HUMAN RELATIONS

ART. 19. Every person must, in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good faith.

Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall
indemnify the latter for the same.

Art. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.

Malice or bad faith is at the core of Article 19 of the Civil Code.It is an elementary rule in this
jurisdiction that good faith is presumed and that the burden of proving bad faith rests upon the
party alleging the same.

MARRIAGE

1. There is a presumption established in our Rules that a man and woman deporting themselves
as husband and wife have entered into a lawful contract of marriage. However, this presumption
may be contradicted by a party and overcome by evidence.

2. That their consent was freely given is best evidenced by their conscious purpose of acquiring
American citizenship through marriage. There was a full and complete understanding of the legal
tie that would be created between them since it was that precise legal tie which was necessary to
accomplish their goal.
3. A valid marriage license is a requisite of marriage under Article 53 of the Civil Code, and the
absence thereof, save for marriages of exceptional character, renders the marriage void ab initio.

4. Being a public document, the marriage contract is not only a prima facie proof of marriage, but
is also a prima facie evidence of the facts stated therein.

5. Art. 77 NCC pertains to a religious ceremony performed with the purpose of ratifying a marriage
which was solemnized civilly. In the eyes of the law, the marriage already exists; the subsequent
ceremony is undertaken merely to conform to religious practices.

6. The parties are exempted from complying with the required issuance of a ML but it is sine qua
non that:

(1) the parties to the religious ceremony must already be married to each other in
accordance with law (civil marriage); and

(2) the ratifying ceremony is purely religious in nature.

The ceremony held on December 28, 1966 was the ONLY marriage ceremony between Luis &
Severina. This was NOT solemnized as a ratifying religious rite but a civil one officiated by the
mayor, hence, this marriage does not fall under Article 77 NCC, hence W/O A VALID ML , this
marriage is VOID.

7. Under Article 496 NCC "partition may be made by agreement between the parties or by judicial
proceedings x x x." The law does not impose a judicial approval for the agreement to be valid.
Hence, even without the same, the partition was validly done by Luis and Severina through the
execution of the Partition Agreement.

8. AM No. 02-11-10 SC: Rule on the Declaration of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages effective on March 15, 2003

a. Sec. 1. Scope: This Rule shall govern petitions for declaration of absolute nullity of marriage
and annulment of voidable marriages under the Family Code.

b. Sec. 2 (a): That a petition for declaration of absolute nullity of a void marriage may be filed
solely by the husband or wife.

FOREIGN DIVORCE OBTAINED BY ONE SPOUSE

GR: Article 15NCC

Exception: Article 26(2) FC

1. Divorce between Filipinos is VOID and ineffectual under the nationality rule adopted by
Philippine law. Any settlement of property between the parties of the first marriage involving
Filipinos submitted as an incident of a divorce obtained in a foreign country lacks competent
judicial approval, and CANNOT be enforceable against the assets of the husband who contracts
a subsequent marriage.

Ruling: Acquisition of title and registration thereof are two different acts. It is well settled that
registration does not confer title but merely confirms one already existing. The phrase married
to preceding Soledad L. Luna is merely descriptive of the civil status of ATTY. LUNA at the
time of registration of title.
2. The twin elements for the application of Article 26 (2) are:

1. There is a valid marriage that has been celebrated between a Filipino citizen and a foreigner;
and

2. A valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry.

The reckoning point is not the citizenship of the parties at the time of the celebration of the
marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse
capacitating the latter to remarry.

3. Philippine Law does not provide for absolute divorce, hence, our courts cannot grant it.
However, Art. 26(2) FC- w/c addresses foreign marriages or mixed marriages involving a Filipino
and a foreigner- allows a Filipino spouse to contract a subsequent marriage in case the divorce is
validly obtained abroad by an alien spouse capacitating him or her to remarry.

The law confers jurisdiction on Philippine courts to extend the effect of a foreign divorce to a
Filipino spouse w/o undergoing trial to determine the validity of the dissolution of the marriage.

4. Our courts do not take judicial notice of foreign judgments and laws. As a rule, no
sovereign is bound to give effect w/n its dominion to a judgment rendered by a tribunal
of another country. The foreign judgment & its authenticity must be proven as facts under our
rules on evidence, together with the aliens applicable national law to show the effect of the
judgment on the alien himself or herself.

