MAPALO V. MAPALO, G.R. NOS. 21489 & 21623 MAY 19, 1966, 17 SCRA 114.

FACTS:
Spouses Miguel Mapalo and Candida Quiba, illiterate farmers, were registered owners of a residential land
in Manaoag, Pangasinan. Out of love and affection for Maximo Mapalo, a brother of Miguel who was about
to get married, decided to donate the eastern half of the land to Mapalo. However, they were deceived into
signing, on October 15, 1936, a deed of absolute sale over the entire land in his favor. Their signatures then,
were procured by fraud—they were made to believe by Maximo Mapalo and by the attorney who acted as
notary public who “translated” the document that the same was a deed of donation in Maximo's favor
covering one-half (the eastern half) of their land. The document of sale stated a consideration of P500, but
the spouses did not receive anything of value for the land. After the execution of the afore-stated document,
the spouses immediately built a permanent fence in the middle of their land, segregating the eastern portion
from its western portion. Meanwhile, Mapalo registered the deed of sale in his favor and obtained his name
over the entire land. Thirteen years later, he sold the entire land for P2,500, in favor of Evaristo, Petronila
Pacifico, and Miguel Narciso. The sale was registered and a transfer certificate was issued for the whole
land. The Narcisos took possession of the eastern portion of the land after the sale was made. A year after,
they filed a suit to be declared owners of the land, along with damages, and for rentals. The Mapalo spouses
filed their answer with a counterclaim on March 17, 1965, seeking cancellation of the Transfer Certificate of
Title of the Narcisos as to the western half of the land, on the grounds that their (Mapalo spouses) signatures
to the deed of sale of 1936 was procured by fraud and that the Narcisos were buyers in bad faith. They asked
for reconveyance to them of the western portion of the land and issuance of a Transfer Certificate of Title in
their names as to said portion.

ISSUE:
1. Whether the deed of absolute sale executed in 1936 was null and void.
2. Whether Narcisos were purchasers in good faith.

RULING:
1st issue: YES, the sale was void.

The Civil Code governs the transaction because it was executed in 1936
Accordingly, since the deed of sale of 1936 is governed by the Old Civil Code, it should be asked whether
its case is one wherein there is no consideration, or one with a statement of a false consideration. If the
former, it is void and inexistent; if the latter, only voidable, under the Old Civil Code. There is lack of
consideration. As observed earlier, the deed of sale of 1936 stated that it had for its consideration Five
Hundred (P500.00) Pesos. In fact, however, said consideration was totally absent. The problem, therefore, is
whether a deed which states a consideration that in fact did not exist, is a contract without consideration, and
therefore void ab initio, or a contract with a false consideration, and therefore, at least under the Old Civil
Code, voidable.

When there is no consideration, the contract is null and void.

According to Manresa, what is meant by a contract that states a false consideration is one that has in fact a
real consideration but the same is not the one stated in the document. A contract of purchase and sale is null
and 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.

2nd issue: No, they were no purchasers in good faith.

Narcisos were not buyers in good faith. Aside from the fact that all the parties in these cases are neighbors,
except Maximo Mapalo the foregoing facts are explicit enough and sufficiently reveal that the Narcisos were
aware of the nature and extent of the interest of Maximo Mapalo their vendor, over the above-described land
before and at the time the deed of sale in their favor was executed.
The Narcisos were purchaser-in-value but not purchasers in good faith. What was the necessity, purpose and
reason of Pacifico Narciso in still going to the spouses Mapalo and asked them to permit their brother
Maximo to dispose of the above-described land? To this question it is safe to state that this act of Pacifico
Narciso is a conclusive manifestation that they (the Narcisos) did not only have prior knowledge of the
ownership of said spouses over the western half portion in question but that they also have recognized said
ownership. It also conclusively shows their prior knowledge of the want of dominion on the part of their
vendor Maximo Mapalo over the whole land and also of the flaw of his title thereto. Under this situation, the
Narcisos may be considered purchasers in value but certainly not as purchasers in good faith.
The rule under the Civil Code, again be it the old or the new, is that contracts without a cause or
consideration produce no effect whatsoever. Nonetheless, under the Old Civil Code, the statement of a false
consideration renders the contract voidable, unless it is proven that it is supported by another real and licit
consideration. And it is further provided by the Old Civil Code that the action for annulment of a contract on
the ground of falsity of consideration shall last four years, the term to run from the date of the consummation
of the contract. Since the deed of sale of 1936 is governed by the Old Civil Code, it should be asked whether
its case is one wherein there is no consideration, or one with a statement of a false consideration. If the
former, it is void and inexistent; if the latter, only voidable, under the Old Civil Code. As observed earlier,
the deed of sale of 1936 stated that it had for its consideration Five Hundred (P500.00) Pesos. In fact,
however, said consideration was totally absent. The problem, therefore, is whether a deed which states a
consideration that in fact did not exist, is a contract without consideration, and therefore void ab initio, or a
contract with a false consideration, and therefore, at least under the Old Civil Code, voidable.

