G.R. No. 259051 (Formerly UDK No. 17094) EDWARD C. CIACHO, PETITIONER, VS. SPOUSES ADOLFO T. DE GUIA* AND FE ALMA V. DE GUIA [DECEASED]; AND BAYANI S. CERILLA [DECEASED], SUBSTITUTED BY HIS HEIRS, MARY BERNADETTE G. CERILLA AND BYATRES MARI CERILLA-BOHOL, RESPONDENTS. February 26, 2025

This resolves the Petition for Review onCertiorarifiled by petitioner Edward C. Ciacho (Ciacho) to assail the Court of Appeals (CA) Decision,^[1]dated December 19, 2019, and the Resolution,^[2]dated May 27, 2021. The CA denied the appeal filed by Ciacho and affirmed the Decision,^[3]dated November 27, 2014, of the Branch 34, Regional Trial Court, Tacloban City (RTC), in the case entitledSpouses Adolfo T. De Guia and Fe Alma V. De Guia v. Bayani S. Cerilla and Edward Ciacho, for Annulment of Deed of Sale of Real Property with Damages, docketed as Civil Case No. 99-07-105. The RTC ruled in favor of respondents Spouses Adolfo T. De Guia (Adolfo) and Fe Alma V. De Guia (Alma) (collectively,the Spouses De Guia), and declared invalid the subject Deed of Absolute Sale entered into by respondent Bayani S. Cerilla (Cerilla) and petitioner Ciacho.

The Facts

The properties subject of this case are: (1) a parcel of land consisting of 2,549 square meters previously covered by Transfer Certificate of Title (TCT) No. T-68 in the name of Andrea de Guia; and (2) a parcel of land consisting of 174 square meters previously covered by TCT No. T-1815 under the name of Rustico de Guia, both of which are located in Tacloban City. Adolfo inherited the subject properties from Spouses Enrique and Andrea de Guia.^[4]

In 1994, Adolfo convinced Cerilla to invest in the two subject properties as it was facing foreclosure on the mortgages thereon.^[5]Cerilla agreed to redeem the subject properties from its existing encumbrances; thus, Deeds of Absolute Sale were executed by Adolfo in favor of Cerilla.^[6]TCT No. T-68 and TCT No. T-1815 were cancelled, and TCT No. T-40257 and TCT No. T-39792 were issued therefor, respectively, both in Cerilla's name.^[7]

Thereafter, Cerilla executed another Deed of Absolute Sale selling the subject properties back to Adolfo.^[8]This subsequent Deed of Absolute Sale was not notarized.^[9]Consequently, Adolfo made an Adverse Claim on TCT Nos. T-39792 and T-40257 on the basis of the said Deed of Absolute Sale.^[10]Adolfo and Cerilla came to an agreement, through a Memorandum of Agreement (MOA), that the subject properties would be sold to Cerilla for the amount of PHP 15 million, on the condition that Adolfo will bear the costs for the sale, including the ejectment of the illegal settlers residing thereon.^[11]

As partial payment for the sale of the subject properties, Adolfo acknowledged the receipt of PHP 1,675,660.07 from Cerilla.^[12]It was agreed that Cerilla will pay the remaining balance of PHP 13,324,340.00 in two years beginning after the ejectment of the illegal settlers on the subject properties.^[13]In the MOA, Adolfo and Cerilla also agreed that, in case the subject properties are sold to other buyers, Cerilla will first inform Adolfo regarding the settlement of such sale.^[14]

Adolfo failed to eject the illegal settlers on the properties, as originally agreed upon.^[15]Thus, Cerilla brought it upon himself to cause the ejectment of the illegal settlers.^[16]However, Cerilla did not succeed in ejecting the illegal settlers. As a result, Cerilla incurred significant costs for the supposed ejectment and this caused him to obtain a PHP 700,000.00 loan from Far East Bank and Trust Company (FEBTC). The property covered by TCT No. T- 39792 was used to secure the loan with FEBTC.^[17]

Cerilla also sought financial assistance from Ciacho. Thus, Ciacho agreed to extend a loan to Cerilla, which was secured by the two subject properties. Hence, a Deed of Real Estate Mortgage was issued in favor of Ciacho.^[18]Considering that the property covered by TCT No. T-39792 was encumbered with FEBTC, and there were Adverse Claims on both titles by Adolfo, Ciacho conditioned the grant of the loan to Cerilla on the removal of the encumbrances on the properties covered by TCT Nos. T-39792 and T-40257.^[19]

