Jesus Campos v. Nenita Buenvenida Pastrana

Summary

The Supreme Court affirmed the Court of Appeals' ruling that deeds of absolute sale executed by spouses Carlito and Margarita Campos transferring residential and agricultural lots to their children were absolutely simulated transactions designed to evade creditor claims from a previous judgment. The Court found multiple badges of fraud including grossly inadequate consideration (P7,000 for property worth P417,900; P5,600 for property worth P39,860), significant delay in registration until 1990 despite earlier deed dates, retention of possession by the vendors, and invalid notarial commission. The transfers were declared null and void under Article 1409 of the Civil Code as absolutely simulated contracts, and the corresponding transfer certificates of title were ordered cancelled. The Court emphasized that actions for declaration of inexistence of contracts are imprescriptible, and that void contracts cannot be subject to rescission as they are inexistent from the beginning.