[G.R. No.

132887 August 11, 2005]

The Manila Banking Corporation, petitioners, vs. Edmundo S. Silverio and The
Court of Appeals, respondent.

FACTS:

1. Petitioner's/Plaintiff's claim/s

Purificacion Ver sold two parcels of land located at La Huerta, Parañaque City
for ₱1,036,475.00 to Ricardo C. Silverio Sr. The transaction's absolute deed of
sale was not registered, thus title remained with the seller, Ver. The Manila
Banking Corporation (TMBC), filed a case with the Regional Trial Court of Makati
City (RTC) for the collection of a sum of money, also with application for the
issuance of a writ of preliminary attachment against Ricardo, Sr. and the Delta
Motors Corporation.

2. Respondent's/Defendant's claim/s

Respondent, Edmundo Silverio, the nephew of Ricardo, Sr. filed a case in

Makati City RTC for "Cancellation of Notice of Levy on Attachment and Writof
Attachment on Transfer Certificates of Title Nos. 452448 and 452452 ofthe Office
of the Registrar of Land Titles and Deeds of Parañaque City,Metro Manila,"
claiming that Ricardo, Sr. sold him the properties in questionas early as
September 11, 1989. Hence, on July 2, 1990, these propertiescould not be levied
upon to answer for the debt of Ricardo, Sr., who was nolonger the owner.

3. Decisions of the lower courts

Following a merits trial, the lower court dismissed Edmundo's petition.The

counterclaim filed by TMBC was also dismissed for lack of merit. The Court is
forced to rule that the petitioner is not entitled to a cancellation of the
annotations/inscriptions on the notice of levy on attachment and writ of
attachment, and is inclined to agree with opposer's contention that the alleged
 deed of sale in favor of herein petitioner is fictitious and simulated,and thus void
ab initio.
After reviewing the case at Edmundo's request, the appellate courtreversed
and set aside the trial court's decision.
Another decision is issued, ordering the Parañaque City Register ofDeeds to
annul the Notice of Levy on Attachment and the Writ of Attachment
issued on TCT Nos. 452448. Thus, the petition was filed.

ISSUE:

4. Issue/s

Whether or not the contract of sale is valid

HELD:

5. Disposition of the case

The Court of Appeals' decision of October 17, 1997, and its resolution of
February 25, 1998, are hereby reversed and set aside, while the
decision of the Makati City RTC, Branch 145, on May 2, 1995, is reinstated,
dismissing the petition for Cancellation of Notice of Levy on Attachment and Writ
of Attachment on Transfer Certificates of Title Nos. 31444 (452448) and No.
45926 (452452) of the Registry of Deeds of Parañaque City; with costs declared.

6. Dictum

Absolute simulation indicates that there is no existing contract and no real act
is being performed, whereas fraudulent alienation implies that there is a true and
existing transfer or contract. The former can be challenged by any creditor,
including one who comes after the contract, whereas the latter can only be
challenged by creditors who come after the alienation. The insolvency of the
debtor making the simulated transfer is not required for the contract to be null and
void in absolute simulation, whereas infraudulent alienation, the action to
rescind, or accion pauliana, requires that the creditor cannot recover what is due
him in any other way. At last, the action to declare a contract absolutely simulated
does not apply (Articles 1409 and 1410), whereas the accion pauliana to
rescind a fraudulent alienation applies in four years (Article 1389).

In the case at hand, the levy of the subject properties on July 2, 1990
pursuant to a writ of preliminary attachment was validly made because the
properties were invariably Ricardo's, whereas Edmundo, who has no legal interest
in these properties, cannot cause the cancellation of such lien for the reasons
mentioned in his petition