void the Deed of Absolute Sale dated
October 8, 1996, executed by Domingo Laxamana in favor of
Renato Tabu, and that TCT Nos. 291338 and 291339, both
registered in the name of Renato Tabu, married to Dolores
Laxamana be cancelled;

3. restoring to its former validity, TCT No. 16776 in the name

of Faustina Maslum subject to partition by her lawful heirs,"

are DELETED.

IT IS SO ORDERED . 1 2

In finding Domingo as one of the heirs of Faustina, the CA explained as follows:

It appears from the records that Domingo was a son of Benjamin as
apparent in his Marriage Contract and Benjamin was a nephew of Faustina as
stated in the holographic will and deed of succession with partition. By
representation, when Benjamin died in 1960, Domingo took the place of his father
in succession. In the same vein, the holographic will of Faustina mentioned
Benjamin as one of her heirs to whom Faustina imparted 9,000 square meters of
her property. Likewise, the signatories to the Deed of Extra-judicial Succession
with Partition, heirs of Faustina, particularly declared Domingo as their co-heir in
the succession and partition thereto. Furthermore, the parties in this case
admitted that the relationship was not an issue. 1 3

Although the CA found Domingo to be of sound mind at the time of the sale on
March 5, 1975, it sustained the RTC's declaration of nullity of the sale on the ground that
the deed of sale was simulated.
The CA further held that the RTC erred in canceling TCT No. 266583 in the name of
Domingo and in ordering the restoration of TCT No. 16770, registered in the name of
Faustina, to its former validity, Domingo being an undisputed heir of Faustina.
Hence, petitioners interpose the present petition before this Court anchored on the
following
GROUNDS
(A)
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 THE DEED OF SALE OF UNDIVIDED PARCEL OF LAND EXECUTED ON
MARCH 5, 1975 BY DOMINGO LAXAMANA IN FAVOR OF LAUREANO
CABALU IS VALID BECAUSE IT SHOULD BE ACCORDED THE
PRESUMPTION OF REGULARITY AND DECLARED VALID FOR ALL
PURPOSES AND INTENTS.
(B)

THE SUBPARAGRAPH NO. 2 OF THE DECISION OF THE REGIONAL

TRIAL COURT SHOULD STAY BECAUSE THE HONORABLE COURT OF
APPEALS DID NOT DISCUSS THE ISSUE AND DID NOT STATE THE
LEGAL BASIS WHY SAID PARAGRAPH SHOULD BE DELETED FROM
THE SEPTEMBER 30, 2003 DECISION OF THE REGIONAL TRIAL
COURT. 1 4

The core issues to be resolved are 1] whether the Deed of Sale of Undivided Parcel
of Land covering the 9,000 square meter property executed by Domingo in favor of
Laureano Cabalu on March 5, 1975, is valid; and 2] whether the Deed of Sale, dated
October 8, 1996, covering the 4,500 square meter portion of the 9,000 square meter
property, executed by Domingo in favor of Renato Tabu, is null and void. DICSaH

Petitioners contend that the Deed of Absolute Sale executed by Domingo in favor of
Laureano Cabalu on March 5, 1975 should have been declared valid because it enjoyed the
presumption of regularity. According to them, the subject deed, being a public document,
had in its favor the presumption of regularity, and to contradict the same, there must be
clear, convincing and more than preponderant evidence, otherwise, the document should
be upheld. They insist that the sale transferred rights of ownership in favor of the heirs of
Laureano Cabalu.
They further argue that the CA, in modifying the decision of the RTC, should not have
deleted the portion declaring null and void the Deed of Absolute Sale, dated October 8,
1996, executed by Domingo in favor of Renato Tabu, because at the time of execution of
the said deed of sale, the seller, Domingo was already dead. Being a void document, the
titles originating from the said instrument were also void and should be cancelled.
Respondent spouses, in their Comment 1 5 and Memorandum, 1 6 counter that the
issues raised are not questions of law and call for another calibration of the whole
evidence already passed upon by the RTC and the CA. Yet, they argue that petitioners'
reliance on the validity of the March 5, 1975 Deed of Sale of Undivided Parcel of Land,
based on presumption of regularity, was misplaced because both the RTC and the CA, in
the appreciation of evidence on record, had found said deed as simulated.
It is well to note that both the RTC and the CA found that the evidence established
that the March 5, 1975 Deed of Sale of Undivided Parcel of Land executed by Domingo in
favor of Laureano Cabalu was a ctitious and simulated document. As expounded by the
CA, viz.:
Nevertheless, since there are discrepancies in the signature of the notary
public, his PTR and the document number on the lower-most portion of the
document, as well as the said deed of sale being found only after the plaintiffs-
appellants were ejected by the defendants-appellants; that they were allegedly not
aware that the said property was bought by their father, and that they never
questioned the other half of the property not occupied by them, it is apparent that
the sale dated March 5, 1975 had the earmarks of a simulated deed written all
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 over it. The lower court did not err in pronouncing that it be declared null and void.
17 aHICDc

