SPOUSES BERNARDO BUENAVENTURA and CONSOLACION

JOAQUIN, SPOUSES JUANITO EDRA and NORA JOAQUIN, SPOUSES

RUFINO VALDOZ and EMMA JOAQUIN, and NATIVIDAD JOAQUIN,
petitioners,
vs .
COURT OF APPEALS, SPOUSES LEONARDO JOAQUIN
and FELICIANA LANDRITO, SPOUSES FIDEL JOAQUIN and
CONCHITA BERNARDO, SPOUSES TOMAS JOAQUIN and SOLEDAD
ALCORAN, SPOUSES ARTEMIO JOAQUIN and SOCORRO ANGELES,
SPOUSES ALEXANDER MENDOZA and CLARITA JOAQUIN, SPOUSES
TELESFORO CARREON and FELICITAS JOAQUIN, SPOUSES DANILO
VALDOZ and FE JOAQUIN, and SPOUSES GAVINO JOAQUIN and LEA
ASIS, respondents.
G.R. No. 126376. November 20, 2003
CARPIO, J : p

Digest Author: Jude Fanila

Topic: V. Price or Consideration – Absence of Consideration

Case Summary: Defendant Spouses Joaquin sold their land to their co-defendant children. Plaintiff
children got mad, argued that the deeds of sale over the properties in question were void for lack of
consideration. SC said that mere allegation that there was a simulation of contract insufficient to overturn
the fact that the deeds of sale themselves provided that there was consideration.

Petitioners: Consolacion, Nora, Emma, Natividad – Children of Sps.

Respondents: Sps. Leonardo Joaquin and Feliciana Landrito – Parents
Fidel, Tomas, Artemio, Clarita, Felicitas, Fe, Gavino – Children of Sps.

Doctrines Involved: It is not the act of payment of price that determines the validity of a contract of sale.
Payment of the price has nothing to do with the perfection of the contract. Payment of the
price goes into the performance of the contract. Failure to pay the consideration is
different from lack of consideration. The former results in a right to demand the fulfillment
or cancellation of the obligation under an existing valid contract while the latter prevents
the existence of a valid contract.

FACTS:
1. Defendant Spouses, Joaquin and Feliciana executed (6) deeds of sale of property in favor of their
co-defendant children. Covering the following lots with the following terms.
a. Felicitas – Lot 168-C-7 – Executed July 11, 1978 for P6k
b. Clarita – Lot 168-I-3 – Executed June 7, 1979 for P2k
c. Fidel – Lot 168-I-1 – Executed on May 12 1988 for P54.3k
d. Artemio – Lot 168-I-2 – Executed o Ma 12, 1988 for P54.3k
e. Tomas – Lot 168-C-4 – Executed on September 9, 1988 for P20k
f. Gavino – Lot 168-C-1 – Executed on October 7, 1988 for P25k
 2. Thereafter, plaintiffs who are the other children of the spouses filed a complaint before the RTC
of Makati, seeking to annul the deeds of sale for being void due to lack of consideration and
impairment of legitime.
a. RTC – dismissed the complaint finding that the right of the compulsory heirs to their
legitime commences only from the moment of death as provided in NCC 777 thus,
plaintiffs had no cause of action. Also found that the deeds of sale themselves showed
that there was valuable consideration.
3. On appeal, the CA affirmed the RTC.
4. Led to current appeal.

