Bonifacio Olegario v. The Honorable Court of Appeals

Summary

This case involves a property ownership dispute over a 91-square meter lot in Caloocan City. Childless spouses Marciliano and Aurelia Olegario reared private respondents Manuel Rivera, Paz Olegario, and Socorro Olegario-Teves. After Aurelia's death, Marciliano executed an unregistered deed of sale to private respondents allegedly to avoid estate taxes and prevent petitioners (the lawful heirs) from inheriting. When Marciliano died, petitioners executed an extra-judicial settlement and sold to third parties. Private respondents sued to annul the settlement. The Supreme Court reversed lower courts' decisions, finding the deed of sale null and void due to illegal motive and lack of consideration. The Court emphasized that contracts motivated by tax evasion and defeating inheritance rights are invalid under Civil Code provisions on unlawful cause.