Ciacho sought the assurance of Adolfo that the two titles were clean. Thus, Adolfo appeared before Ciacho to assure him that the adverse claims on the titles have been settled through an Affidavit, dated December 4, 1995.^[20]Cerilla's loan with FEBTC was also settled and the encumbrance on TCT No. T-39792 was cancelled.^[21]Thus, Ciacho extended a loan in the amount of PHP 500,000.00 in favor of Cerilla, which was secured by TCT No. T-40257, and the amount of PHP 800,000.00, which was secured by TCT No. T-39792.^[22]The Deed of Real Estate Mortgage, which was signed by Adolfo, stated that the loan was subject to 6% interest per month.^[23]

Despite repeated demands, Cerilla failed to pay Ciacho the loaned amount. Thus, Ciacho prepared a Deed of Absolute Sale in his favor for the two mortgaged properties.^[24]To placate Ciacho, Cerilla signed the Deed of Absolute Sale in favor of Ciacho but requested that the same be not registered.^[25]Adolfo learned that the subject properties were already registered in the name of Ciacho.^[26]

Thus, Adolfo instituted the case entitledSpouses Adolfo T. De Guia and Fe Alma V. De Guia v. Bayani S. Cerilla and Edward Ciacho, for Annulment of Deed of Sale of Real Property with Damages, docketed as Civil Case No. 99-07-105 with the RTC.

In his Complaint, Adolfo claimed that, after a series of transactions, the subject properties were owned by Cerilla but was later sold back to him. Allegedly, Cerilla tricked him into entering into the aforementioned transactions and, ultimately, sold the two subject properties without Adolfo's knowledge and consent, leading to the transfer of the properties to Ciacho.^[27]

In his defense, Ciacho argued that he was given repeated assurances by Adolfo that his adverse claim was already cancelled and that the TCTs of the subject properties were clean and free from encumbrances.^[28]Ciacho also argued that, contrary to Adolfo's claims, it was Adolfo who transacted with them in bad faith.^[29]

On the other hand, in his Answer, Cerilla averred that there was no actual transfer of ownership over the subject properties in his favor as he was merely an accommodation party who willingly helped Adolfo to avoid the foreclosure of the two subject properties. Cerilla maintained that there was supposedly a document for a conditional sale prepared by Adolfo which was intended to assure Adolfo that he had real ownership over the properties.^[30]Cerilla also averred that Adolfo had full knowledge of the sale to Ciacho to cover the unpaid accumulated debt and interest.^[31]

The Ruling of the RTC

In its Decision, dated November 27, 2014, the RTC ruled in favor of Spouses De Guia, as follows:

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1. Declaring invalid and annulling the assailed Deed of Absolute Sale entered into by defendants, Bayani S. Cerilla and Edward C. Ciacho over the subject parcels of land;

2. Ordering the Registry of Deeds for the City of Tacloban to cancel Transfer Certificates of Title No. T-52312 and No. T-52311 in the name of Edward C. Ciacho; and

3. Ordering the Registry of Deeds for the City of Tacloban to revive and to re-issue Transfer Certificates of Title No. T-39792 and No. T-40257 in the name of defendant Bayani S. Cerilla, but carrying thereon the encumbrances relative to the encumbrance of mortgage in favor of Edward C. Ciacho.

No claim for damages and for attorney's fees is awarded because there is no basis or factual evidence to sustain the award.

No pronouncement as to COSTS.

SO ORDERED.^[32](Emphasis in the original)

The RTC held that Cerilla was a mere accommodation party as there was no real agreement for the sale of the subject properties in favor of Cerilla;^[33]that Cerilla had no authority to sell the subject properties;^[34]and that the totality of the evidence shows that Ciacho was not a buyer in good faith as he knew of the existing claims of Adolfo over the subject properties.^[35]

The RTC did not award damages and attorney's fees as prayed for by Adolfo, interposed as counterclaim by Ciacho, as there was no evidence and legal basis therefor.^[36]

The Ruling of the CA

In the assailed Decision, the CA denied the appeal of Ciacho and affirmed the RTC ruling:

WHEREFORE, the appeal isDENIED. The Decision dated November 27, 2014, of the Regional Trial Court, Eighth Judicial Region, Branch 34, Tacloban City, in Civil Case No. 99-07-105, isAFFIRMED.^[37](Emphasis in the original)

The CA gave probative weight to Cerilla's testimony during trial and affirmed that Cerilla was a mere accommodation party when Adolfo asked the former to redeem the subject properties to avoid its foreclosure.^[38]That being the case, the CA ruled that the subsequent sale of Cerilla to Ciacho was not valid considering that Cerilla was not the lawful owner of the subject properties.^[39]Further, as to the title issued in favor of Ciacho, the CA held that the issuance thereof does not cure Cerilla's lack of title or authority to transfer the ownership of the subject properties as the title is merely an evidence of ownership.^[40]As to Ciacho's claims that he was a buyer in good faith, the CA held that he cannot be considered a buyer in good faith since Ciacho was well aware that there existed two inscriptions of adverse claim by Adolfo on the TCTs of the subject properties.^[41]

In the Resolution,^[42]dated May 27, 2021, the CA denied the Motion for Reconsideration,^[43]dated February 7, 2020, filed by Ciacho. Hence, the present Petition.

In his Petition, Ciacho raises the sole issue of whether the CA erred in ruling that there was no valid contract between him and Cerilla.^[44]Ciacho maintains that Cerilla is the owner of the subject properties covered by TCT Nos. T-40257 and T-39792.^[45]As such, Ciacho insists that there was a valid sale of the subject properties between him and Cerilla.^[46]

In his Comment,^[47]dated December 27, 2022, Cerilla agreed with the findings of the RTC and CA, maintaining that he was only an accommodation party when the subject properties were supposedly sold to him by Adolfo, in order to save the subject properties from foreclosure.^[48]Further, Cerilla prays that moral and exemplary damages be awarded in his favor.^[49]

In a Manifestation with Motion for Substitution, dated August 5, 2023, the counsel of Cerilla informed the Court of Cerilla's demise and prayed that Cerilla be substituted by his heirs: his wife Mary Bernadette G. Cerilla and their daughter Byatres Mari Cerilla-Bohol.

The Issue

Did the CA err in ruling that there was no valid contract of sale between Ciacho and Cerilla?

The Ruling of the Court

The core issue in this case is anchored on the validity of the sale between Ciacho and Cerilla, which are mainly questions of fact as it will entail an examination of the evidence, as well as a determination of the history of the ownership of the subject properties.^[50]Elementary is the rule that questions of fact are not reviewable in petitions for review oncertiorariunder Rule 45 of the Rules of Court.^[51]Thus, generally, the Court is not bound to weigh the evidence presented before the lower courts and the factual findings of such lower courts, if supported by substantial evidence, are given great respect and finality by the Court, absent any of the exceptions where the Court may entertain questions of fact.^[52]

More so, given the congruent Decisions of the RTC and CA in this case, the Court accords great weight to the lower courts' factual findings. Ciacho also failed to show how this case falls under any of the exceptions allowing the review of questions of fact in a Rule 45 Petition. On this score alone, the present Petition should be denied outright.

In any case, even ruling on the merits, the Court finds that the CA did not err in affirming the RTC Decision.

To be a valid contract, three essential elements must be present: (1) consent of the contracting parties; (2) object certain which is the subject matter of the contract; and (3) cause of the obligation which is established.^[53]The absence of any of the foregoing elements renders the contract void.^[54]

Article 1345 of the Civil Code provides that a "[s]imulation 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." Thus, in an absolute simulation, the contract is void and the parties may recover from each other what they may have given under the contract.^[55]

In this case, the core issue is rooted in the validity of Cerilla's sale to Ciacho of the two subject properties covered by TCT Nos. T-40257 and T-39792.

The Court gives credence to the RTC and CA rulings finding that Cerilla was an "accommodation party" for Adolfo in order to avoid the foreclosure of the subject properties, as supported by Cerilla's own testimony:

[Cerilla on Cross-Examination by Atty. Abarquez]

Q: On question No. 15 of your Judicial Affidavit, can you recall if this question was asked of you, and I read:

"Q.What if any were your dealings with Mr. Pido?"

And your answer was:

"A:Before the execution of the second Memorandum of Agreement, Mr. Pido helped Mr. De Guia[Adolfo]in facilitating and causing the transfer of ownership of the parcels of land to me on paper."