PSYCHOLOGICAL INCAPACITY

Psychological incapacity,' as a ground to nullify a marriage under Article 36 of the Family

Code, should refer to no less than a mental--not merely physical incapacity that causes a party
to be truly incognitive of the basic marital covenants that concomitantly must be assumed and
discharged by the parties to the marriage which include their mutual obligations to live together,
observe love, respect and fidelity and render help and support. The intendment of the law has
been to confine the meaning of psychological incapacity' to the most serious cases of
personality disorders clearly demonstrative of an utter insensitivity or inability to give
meaning and significance to the marriage.

The guidelines have turned- out to be rigid, such that their application to every instance practically
condemned the petitions for declaration of nullity to the fate of certain rejection. Article 36 of the
FC must not be so strictly and too literally read and applied.

In the task of ascertaining the presence of PI as a ground for the nullity of marriage, the courts,
which are concededly not endowed with expertise in the field of psychology, must of necessity
rely on the opinions of experts in order to inform themselves on the matter, and thus enable
themselves to arrive at an intelligent and judicious judgment. The conditions for the malady of
being grave, antecedent and incurable demand the in-depth diagnosis by experts.
The fact that respondent brought her children with her to her mahjong sessions did not only point
to her neglect of parental duties, but also manifested her tendency to expose them to a culture of
gambling. Her willfully exposing her children to the culture of gambling on every occasion of her
mahjong sessions was a very grave and serious act of subordinating their needs for parenting to
the gratification of her own personal and escapist desires.

Xxx In Article 36 , there is no marriage to speak of, as the same is VOID from the very beginning.
To indulge in imagery, the declaration of nullity under Article 36 FC will simply provide a decent
burial to a stillborn marriage.

ABSENCE OF ONE SPOUSE UNDER ARTICLE 41 OF THE FC (DECLARATION OF

PRESUMPTIVE DEATH)
The law did not define what is meant by well-founded belief.Its determination remains on a
case-to-case basis. To be able to comply with this requirement, the present spousemust prove that
his belief was the result of diligent and reasonable efforts and inquiries to locate the absent
spouse and that based on these efforts and inquiries, he believes that under the circumstances, the
absent spouse is already dead. It requires exertion of active effort (not a mere passive one.

The proper remedy for a judicial declaration of presumptive death obtained by extrinsic fraud is
an action to annul the judgment. An affidavit of reappearance is not the proper remedy when the
person declared presumptively dead has never been absent.

Celerina does not admit to have been absent. She also seeks not merely the termination of
the subsequent marriage but also the nullification of its effects.

She contends that reappearance is not a sufficient remedy because it will only terminate the
subsequent marriage but not nullify the effects of the declaration of her presumptive death and the
subsequent marriage.

Celerina is correct. If the subsequent marriage is terminated by mere reappearance, the children
of the subsequent marriage conceived before its termination shall still be considered legitimate
and the property regime will be the same as in a valid marriage. Moreover, a judgment
declaring presumptive death is a defense against prosecution for bigamy.

PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE

PROPERTY REGIMES OF UNIONS WITHOUT VALID MARRIAGES

The conjugal partnership of Anastacio and Flora was dissolved when Flora died.

1. The law provides that it was held that the properties of a dissolved conjugal partnership fall
under a regime of co-ownership among the surviving spouse and the heirs of the deceased spouse
until final liquidation and partition. However, the surviving spouse has an actual and vested 12
undivided share of the properties w/c does not consist of determinate and segregated properties
until liquidation and partition of the conjugal partnership.

Thus, Anastacio, as a co-owner, had the right to freely sell and dispose of his undivided
interest, but not the interest of his co-owners. Consequently, Anastacios sale to spouses
Molina without the consent of the other co- owners was not totally void, for Anastacios rights
or a portion thereof were thereby effectively transferred, making the spouses Molina a co-
owner of the subject property to the extent of Anastacios interest. Spouses Molina would be
a trustee for the benefit of Anastacios co- heirs in respect of any portion that might belong to the
co- heirs after liquidation and partition.

