G.R. No.

L-23002 July 31, 1967

CONCEPCION FELIX VDA. DE RODRIGUEZ, plaintiff-appellant,
vs.
GERONIMO RODRIGUEZ., ET AL., defendants-appellees.
Ozaeta, Gibbs and Ozaeta for plaintiff-appellant.
Sycip, Salazar, Luna and Associates and Carolina C. Griño-Aquino for defendants-
appellees.

Facts:

Concepcion Felix, widow of Don Felipe Calderon, married Domingo Rodriguez in 1929.
Before this marriage, Concepcion owned two fishponds in Bulacan, Philippines. In 1934, she
purportedly sold these fishponds to her daughter, Concepcion Calderon, for P2,500. Later,
this ownership was transferred back to Concepcion Felix and Domingo Rodriguez.

Domingo Rodriguez passed away intestate in 1953, survived by Concepcion Felix, his
children, and grandchildren. An extrajudicial settlement was made on March 16, 1953,
wherein half of the properties, including the fishponds, were divided among the heirs. TCT
Nos. 13815 and 13816 were cancelled, and new titles were issued to the heirs.

Concepcion Felix was granted lifetime usufruct over one-third of the fishpond. In 1961, she
leased the fishpond from the Rodriguez children and grandchildren for five years. However,
disputes arose when Concepcion Felix failed to deliver earnings from the fishpond to her
stepchildren.

In response, Concepcion Felix filed a lawsuit in 1962 against her stepchildren, seeking to
declare the deeds of transfer of her properties to the conjugal partnership null and void. She
argued lack of consideration and participation in transactions under false assumptions
regarding the nature of the properties. She also sought payment for income she delivered to
the defendants.

The defendants denied the allegations and counterclaimed for the unpaid balance of fishpond
earnings, attorney's fees, and litigation expenses.

The court ruled in favor of the defendants in October 1963. It found the contracts valid, stating
that Concepcion Felix voluntarily consented to them and participated in subsequent
transactions, thus ratifying the transfers. The court rejected her alternative claim, citing the
statute of limitations for action on the extrajudicial settlement.

The court concluded that Concepcion Felix could not recover the properties she had
transferred and upheld the validity of the contracts.

ISSUE:

Whether or not the the transfer of fishponds to the cojugal property where valid?

HELD Yes. The court held that charge of simulation is untenable, for the characteristic of
simulation is the fact that the apparent contract is not really desired or intended to produce
legal effects or in way alter the juridical situation of the parties. Thus, where a person, in order
to place his property beyond the reach of his creditors, simulates a transfer of it to another, he
does not really intend to divest himself of his title and control of the property; hence, the deed
of transfer is but a sham. But appellant contends that the sale by her to her daughter, and the
subsequent sale by the latter to appellant and her husband, the late Domingo Rodriguez,
were done for the purpose of converting the property from paraphernal to conjugal, thereby
vesting a half interest in Rodriguez, and evading the prohibition against donations from one
spouse to another during coverture. If this is true, then the appellant and her daughter must
have intended the two conveyance to be real and effective; for appellant could not intend to
keep the ownership of the fishponds and at the same time vest half of them in her husband.
The two contracts of sale then could not have been simulated, but were real and intended to
be fully operative, being the means to achieve the result desired.

In view of the foregoing, the decision appealed from is affirmed. Costs against appellant
Concepcion Felix Vda. de Rodriguez.
DOCTRINE/LAW Art. 1345 – Simulation of a contract may 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. Art. 1346 – An absolutely simulated or fictuitous contract is
void. A relative simulation, when it does not prejudice a third person and is not inetended for
any purpose contrary to law, morals, good customs, public order or public policy binds the
parties to their real agreement.