Q:	That is your answer. What do you mean when you say "on paper"? Tell the Court.
A:	These two parcels of land has (sic) ben mortgaged to somebody, and then I have to pay the redemption of these properties, so that we can make a possible sale. Otherwise, how can we sale the property that we do not own.
	. . . .
Q:	The ownership of the property will be transferred to you on paper. What does it mean?
A:	Yes sir. Because we have a [Memorandum] of Agreement which I am going to show, this is the original copy marked as Exhibit "8". But I do not really own the property.
Q:	In other words, Mr. Witness, there is no actual transfer of ownership of the land to you, but only on paper. Meaning, there was an agreement that it will not actually be in your name?
A:	Well, it seems to be the case. Because when [he] run out of money, De Guia [Adolfo] came to me again and requested if they can get some more. In fact, I have already released one million six hundred something. And so that, I have to find some ways to give more money to them.
Q:	Yes, but there is a simple transaction that it must (not) be transferred to your name absolutely, but it is only "on paper". What do you mean by that?
A:	By that time, I considered myself as some sort of a tool they can use. In other words, an accommodation party.[56]

Thus, as correctly found by the RTC and CA, there was no intention between Cerilla and Adolfo to enter into a contract of sale and transfer the ownership of the subject properties to Cerilla.^[57]Most telling is the fact that Cerilla re-sold to Adolfo the subject properties only seven months after TCT Nos. T-39792 and T-40257 were issued on July 24, 1994 and August 26, 1994, respectively. As aptly found by the RTC, this re-sale by Cerilla to Adolfo within a short period of time, coupled with the fact that Cerilla asked Ciacho to not register their sale of the subject properties, indicate that there was indeed no intention on the part of Adolfo to transfer the ownership of the subject properties to Cerilla.^[58]

The Court finds no reversible error in the finding of the CA ruling that Cerilla was an accommodation party for the redemption of the subject properties to avoid its foreclosure:

To determine the parties' real intention, the contemporaneous and subsequent acts of the parties should be considered. The records reveal that right from the start of their dealings with each other, there was no agreement between de Guia [Adolfo] and Cerilla to transfer ownership over the subject properties to the latter. Tellingly, Cerilla did not consider himself at any time owner of the subject properties despite the fact that the titles were transferred in his name. It appears that de Guia [Adolfo] intended the easy facilitation of the sale of the lots to prospective buyers by cancelling his title and issuing new ones in favor of the accommodation party. In this way, Cerilla could easily mortgage the subject properties and obtain money from the prospective buyers. In fact, Cerilla was unaware that de Guia [Adolfo] had executed the Deeds of Sale in his favor which resulted to the issuance of new titles in the former's name. The titles were issued on July 24, 1994 (for TCT [N]o. T-39792) and August 26, 1994 (for TCT No. T-40257). In fact, in the Memorandum of Agreement which they executed, it was stated therein that there will be no real transfer of ownership of the subject properties in Cerilla's favor. And, it would be contrary to ordinary human behavior that the new owner would immediately resell to the previous owner the subject lots. In a Deed of Absolute Sale dated February 3, 1995, the subject properties were sold back to de Guia [Adolfo]. This re-sale just shows the real intention of the parties for de Guia [Adolfo] to retain lawful ownership over the subject properties. Even at the time of the supposed sale of these subject lots to Ciacho, Cerilla was mindful that he was not the real owner thereof. Cerilla asked Ciacho not to register the subject properties in his name. Notably, we take into consideration the fact that de Guia [Adolfo] gave his conformity to the Real Estate Mortage executed between Cerilla as mortgagor and Ciacho as mortgagee. Although he did not signify in what capacity he participated in the said contract was, it shows that Ciacho, himself, believed that de Guia [Adolfo] was still the lawful owner of the subject properties.^[59](Citation omitted)

Thus, there was no valid sale between Cerilla and Adolfo. Therefore, the ownership over the subject properties remained with Adolfo. Consequently, there was no valid transfer of ownership by Cerilla in favor of Ciacho. Article 1458 of the Civil Code provides that "[b]y the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other party to pay therefor a price certain in money or its equivalent." Corollarily, Article 1459 provides that "[t]he thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered." Thus, a contract for the sale of property by a person who was not the owner thereof, or by an unauthorized person, is void.^[60]

