SUNTAY v CA

G.R. No. 114950 December 19, 1995

Facts: Federico Suntay was the registered owner of a parcel of land in Bulacan. Federico, in a
letter, dated September 30, 1960, applied as a miller-contractor of the then National Rice and
Corn Corporation (NARIC). 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. Said deed was notarized.

Upon the execution and registration of the first deed, Certificate of Title No. 0-2015 in the
name of Federico was cancelled and in lieu thereof, TCT No. T-36714 was issued in the name of
Rafael. Even after the execution of the deed, Federico remained in possession of the property
sold in concept of owner. Significantly, notwithstanding the fact that Rafael became the titled
owner of said land and rice mill, he never made any attempt to take possession thereof at any
time,while Federico continued to exercise rights of absolute ownership over the property.

Federico requested Rafael to deliver his copy of the TCT so that Federico could have the
counter deed of sale in his favor registered in his name. Rafael opposed as the said deed was a
counterfeit. Federico filed a complaint about reconveyance assailing the validity of the first
deed of sale, interjecting that he has been in continuous possession of the properties in
question. While the trial court favored the petitioner, the CA reversed the decision of the trial
court by stating that the first deed of sale is absolutely simulated and fictitious.

Issue:
Is the first deed of sale simulated and therefore invalid? YES.

Held:
The Deed of Sale was absolutely fictitious and simulated. Facts of the case establish the
closeness, mutual trust and business and professional interdependence between Rafael and
Federico. Rafael admitted in open court that he had come into the possession thereof in the
course of rendering legal services to his uncle. These documents on record and the testimonies
of the late Rafael and private respondent establish the existence of, not only the facts therein
stated, but also the circumstance pertaining to the nature of the relationship between private
respondent and the late Rafael. The Court of Appeals simply took a second look at the evidence
on record as was its bounden duty upon the filing of a motion for reconsideration and could no
longer ignore that the close relationship between the late Rafael and private respondent was
indeed a badge of simulation.Further, most protuberant index of simulation is the complete
absence of an attempt in any manner on the part of the late Rafael to assert his rights of
ownership over the land and rice mill in question. After the sale, he should have entered the
land and occupied the premises thereof. He did not even attempt to. If he stood as owner, he
would have collected rentals from Federico for the use and occupation of the land and its
improvements. All that the late Rafael had was a title in his name.