Melecios recourse as a co-owner of the conjugal properties, including the subject property, is an
action for partition under Rule 69 of the Rules of Court.
2. Registration of a property alone in the name of one spouse does not destroy its conjugal nature.
What is material is the time when the property was acquired. Although the property appears
to be registered in the name of the husband, it has the inherent character of conjugal property if it
was acquired for valuable consideration during marriage. It retains its conjugal nature.

3. Under Art. 124 FC, any disposition or encumbrance of a conjugal property by one spouse must
be consented by the other; otherwise, it is VOID. The written consent of the spouse who did not
encumber the property is necessary before any disposition or encumbrance of the conjugal property
can be valid.

WON the conjugal partnership can be held liable for the loan contracted unilaterally by Lilia.
YES. The lower courts may have declared the mortgage void, but the principal obligation is not
affected. It remains valid. The loan can be recovered from the CPG.

4. Ayala Investment & Development Corp. vs. CA, 349 Phil. 942 (1998) has explained how
Article 121 should be applied. There are 2 scenarios considered:

A. where the husband or in this case, the wife, contracts a loan to be used in the family business
and

B. when she acts as a surety or a guarantor.

If she is a mere surety or guarantor, evidence that the family benefited from the loan need to be
presented before the conjugal partnership can be held liable. On the other hand, if the loan was
taken out to be used for the family business, there is no need to prove actual benefit. The law
presumes the family benefited from the loan and the conjugal partnership is held liable.

FAMILY HOME

1. ARTICLE 155. The family home shall be exempt from execution, forced sale or attachment
except:

(1) For nonpayment of taxes;

(2) For debts incurred prior to the constitution of the family home;

(3) For debts secured by mortgages on the premises before or after such constitution; and

(4) For debts due to laborers, mechanics, architects, builders, materialmen and others who have
rendered service or furnished material for the construction of the building.

2. To warrant the execution sale of respondents family home under Article 160, petitioners needed
to establish these facts:

(1) there was an increase in its actual value;

(2) the increase resulted from voluntary improvements on the property introduced by the persons
constituting the family home, its owners or any of its beneficiaries; and

(3) the increased actual value exceeded the maximum allowed under Article 157.

3. The exemption of the FH from attachment, levy or forced sale must be invoked as soon as
possible, otherwise, it is considered as waived. The FHs exemption from execution must be set-
up and proved to the Sheriff before the sale of the property at public auction. The right of
exemption is a personal privilege granted to the judgment debtor & must be claimed by him, NOT
by the Sheriff, at the time of the levy or before the sale at public auction.

PATERNITY, FILIATION, CUSTODY, AND SUPPORT OF CHILDREN

1. Rofolfo who was born during the marriage of Alfredo Aguilar and Candelaria Siasat-
Aguilar and before their respective deaths has sufficiently proved that he is
the legitimate issue of the Aguilar spouses. Alfredo Aguilars SSS Form E-1 satisfies
the requirement for proof of filiation and relationship to the Aguilar spouses under Article 172 of
the Family Code; by itself, said document constitutes an admission of legitimate filiation
in a public document or a private handwritten instrument and signed by the parent concerned.

2. The LAW and only the LAW determines who are legitimate or illegitimate children for ones
legitimacy or illegitimacy cannot ever be compromised. IT SHOULD BE WHAT THE LAW
SAYS AND NOT WHAT THE PARENT SAYS IT IS.

3. The father has duly acknowledged the child as his illegitimate son. The birth certificate of
the child appearing in the Register of Births showed that the father had himself
caused the registration of his birth, he being the informant of the birth to be
registered. Considering that the father had a direct hand in the preparation of the birth
certificate, reliance on the birth certificate of Anacleto as evidence of his paternity was fully
warranted.

4. Illegitimate children SHALL use the surname and SHALL be under the parental authority of
their mother, and SHALL be entitled to support in conformity with this Code. However,
illegitimate children MAY use the surname of their father if their filiation has been expressly
recognized by their father through the record of birth appearing in the civil register, or when
anadmission in a public document or private handwritten instrument is made by the father XXX.
5. HELD: Dominiques Autobiography, though unsigned by him, substantially satisfies the
requirement of the law.