ARGUMENTS BEFORE THE SUPREME COURT:

 Petitioner’s Argument related to Doctrine: (1) That there was no valid consideration; (2) Even
assuming there was, the consideration was grossly inadequate; (3) that the deeds of sale do not
express the true intent of the parties – basically saying that actual purpose was a conspiracy to
deprive plaintiff children of their interest over the subject properties

ISSUES + HELD:
1. W/N plaintiff children have legal interest over the subject property? –NO.
a. Deprivation of legitime – As a rule, an action must be prosecuted in the name of the real
party-in-interest. A real party-in-interest is a party who would be benefited or injured by
the judgment or, the party entitled to the avails of the suit.
i. Real party-in-interest in contracts – In an action for annulment of contracts, the
real parties are those who are either parties to the agreement, are bound by the
agreement, or those who are prejudiced in their rights with respect to one of the
contracting parties and can show detriment which would positively result to them
from the contract even though they did not intervene in it.
ii. As applied here, children have no right to their parent’s property. Instead, such
rights were mere expectations or inchoate rights which would vest only upon the
death of the parents. Thus, they cannot be considered as a party who has legal
interest.
2. W/N the deeds of sale are void for lack of consideration? – NO
a. Simulated Contracts – A contract of sale is a consensual contract. It becomes valid and
binding upon the meeting of the minds as to the price. If there is no meeting of the minds
of the parties as to the price because the priced stipulated in the contract, then the contract
is void as provided by NCC 1471. This is contrasted in situations where the real price is
not stated in the contract. In the latter, the contract of sale is valid but subject to
reformation.
i. Petitioner-children failed to show that the deeds of sale were absolutely
simulated. The only evidence they presented was the testimony of one Emma
Joaquin Valdoz which testified that their father, respondent Leonardo Joaquin
told her that he would transfer a lot to her through a deed of sale without payment
of the purchase price.
1. This allegation was not supported by any other evidence. Furthermore,
petitioners failed to submit evidence as to the financial capacity of their
siblings to buy the said lots.
ii. In contrast, the deeds of sale themselves showed that there was a purchase price
for each of the lots sold. This shows that there was a meeting of the minds as to
the purchase price and that the real price was stated in the Deeds of sale. It was
also found that all of the defendant siblings have paid the prices in full at the time
of the filing of the complaint.
 3. W/N Deeds of sale are void for gross inadequacy of price? – NO
a. Applicable Laws – NCC 1355 and NCC 1470 1 - as a rule, gross inadequacy of price does
not affect a contract of sale, except if it may indicate a defect in the consent or that the
parties really intended a donation or some other form of contract.
i. Here, petitioners failed to prove any of the instances in NCC 1355 and 1470
which would affect the validity of the contracts. There is no requirement that the
price be equal to the exact value of the subject matter of sale.
ii. Valles v. Villa – SC cited this, basically saying that courts will not step in to
annul the effects of one-sided or foolish contracts. They will only step in if there
is a violation of the law or a finding of an actionable wrong. i
iii. Findings of Lower Courts – Factual findings of appellate court are conclusive
and carry greater weight when they coincide with the findings of the trial court.
As a rule, SC will not re-evaluate evidence unless there is a showing that the
findings of the lower court are totally devoid of support or are clearly erroneous
so as to constitute serious abuse of discretion.
1. Here, no showing of any of the above scenarios so SC does not disturb
finding that lots were sold for valid consideration and that there was full
payment.

RULING:

WHEREFORE, we AFFIRM the decision of the Court of Appeals in toto

SO ORDERED

1
Art. 1355.Except in cases specified by law, lesion or inadequacy of cause shall not invalidate a contract, unless
there has been fraud, mistake or undue influence.
Art. 1470.Gross inadequacy of price does not affect a contract of sale except as may indicate a defect in the
consent, or that the parties really intended a donation or some other act or contract
i
Courts cannot follow one every step of his life and extricate him from bad bargains, protect him from unwise
investments, relieve him from one-sided contracts, or annul the effects of foolish acts. Courts cannot constitute
themselves guardians of persons who are not legally incompetent. Courts operate not because one person has been
defeated or overcome by another, but because he has been defeated or overcome illegally . Men may do foolish things,
make ridiculous contracts, use miserable judgment, and lose money by them — indeed, all they have in the world; but not
for that alone can the law intervene and restore. There must be, in addition, a violation of the law, the commission of
what the law knows as an actionable wrong, before the courts are authorized to lay hold of the situation and remedy it.