In this case, as discussed, Cerilla had no authority to sell the subject properties precisely because Adolfo remained the owner thereof. It is also undeniable that Adolfo cannot be deemed to have ratified the sale by Cerilla to Ciacho as Adolfo instituted a case for the Annulment of the Deed of Absolute Sale between Cerilla and Ciacho, docketed as Civil Case No. 99-07-105. Hence, as correctly ruled by the RTC and the CA, there was no valid transfer of ownership of the subject properties to Ciacho.^[61]

Neither did the issuance of titles for the subject properties registered under the name of Ciacho cure the lack of title or authority of Cerilla to transfer the ownership of the subject properties. As correctly found by the CA, settled is the rule that the issuance of a certificate of title is not a grant of ownership over the property, but merely an evidence of such ownership or right thereon.^[62]

Further, Ciacho cannot be considered as an innocent purchaser for value. Generally, to be considered an innocent purchaser for value, the buyer does not have any notice of defect or irregularity as to the right or interest of the seller, and the buyer is without notice that a third party has a claim to the subject property.^[63]Thus, if there is anything on the certificate of title that leads to suspicion or raises any cloud on the title, right or ownership of the subject property, the buyer cannot be deemed as an innocent purchaser for value.^[64]

Here, the Court gives credence to the factual findings of the RTC and CA:

True, de Guia [Adolfo] was called to shed light on the existence of his Adverse Claim. De Guia [Adolfo] and Cerilla assured Ciacho that their problem was already settled. In fact, the adverse claim was cancelled and de Guia [Adolfo] was made to sign the Deed of Mortgage to show his conformity thereto. While it may be correct to say, that with the cancellation of the Adverse Claim and the conformity of Adolfo T. De Guia to the Deed of Real Estate Mortgage might have assured Ciacho to proceed with the grant of the loan without any further fear of impediment of title, yet the fact remains that Ciacho cannot feign ignorance of the nature of the adverse claim which is indeed anchored on a Deed of Absolute Sale expected by Cerilla in favor of De Guia [Adolfo]. Equally, Ciacho must have known that Cerilla's title came from the De Guias and should have been extra­ inquisitive why the re-sale. If these were not known to Ciacho, or that he failed to know or did not bother to know these glaring facts despite the appearance of De Guia [Adolfo] before him, this Court believes that Ciacho had not exercised the due diligence required to qualify him as a mortgagee in good faith. Having known the sale and re-sale between De Guia [Adolfo] and Cerilla, Ciacho should have exercised extra prudence in extending the loan with mortgage. The matter of sale and re-sale is a clear indicator of an apparent flaw of Cerilla's titles which should have buoyed up more of Ciacho's caution in dealing with the said certificates of title. Yet, Ciacho turned his back away from his evident fact of sale and re-sale, and instead proceeded with the loan. In fact, he admitted from his own testimony that his concern was not so much on the mortgaged properties but more with the loan and the agreed interest.^[65]

As for the damages prayed for by Cerilla, which the RTC and CA did not award in his favor, the Court can no longer pass upon the same as issues on the amount of damages are factual questions that the Court may not resolve in a Rule 45 Petition. Thus, absent any clear showing that the trial court overlooked the facts and circumstances of this case, the Court will not disturb or overturn its findings.^[66]

Considering the foregoing, the Court finds no reason to disturb the factual findings and rulings of the RTC and the CA. Undoubtedly, the sale of the subject properties to Ciacho is void as Adolfo remained the true owner thereof.

FOR THESE REASONS,the Petition for Review onCertiorarifiled by Edward C. Ciacho isDENIEDfor lack of merit. The Court of Appeals Decision, dated December 19, 2019, and the Resolution, dated May 27, 2021, in CA-G.R. CEB CV. No. 05536, areAFFIRMED.

SO ORDERED.

Inting, Gaerlan, andDimaampao, JJ., concur.
Caguioa (Chairperson), J., see separate concurring opinion.

^[1]Rollo, pp. 71-84. The Decision in CA-G.R. CEB CV. No. 05536 was penned by Associate Justice Gabriel T. Ingles and concurred in by Associate Justices Marilyn B. Lagura-Yap and Alfredo D. Ampuan of the Special Eighteenth Division, Court of Appeals, Cebu City.