A. Where the private handwritten instrument is the LONE piece of evidence submitted to prove
filiation, there should be strict compliance with the requirement that the same must be signed by
the acknowledging parent;

B. Where the private handwritten instrument is ACCOMPANIED by other relevant and competent
evidence, it suffices that the claim of filiation be shown to have been made and handwritten by the
acknowledging parent as it is merely corroborative of such other evidence.
IN THE EYES OF SOCIETY, A CHILD WITH AN UNKNOWN FATHER BEARS THE
STIGMA OF DISHONOR.

6. Petitioners private handwritten instruments establish Verna Aizas filiation under Art. 172 (2)
FC. The array of evidence presented by respondents, the dates, letters, pictures, and testimonies
are convincing and irrefutable evidence that Verna Aiza is, indeed, petitioners illegitimate child.

The due recognition of an illegitimate child in a record of birth, a will, a statement before a court
of record, or in any authentic writing is, in itself, a consummated act of acknowledgment of the
child, and no further court action is required.

7. The matter of custody is not permanent and unalterable. If the parent who was given custody
suffers a future character change & becomes unfit, the matter of custody can always be re-
examined and adjusted xxx. To be sure, the welfare, the best interest, the benefit, and the good of
the child must be determined as of the time that either parent is chosen to be the custodian.

A judgment involving the custody of a minor child cannot be accorded the force and effect of res
judicata.

8. Does a foreign national have an obligation to support his minor child under Philippine law?

The obligation to give support to a child is a matter that falls under family rights
and duties. Since the respondent is a citizen of Holland, he is subject to the laws of his country,
NOT to Philippine law, as to whether he is obliged to give support to his child, as well as the
consequences of his failure to do so.

While respondent pleaded the laws of the Netherlands in contending that he is not obliged
to support his son, he never proved the same, hence the doctrine of processual presumption shall
govern. Under this doctrine, if the foreign law involved is not properly pleaded and proved, our
courts will presume that the foreign law is the same as our internal law, which enforces the
obligation of parents to support their children and penalizing the non-compliance therewith.

9. Can a foreign national be held criminally liable under R.A. No. 9262 for his unjustified failure
to support his minor child?

Respondent may be made liable under Section 5(e)(2) and (i) of R.A. No. 9262 for unjustly
refusing or failing to give support to petitioners son. The deprivation or denial of financial support
to the child is considered an act of violence against women and children.

PROPERTY

1. One who deals with property registered under the Torrens system has a right to rely on what
appears on the face of the certificate of title and need not inquire further as to the propertys
ownership. A buyer is charged with notice only of the claims annotated on the title.
2. Mere construction of a house on anothers land does not create a co-ownership, regardless of
the value of the house. Article 484 NCC provides that co-ownership exists when the ownership of
an undivided thing or right belongs to different persons. A house and a lot are separately identifiable
properties and can pertain to different owners.

3. Elma and Normita intended to enter into a sale that would transfer the ownership of the subject
matter of their contract but disguised it as a donation due to the ill- advise of the notary public.
The deed of donation they executed was only relatively simulated.

4. The contract shall be presumed to be an equitable mortgage, in any of the following cases:

(1) When the price of a sale with right to repurchase is unusually inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

(3) When upon or after the expiration of the right to repurchase another instrument extending the
period of redemption or granting a new period is executed;

(4) When the purchaser retains for himself a part of the purchase price;

(5) When the vendor binds himself to pay the taxes on the thing sold;

(6) In any other case where it may be fairly inferred that the real intention of the parties is that the
transaction shall secure the payment of a debt or the performance of any other obligation.

5. Valentina and Valeriana can alienate their pro- indiviso shares to Sebastian and Tarcila even
without the knowledge or consent of their co-owner Cornelio because the alienation covered only
the disposition of their respective interests in the common property but "the effect of the alienation
or the mortgage, with respect to the co-owners shall be limited to the portion which may be allotted
to him in the division upon the termination of the co-ownership."

6. The mortgage is valid with respect to Erna s share but with respect to the shares of the other co-owners,
the mortgage is void. While Erna, herself a co-owner, by virtue of Article 493 of the NCC, had the
right to mortgage or even sell her undivided interest in the said properties, she could not dispose
of or mortgage the subject properties in their entirety without the consent of the other co-owners.