Petitioners, in support of their claim of validity of the said document of deed, again
invoke the legal presumption of regularity. To reiterate, the RTC and later the CA had ruled
that the sale, dated March 5, 1975, had the earmarks of a simulated deed, hence, the
presumption was already rebutted. Verily and as aptly noted by the respondent spouses,
such presumption of regularity cannot prevail over the facts proven and already
established in the records of this case.
Even on the assumption that the March 5, 1975 deed was not simulated, still the
sale cannot be deemed valid because, at that time, Domingo was not yet the owner of the
property. There is no dispute that the original and registered owner of the subject property
covered by TCT No. 16776, from which the subject 9,000 square meter lot came from, was
Faustina, who during her lifetime had executed a will, dated July 27, 1939. In the said will,
the name of Benjamin, father of Domingo, appeared as one of the heirs. Thus, and as
correctly found by the RTC, even if Benjamin died sometime in 1960, Domingo in 1975
could not yet validly dispose of the whole or even a portion thereof for the reason that he
was not the sole heir of Benjamin, as his mother only died sometime in 1980.
Besides, under Article 1347 of the Civil Code, "No contract may be entered into upon
future inheritance except in cases expressly authorized by law." Paragraph 2 of Article
1347, characterizes a contract entered into upon future inheritance as void. The law
applies when the following requisites concur: (1) the succession has not yet been opened;
(2) the object of the contract forms part of the inheritance; and (3) the promissor has, with
respect to the object, an expectancy of a right which is purely hereditary in nature. 1 8
In this case, at the time the deed was executed, Faustina's will was not yet probated;
the object of the contract, the 9,000 square meter property, still formed part of the
inheritance of his father from the estate of Faustina; and Domingo had a mere inchoate
hereditary right therein.
Domingo became the owner of the said property only on August 1, 1994, the time of
execution of the Deed of Extrajudicial Succession with Partition by the heirs of Faustina,
when the 9,000 square meter lot was adjudicated to him. aEHASI

The CA, therefore, did not err in declaring the March 5, 1975 Deed of Sale null and
void.
Domingo's status as an heir of Faustina by right of representation being undisputed,
the RTC should have maintained the validity of TCT No. 266583 covering the 9,000 square
meter subject property. As correctly concluded by the CA, this served as the inheritance of
Domingo from Faustina.
Regarding the deed of sale covering the remaining 4,500 square meters of the
subject property executed in favor of Renato Tabu, it is evidently null and void. The
document itself, the Deed of Absolute Sale, dated October 8, 1996, readily shows that it
was executed on August 4, 1996 more than two months after the death of Domingo.
Contracting parties must be juristic entities at the time of the consummation of the
contract. Stated otherwise, to form a valid and legal agreement it is necessary that there
be a party capable of contracting and a party capable of being contracted with. Hence, if
any one party to a supposed contract was already dead at the time of its execution, such
contract is undoubtedly simulated and false and, therefore, null and void by reason of its
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 having been made after the death of the party who appears as one of the contracting
parties therein. The death of a person terminates contractual capacity. 1 9
The contract being null and void, the sale to Renato Tabu produced no legal effects
and transmitted no rights whatsoever. Consequently, TCT No. 286484 issued to Tabu by
virtue of the October 8, 1996 Deed of Sale, as well as its derivative titles, TCT Nos. 291338
and 291339, both registered in the name of Renato Tabu, married to Dolores Laxamana,
are likewise void.
The CA erred in deleting that portion in the RTC decision declaring the Deed of
Absolute Sale, dated October 8, 1996, null and void and canceling TCT Nos. 291338 and
291339.
WHEREFORE , the petition is partially GRANTED . The decretal portion of the June
16, 2009 Decision of the Court of Appeals is hereby MODIFIED to read as follows:
1. The Deed of Absolute Sale, dated March 5, 1975, executed by
Domingo Laxamana in favor of Laureano Cabalu, is hereby declared as null and
void. TEcCHD

2. The Deed of Absolute Sale, dated October 8, 1996, executed by

Domingo Laxamana in favor of Renato Tabu, and TCT No. 286484 as well as the
derivative titles TCT Nos. 291338 and 291339, both registered in the name of
Renato Tabu, married to Dolores Laxamana, are hereby declared null and void
and cancelled.
3. TCT No. 281353 in the name of Domingo Laxamana is hereby
ordered restored subject to the partition by his lawful heirs.

SO ORDERED .
Velasco, Jr., Brion, * Perez ** and Perlas-Bernabe, *** JJ., concur.

Footnotes
*Designated acting member, per Special Order No. 1299-E, dated August 28, 2012.
**Designated additional member, in lieu of Associate Justice Diosdado M. Peralta, per Raffle
dated August 31, 2011.
***Designated additional member, in lieu of Associate Justice Roberto A. Abad, per Special
Order No. 1320, dated September 21, 2012.
1.Annex "A" of Petition, rollo, pp. 13-23. Penned by Associate Justice Apolinario D. Bruselas, Jr.,
with Associate Justice Andres B. Reyes, Jr. and Associate Justice Fernanda Lampas
Peralta, concurring.
2.Id. at 14.
3.Id. at 14-15.
4.Id. at 15.
5.Id. at 15-16.

6.Id. at 16.

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 7.Id. at 16-17.

8.Id. at 25.
9.Id.
10.Id. at 24-34.
11.Id. at 32-33.
12.Id. at 22.

13.Id. at 19-20.
14.Id. at 89-90.
15.Dated December 7, 2009, id. 41-43.
16.Dated December 30, 2010, id. at 70-81.

17.Id. at 21.
18.Arrogante v. Deliarte, G.R. No. 152132, July 24, 2007, 528 SCRA 63, 69-70, citing Tolentino,
Civil Code of the Philippines Commentaries and Jurisprudence, Vol. IV, p. 525, 1985.
19.Gochan and Sons Realty Corp. v. Heirs of Raymundo Baba, 456 Phil. 569, 578, (2003).

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