Juanito Cariño, Cirila Vicencio v. CA, Pablo Encabo, Juanita De Los Santos, Land Authority RULING: YES.

G: YES. The characteristic of simulation is the fact that the apparent contract is not
G.R. No. L-47661 | July 31, 1987 really desired or intended to produce legal effects nor in any way alter the judicial situation
of the parties. In this case, under their transaction, the parties knew that the document
Topic: Elements, Simulated Contract Exhibit "D-1" was at once fictitious and simulated where none of the parties intended to be
Petitioner: Juanito Cariño, Cirila Vicencio v. CA bound thereby. The testimony of Cirila Vicencio during her direct examination was grossly
Respondent: Pablo Encabo, Juanita De Los Santos, Land Authority inconsistent with her statements in the LTA administrative case which she previously filed.
Ponente: J. Padilla She testified in the lower court that she paid the Encabos five hundred pesos (P500.00) for
the lot, whereas, in the LTA administrative case she said that it was one thousand pesos
(P1,000.00). Aside from the purported Deed of Sale (Exhibit "D-1"), there is no other
DOCTRINE: The characteristic of simulation is the fact that the apparent contract is not really
document which evidences the payment of a sum of money by Cariño to the Encabos for the
desired or intended to produce legal effects nor in any way alter the judicial situation of the
disputed lot. Cirila Vicencio also testified in the lower court that Exhibit "D-1" was signed by
parties.
Pablo and Juanita Encabo in Cariño's house at 4214 K Int. 8, Sociego, Sta. Mesa, whereas, in
the LTA administrative case, she testified that it was signed in Las Pinas, Rizal, the residence
FACTS: of the Encabos.
 Encabo formally applied with the Bureau of Lands to purchase a parcel of land which was a
part of the Tuason Estate purchased by the government pursuant to the provisions of C.A.
These inconsistencies in the testimony of the Cariños are badges of untruthfulness, showing
No. 539, for resale to qualified-to-own bona fide tenants or occupants. Thereafter, Encabo,
that no actual and real sale of the lot in question took place between the Encabos and the
through Vicencio, supposedly as "agent," came to an agreement with Quesada transferring
Cariños. The testimony of a witness does not merit credibility or inspire confidence where it
rights over the lot to the latter, conditioned on approval by the Land Tenure Administration
is inconsistent and incompatible with his statements on other occasions concerning the same
(LTA). Cariño, husband of Vicencio, is a relative of Quesada, Vicencio is also a "comadre" of
fact.Strongly indicative of the simulated character of Exhibit ,"D-1" is the fact that the Cariños
Quesada's wife. The transfer of rights by Encabo to Quesada was not put in writing but
could not produce the receipts evidencing their alleged payments to the Land Authority for
payment of the price for the rights transferred was evidenced by two receipts on which
the disputed lot, nor were they able to produce the Agreement to Sell (Exhibit "G-1").
Vicencio signed as a witness.
According to Cirila Vicencio, Juana Encabo took from her the Agreement to Sell and the
receipts of payments to the Land Authority in order to mortgage the land. The Cariños, who
The Land Tenure Admin. (LTA), unaware of the transfer of rights by Encabo to Quesada,
are the supposed vendees, did not even remonstrate or offer a word of objection to this act
adjudicated the lot in favor of Encabo, and the LTA and Encabo signed an "Agreement to
of the Encabos.
Sell." LTA later came to know about the "transfer" of rights from Encabo to Quesada. It
disapproved the same on the ground that Quesada was not qualified to acquire the lot
because he is already a lot owner. However, before the LTA's disapproval of the transfer of Court also found as a fact that the names of the Cariños were not mentioned as the proposed
Encabo's rights to Quesada, the latter had entered into possession of the lot in question. transferees in the two applications with the LTA filed by Pablo Encabo for transfer of rights
(at a time when the alleged "Deed of Sale and Transfer of Rights," Exhibit "D-1" was already
Encabo executed a Deed of Sale of House and Transfer of Rights purportedly conveying to executed in favor of the Cariños). These applications with the LTA were mere speculations on
herein petitioners, his rights over the lot, subject to approval of the LTA. Encabo wrote a the part of the Encabos if they should desire to sell the lot later on (these applications were
letter to the LTA requesting permission to transfer his rights. In 1960, however, Encabo and later withdrawn by the Encabos in a letter dated May 9, 1960 [Exhibit 113] and no inference
Quesada executed a document wherein the latter purportedly resold to Encabo the house can be made that they intended to transfer the lot specifically to the Cariños. If there were
and the rights over the lot. The next day, Cariño filed a petition with the LTA seeking approval really an intent, then there was no reason which would stop the Encabos from putting the
of the transfer to petitioners of rights to the lot in question on the basis of the Deed of Sale name of the Cariños as transferees, just like in the application to transfer to Quesada wherein
of House and Transfer of Rights executed by Encabo. LTA rendered a decision holding that the latter's name was specifically mentioned. All these appear to clearly indicate a positive
the status quo should be maintained. It reasoned out that "the authenticity of the alleged lack of intention of the Encabos to transfer any right to the petitioners (Cariños).
deed is not for this office to decide, as only the courts have that prerogative. Upon appeal,
Office of the President affired the decision. Thereafter, Encabos filed an action in CFI to Lastly, the deed was executed in November 1958 while the Cariños petitioned the LTA to
declare them as the owners of the lot and for the Cariño to deliver the possession of the lot approve the transfer in their names of Encabos' rights to the lot on the basis of such deed of
itself, and to pay rentals for their occupancy of the properties. CFI rendered decision in favor sale, only on 19 April 1960. The application was made just a day after 18 April 1960 when
of the Encabos. Petitioners appealed to CA. CA affirmed the decision of CFI. Josue Quesada resold to Encabo, for the same consideration of P1,500.00 the house and
rights to the lot previously conveyed by the latter to the former, pursuant to a previous
agreement between Quesada and the Encabos, providing for such a resale should the
ISSUE: Whether the Deed of Sale of House and Transfer of Rights on which the petitioners transfer to Quesada of the Encabos' rights to the lot be disapproved by the LTA. Why did it
have based their application over the lot is absolutely simulated. take the petitioners that long to wait before they appealed with the LTA if they really
believed that Exhibit "D-1" was valid and effective right from the time it was executed in
November 1958? Such lack of eagerness on the part of the Cariños to apply with the LTA for
the transfer of the lot into their name reveals their own conviction that the Deed of Sale is
not real and effective between them and the Encabos.

WHEREFORE, the petition is hereby DENIED for lack of merit. Costs against the petitioners. SO
ORDERED.

CADSHI