Facts:
The spouses Miguel Mapalo and Candida Quiba were the registered owners of a residential land located in
Pangasinan. The spouses donated the eastern half of the land to Miguel’s brother – Maximo Mapalo who
was about to get married. However, they were deceived into signing, on October 15, 1936, a deed of
absolute sale over the entire land in Maximo’s favor. Their signatures were procured by fraud because they
were made to believe by Maximo and the lawyer who acted as notary public who “translated” the document,
that the same was a deed of donation in Maximo’s favor covering one-half of their land. (It must be noted
that the spouses are illiterate farmers).Although the document of sale stated a consideration of Five Hundred
(P500.00) Pesos, the aforesaid spouses did not receive anything of value for the land.
In 1938, Maximo Mapalo, without the consent of the spouse, registered the sale in his favor. After thirteen
years (1951), he sold the land to the Narcisos, who thereafter registered the sale and obtained a title in their
favor. In 1952, the Narcisos filed a complaint with the CFI to be declared owners of the entire land, for
possession of its western portion; for damages; and for rentals. The Mapalo spouses filed a counterclaim
seeking cancellation of the the Narcisos’ titles as to the western half of the land. They said that their
signatures to the deed of sale of 1936 was procured by fraud and that the Narcisos were buyers in bad
faith.They also filed another complaint wherein they asked the court to declare deeds of sale of 1936 and of
1951 over the land in question be declared null and void as to the western half of said land.
CFI ruled in favor of the Mapalo spouses. Upon appeal filed by Narcisos, CA reversed the lower court’s
ruling solely on the ground that the consent of the Mapalo spouses to the deed of sale of 1936 having been
obtained by fraud, the same was voidable, not void ab initio, and, therefore, the action to annul the same,
within four years from notice of the fraud, had long prescribed. (From March 15, 1938). Hence, this appeal.

Pangilinan et al. v. Court of Appeals, 278 SCRA 98.

 LAPERAL V. ROGERO, G.R. NO. 16590, JAN.30, 1965, 13 SCRA 27.

FACTS:
Roberto Laperal sold his property to the Japanese Military Controlled Republic of the Philippines for the
sum of P500,000 in Japanese Military War notes. When Japanese occupation was over, Laperal filed an
action for recovery of his property with the alien property custodian alleging that the sale took place during
the Japanese regime and was made under duress and the consideration was grossly inadequate. The trial
court ruled in favor of Laperal.

Laperal’s contention:
The main allegations of the complaint were that appellee executed the deed of sale of April 12, 1944 in favor
of the occupation Republic of the Philippines under duress and due to the threats employed by the
representatives of the Japanese Military Administration, and that the consideration of P500,000.00 in
Japanese Military notes was grossly inadequate.

Respondent’s contention:
The Philippine Alien Property Administrator denied, for lack of knowledge and information, plaintiff’s
allegations concerning the circumstances under which the sale of the property was allegedly made. The
Register of Deeds of Manila was declared in default due to his failure to answer the complaint within the
reglementary period.
ISSUE:
Was the deed of sale executed under duress that the contract can be nullified?

HELD:
With respect to the first issue, the lower court found on the basis of the evidence before it, that the sale was
executed under duress.
(1) It is of common knowledge that, during the second world war, the Japanese army of occupation in the
Philippines, did occupy and take private properties in the City of Manila and elsewhere in the country
without the consent of their respective owners, for their use in the prosecution of the war, resorting in
some cases to the expedient of making the owners execute deeds of sale or contracts of lease;

(2) It is not denied that appellee, before the war and at the time of the execution of the questioned sale, was
a very rich man with extensive real state holdings principally in Manila. The record discloses in this
connection, that from 1914 up to the date of the sale, he had not disposed of a single property by sale.
The record further shows that at the time of the sale, he was in possession of a considerable amount of
money, both in genuine Philippine currency and in Japanese military notes. Highly solvent as he was at
the time, it was improbable – to say the least – that he would dispose of such valuable property as the
one in question. If he had been in need of money at all, he would probably have sold some other much
less desirable property. One may believe that the sale in question was voluntary only by assuming that
Laperal sold the property involved to collaborate in the attainment of the ends pursued by the Japanese
army of occupation – an assumption completely unjustified in this case in view of the absolute absence
of evidence, direct or indirect, that Laperal collaborated or had ever intended to collaborate with the
enemy.

(3) The consideration paid for the property, namely the sum of P500,000.00 in Japanese military notes, was
grossly inadequate. It has been agreed, for the purpose of this case, that at the time of the sale (April
1944), a prewar Philippine peso was worth fourteen Japanese military pesos. On the other hand, the
evidence of record shows that the pre-war assessed value of the property in question was P92,995.00
which, if reduced to its equivalent value in terms of Japanese military notes as of April 1944, would
have amounted to around P1,300.000.00 (Japanese military notes). We must also consider the fact that
the pre-war assessed value of the property did not represent its real or actual value which could easily be
around P200,000.00. Reduced to its equivalent in Japanese military notes, this would have meant around
P2,800,000.00. Instead, he was merely paid P500,000.00 in Japanese military notes, or the equivalent of
something around P35,000.00, Philippine currency, at the time.
 DE LEON V. SALVADOR, G.R. NO. 31603, DEC.28, 1970, 36 SCRA 567.
FACTS:
Eusebio Bernabe’s (judgment debtor) properties were garnished and sold in an auction sale to satisfy a
judgment in favor of Enrique De Leon. The highest bidder for the total sum of P30,194.00 was Aurora de
Leon, sister of judgment creditor. Bernabe was given a redemption period of 1 year commencing from the
time of the auction sale. However, instead of redeeming his properties, he filed a case to annul the auction
sale on the ground of gross inadequacy of price and ordered a new auction sale. He claimed that his
properties can cost around P400,000.00. The court of Judge Serafin Salvador issued a writ of injunction
against respondents and summarily granted the motions of Bernabe.

ISSUE:
WON the auction sale be annulled on the ground of inadequacy of price.

HELD:
No. In ordinary sales, by reasons of equity, a transaction may be invalidated on the ground of inadequacy of
price. In forced sales, as when a sale is made at a public auction, the owner has the right to redeem. When
there is a right to redeem, inadequacy of price is immaterial because judgment debtor can better acquire the
property or also sell his right to redeem and thus recover the loss he claims to have suffered by reason of the
price obtained from the auction sale.