Sps. Bernardo Buenaventora and consolacion Joaquin, et. al vs Court of Appeals, et. al

GR No. 126376 November 20, 2003

Facts:

Joaquin and Landrito are the parents of the plaintiffs and the defendants. They would like to be declared null and void ab initio certain deeds of sale of real property executed by Joaquin and landrito in favor of their co-defendants. Petitioners aver that the deeds are simulated and therefore null and void ab initio because firstly, there was no actual valid consideration for the deeds of sale over the properties, secondly, assuming that there was consideration in the sumsr eflected in the questioned deeds, the properties are more than three-fold times more valuable than the measly sums appearing therein, thirdly, the deeds of sale do not reflect and express the true intent of the parties (vendors and vendees), fourthly, the purported sale of the properties in litis was the result of a deliberate conspiracy designed to unjustly deprive the rest of the compulsory heirsof their legitime.

Issue:

Whether or not the Deeds of sale are void for lack of consideration



Ruling:
No, the deeds of sale are not void for lack of consideration. A contract of sale is not a real contract, but a consensual contract. As a consensual contract, a contract of sale becomes a binding and valid contract upon the meeting of the minds as to price. If there is a meeting of the minds of the parties as to the price, the contract of sale is valid, despite the manner of payment, or even the breach of that manner of payment. If the real price is not stated in the contract, then the contract of sale is valid but subject to reformation. If there is no meeting of the minds of the parties as to the price, because the price stipulated in the contract is simulated, then the contract is void. Article 1471 of the Civil Code states that if the price in a contract of sale is simulated, the sale is void. 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.