7. A co-owner may NOT be compelled to give consent to a sale of his share by the other co-
owners.

The sale by the petitioners of their parts shall not affect the full ownership by the respondents of
the part that belongs to them. XXX With the full ownership of the respondents remaining
unaffected by petitioners sale of their parts, the nature of the property, as co-owned, likewise
stays. In lieu of the petitioners, their vendees shall be co-owners with the respondents.

8. Under Article 494 of the NCC, NO co-owner is obliged to remain in the co-ownership, and his
proper remedy is an action for partition which he may bring at anytime in so far as his share is
concerned. Article 1079 of the NCC defines partition as the separation, division and assignment
of a thing held in common among those to whom it may belong. Xxx A substantive law CANNOT
be amended by a procedural rule.
9. Partition is the separation, division and assignment of a thing held in common among
those to whom it may belong. Every act which is intended to put an end to indivision among
co-heirs and legatees or devisees is deemed to be a partition.

10. Oral partition is effective when the parties have consummated it

a. by the taking of possession and

b. the exercise of ownership of the respective portions set off to each.

NUISANCE

1. Unless a thing is a nuisance per se, such a thing may NOT be abated via an ordinance and extra-
judicially.

The basketball ring is not a nuisance per se that is susceptible to a summary abatement. At most,
it can be considered as a mere nuisance per accidens, for it does not pose an immediate effect upon
the safety of persons and property. It is unlike a mad dog on the loose, which may be killed on
sight because of the immediate danger it poses to the safety and lives of the people; nor is it like
pornographic materials, contaminated meat and narcotic drugs which are inherently pernicious and
which may be summarily destroyed; nor is it similar to a filthy restaurant which may be summarily
padlocked in the interest of the public health.

2. Art. 704 NCC. Any private person may abate a public nuisance which is specially injurious to
him by removing, or if necessary, by destroying the thing which constitutes the same, without
committing a breach of the peace, or doing unnecessary injury. But it is necessary THAT:
1. demand be first made upon the owner or possessor of the property to abate the nuisance;
2. such demand has been rejected;
3. the abatement be approved by the district health officer and executed with the assistance of
the local police; and
4. the value of the destruction does not exceed three thousand pesos.
DONATION

1. The requirement of Article 1358 NCC that acts which have for their object the creation,
transmission, modification or extinguishment of real rights over immovable property, must appear
in a public document, is only for convenience, non-compliance with which does not affect the
validity or enforceability of the acts of the parties as among themselves.

The contract, as well as the evidence presented during the trial, are silent as to the value
of the burden, hence, instead of the law on donations, the rules on contract should govern
the subject contract because the donation is onerous as the burden is imposed upon the donee of a
thing with an undetermined value.

2. The CA is also right in ruling that it is not necessary that the contract be in a public
instrument if it involves immovable property The donor has no factual and legal
basis for the revocation of the donation. First, the ungrateful acts were committed NOT
by the donee; it was her husband who committed them. 2nd, the ungrateful acts were perpetrated
NOT against the donor; it was the petitioners sister who received the alleged ill treatments.
WILLS and SUCCESSION

1. The state of being forgetful does not necessarily make a person mentally unsound so
as to render her unfit to execute a valid will. Under Art. 799 NCC, to be of sound mind, it is
enough that the testator, at the time of making the will, knows the nature of the estate to be disposed
of, the proper objects of her bounty, and the character of the testamentary act. A testator is
presumed to be of sound mind at the time of the execution of her will and the burden is
on the oppositor to prove otherwise.

EXTRINSIC VALIDITY OF WILLS (As To Time): ART. 795

EXTRINSIC VALIDITY OF WILLS (As To Place): ART. 17(1)

INTRINSIC VALIDITY OF WILLS (As To Place): ART. 16(2)

INTRINSIC VALIDITY OF WILLS (As To Time): ART. 2263

FORMALITIES OF A NOTARIAL WILL

1. A will whose attestation clause does not contain the number of pages upon which the will is
written is fatally defective. A will whose attestation clause is not signed by the instrumental
witnesses is also fatally defective. A will which contains a mere jurat and not an acknowledgment
is, likewise, fatally defective. Anyone of these defects is sufficient to deny probate. A notarial will
with all these three defects is just aching for judicial rejection.

2. The attestation clause and an acknowledgment CANNOT be merged in one statement. An

acknowledgment is made by one executing a deed, declaring before a competent officer that the
deed or act is his own. The attestation of a will refers to the act of the witnesses who certify to the
execution of the instrument before them and to the manner of its execution. An attestation must
state all the details the of Article 805 NCC requires. In the absence of the required avowal by
the witnesses themselves, no attestation clause can be deemed embodied in the
Acknowledgement of the Deed of Donation Mortis Causa.

Probate of the HW was opposed on the following grounds:

1. the will and the signature were not in decedents handwriting;

2. some dispositions were signed but were not dated by T;

3. there were alterations and corrections not signed by T.

3. DOCTRINE OF DEPENDENT RELATIVE REVOCATION.

If T revokes his will with the present intention of making a new one and as a substitute, if the new
will is NOT MADE or even if made,it FAILS to take effect for any reason whatsoever, it will be
presumed that the T prefers the old will rather than intestacy.

OBLIGATIONS AND CONTRACTS

1. For a contracting party to be entitled to rescission (or resolution) in accordance with Article
1191 of the Civil Code, the other contracting party must be in substantial breach of the terms and
conditions of their contract. A substantial breach of a contract, unlike slight and casual breaches
thereof, is a fundamental breach that defeats the object of the parties in entering into an agreement.
Here, it cannot be said that petitioners' failure to undertake their obligation under paragraph 7
defeats the object of the parties in entering into the subject contract, considering that the same
paragraph provides respondents contractual recourse in the event of petitioners' non-performance
of the aforesaid obligation, that is, to cause such transfer themselves in behalf and at the expense
of petitioners.

EXTINGUISHMENT OF OBLIGATIONS

PA LO CON MER COM NO

1. Payment; Loss of the thing due; Condonation; Merger or Confusion; Compensation; Novation

2. Obligations are extinguished by payment or performance, the mode most relevant to the factual
situation in the present case. Under Article 1232 of the Civil Code, payment means not only the
delivery of money but also the performance, in any other manner, of an obligation.

3. Article 1253 NCC which provides that if the debt produces interest, payment of the principal
shall not be deemed to have been made until the interests have been covered.

4. Under Article 1256 of the NCC, the debtor shall be released from responsibility by the
consignation of the thing or sum due, without need of prior tender of payment, when:

a.the creditor is absent or unknown, or

b. when he is incapacitated to receive the payment at the time it is due, or

c. when two or more persons claim the same right to collect, or when the title to the obligation has
been lost.

5. Compensation is a mode of extinguishing, to the concurrent amount, the obligations of persons,

who in their own right and as principals, are reciprocally debtors and creditors of each other. Legal
compensation takes place by operation of law when all the requisites are
present, as opposed to conventional compensation which takes place by
agreement of the parties.
6. Though casino chips do not constitute legal tender, there is no law which prohibits their use or
trade outside of the casino which issues them. In any case, it is not unusual nor is it unlikely
that respondent could be paid by his Chinese client at the formers car shop with the casino chips
in question; said transaction, if not common, is nonetheless not unlawful. These chips are paid for
anyway; petitioner would not have parted with the same if their corresponding representative
equivalent in legal tender, goodwill, or otherwise was not received by it in return or exchange.

7. A contract is perfected by mere consent. Consent is manifested by the meeting of the offer and
the acceptance upon the thing and the cause which are to constitute the contract. The offer must
be certain and the acceptance seasonable and absolute. If qualified, the acceptance would merely
constitute a counter-offer as what occurred in this case.

To reach that moment of perfection, the parties must agree on the same thing in the same sense, so
that their minds meet as to all the terms. They must have a distinct intention common to both and
without doubt or difference; until all understand alike, there can be no assent, and therefore no
contract. The minds of parties must meet at every point; nothing can be left open for further
arrangement. So long as there is any uncertainty or indefiniteness, or future negotiations or
considerations to be had between the parties, there is no completed contract, and in fact, there is
no contract at all. There was no valid contract of sale between petitioner and Adela because their
consent was absent.

8. The contract of sale was a mere simulation.

Simulation takes place when the parties do not really want the contract they
have executed to produce the legal effects expressed by its wordings. Article
1345 of the Civil Code provides that the simulation of a contract may either be absolute or relative.
The former takes place when the parties do not intend to be bound at all; the latter, when the parties
conceal their true agreement.