^[2]Id.at 96-97. The Resolution in CA-G.R. CEB CV. No. 05536 was penned by Associate Justice Gabriel T. Ingles and concurred in by Associate Justices Pamela Ann Abella Maxino and Marilyn B. Lagura-Yap of the Special Former Special Eighteenth Division, Court of Appeals, Cebu City.

^[3]Id.at 32-51. Penned by Presiding Judge Frisco T. Lilagan.

^[4]Id.at 72.

^[5]Id.

^[6]Id.

^[7]Id.

^[8]Id.

^[9]Id.

^[10]Id.

^[11]Id.

^[12]Id.at 72-73.

^[13]Id.at 73.

^[14]Id.

^[15]Id.at 35.

^[16]Id.

^[17]Id.at 37.

^[18]Id.

^[19]Id.at 38.

^[20]Id.

^[21]Id.

^[22]Id.

^[23]Id.

^[24]Id.at 39.

^[25]Id.

^[26]Id.at 74.

^[27]Id.

^[28]Id.at 74-75.

^[29]Id.at 75.

^[30]Id.

^[31]Id.

^[32]Id.at 51.

^[33]Id.at 43.

^[34]Id.at 44.

^[35]Id.at 47.

^[36]Id.at 51.

^[37]Id.at 84.

^[38]Id.at 78.

^[39]Id.at 79.

^[40]Id.at 80.

^[41]Id.at 81-83.

^[42]Id.at 96-97.

^[43]Id.at 86-95.

^[44]Id.at 20.

^[45]Id.at 21.

^[46]Id.at 21-22.

^[47]Id.at 138-163.

^[48]Id.at 154-155.

^[49]Id.at 161.

^[50]Cabilao v. Tampan, 921 Phil. 601, 609 (2022) [Per J. Hernando, Second Division].

^[51]Id.at 609.

^[52]Id.

^[53]De Joya v. Madlangbayan, 901 Phil. 153, 167 (2021) [Per J. Gaerlan, First Division].

^[54]Id.

^[55]Pasco v. Cuenca, 889 Phil. 68, 78 (2020) [Per J. Inting, Third Division].

^[56]Id.at 42-43,citingTSN, Bayani S. Cerilla, May 21, 2014, pp. 8-10.

^[57]Id.at 42.

^[58]Id.at 43.

^[59]Id.at 78-79.

^[60]Heirs of Gregorio Lopez v. Development Bank of the Philippines, 747 Phil. 427, 444 (2014) [Per J. Leonen, Second Division].

^[61]Rollo, p. 80.

^[62]Heirs of Gregorio Lopez v. Development Bank of the Philippines, 747 Phil. 427, 439 (2014) [Per J. Leonen, Second Division].

^[63]Id.

^[64]Id.at 440.

^[65]Id.at 81-82.

^[66]Guy v. Tulfo, 851 Phil. 748, 762 (2019) [Per J. Leonen, Third Division].

CAGUIOA,J.:

The ultimate facts, according to theponencia, are as follows:

1.	In 1994, Adolfo T. De Guia (Adolfo) convinced Bayani S. Cerilla (Cerilla) to invest in two parcels of land, 2,549 and 174 square meters in area covered by Transfer Certificate of Title (TCT) Nos. T-68 and T-1815, respectively, both registered under the name of one Rustico de Guia, Adolfo's predecessor-in-interest (the Subject Properties). At the time, the Subject Properties were facing foreclosure on the mortgages thereon.[1]
2.	According to Adolfo's plan, Cerilla agreed to redeem the properties for "more than Php 1.6 million,"[2]and new titles were issued in Cerilla's name. A Deed of Absolute Sale (DOAS) was executed by Adolfo in favor of Cerilla and TCT No. T-68 and TCT No. T-1815 were cancelled. In their places, TCT No. T-40257 and TCT No. T-39792 were issued in Cerilla's name.[3]
	In this connection, Branch 34, Regional Trial Court of Tacloban City (RTC) found that the original plan was for Adolfo to eject the illegal settlers using the proceeds of Cerilla's redemption sum. When Adolfo failed, he executed deeds of sale to transfer title over TCT No. T-68 and TCT No. T-1815 to Cerilla for the latter to eject the illegal settlers himself.[4]
3.	Thereafter, Cerilla executed another DOAS with respect to the Subject Properties in favor of Adolfo. Adolfo then caused the annotation of an Adverse Claim on the titles of the Subject Properties based on the DOAS executed by Cerilla in his favor.[5]
4.	Adolfo and Cerilla then executed a Memorandum of Agreement (MOA) providing that the Subject Properties would be sold anew to Cerilla for the price of PHP 15,000,000.00 conditioned on Adolfo's shouldering of the costs for the sale and the ejectment of the illegal settlers residing thereon.[6]As partial payment for the sale, Adolfo acknowledged receipt of PHP 1,675,660.07 from Cerilla.[7]
	Here, it appears that Adolfo's receipt of PHP 1,675,660.07 from Cerilla based on the MOA coincides with Cerilla's initial redemption sum, which the RTC described as "more than Php 1.6 million."[8]The remainder of PHP 13,324,340.00 therefore, could have been intended as Cerilla's return on investment.
5.	The conditions under the MOA were not fulfilled. Hence, the sale by Adolfo to Cerilla under the MOA was not consummated. In the meantime, however, Cerilla executed a DOAS over the Subject Properties in favor of Edward C. Ciacho (Ciacho), who is now the registered owner over the Subject Properties.[9]The agreed price was PHP 9,000,000.00.[10]

Adolfo thus filed a complaint before the RTC to annul the sale between Cerilla and Ciacho. After trial, the RTC ruled in favor of Adolfo and annulled the sale between Cerilla and Ciacho. The Court of Appeals (CA) affirmed^[11]the RTC. Hence, the instant case.

Based on the foregoing, theponenciamade two critical findings.First, the transactions between Adolfo and Cerilla (i.e., Nos. 1 to 4 above) were absolutely simulated because Cerilla was an "accommodation party" for Adolfo.Second, "there was no valid sale"^[12]between Cerilla and Ciacho because Cerilla had no authority to sell the subject properties. Accordingly, the transactions between Adolfo and Cerilla were void.

It is clear that based on the narration of facts in theponencia, the legal relationship between Adolfo, the owner, and Cerilla, the redemptioner, is more than what they make it to be. The convoluted manner of Adolfo's investment proposition to Cerilla does nothing but add suspicion to their true motives. That said, I concur in the result but for different reasons.

In brief, it is my considered view that an implied trust was created between Cerilla and Adolfo over the Subject Properties with the former as trustee and the two [i.e., Cerilla and Adolfo] as beneficiaries. In other words, the sale between Cerilla (the trustee) to Ciacho is valid albeit for insufficient consideration according to the trust between Cerilla and Adolfo. Hence, Adolfo's cause of action is not for the nullification of the sale between Cerilla and Ciacho, which is valid, but against the former for damages due to the breach of the implied trust.

I.

While the transactions between Cerilla and Adolfo (Nos. 1 to 4 above) are convoluted and circuitous, this does not necessarily suggest that their arrangement was "absolutely" simulated. In this connection, theponenciareads in relevant part:

. . . as correctly found by the RTC and CA, there was no intention between Cerilla and Adolfo to enter into a contract of sale and transfer the ownership of the subject properties to Cerilla. Most telling is the fact that Cerilla re-sold to Adolfo the subject properties only seven months after TCT Nos. T-39792 and T-40257 were issued on July 24, 1994 and August 26, 1994, respectively. As aptly found by the RTC, this re-sale by Cerilla to Adolfo within a short period of time, coupled with the fact that Cerilla asked Ciacho to not register their sale of the subject properties, indicate that there was indeed no intention on the part of Adolfo to transfer the ownership of the subject properties to Cerilla.

The Court finds no reversible error in the finding of the CA ruling that Cerilla was an accommodation party for the redemption of the subject properties to avoid its foreclosure:

To determine the parties' real intention, the contemporaneous and subsequent acts of the parties should be considered. The records reveal that right from the start of their dealings with each other, there was no agreement between [Adolfo] and Cerilla to transfer ownership over the subject properties to the latter. Tellingly, Cerilla did not consider himself at any time owner of the subject properties despite the fact that the titles were transferred in his name.It appears that [Adolfo] intended the easy facilitation of the sale of the lots to prospective buyers by cancelling his title and issuing new ones in favor of the accommodation party. In this way, Cerilla could easily mortgage the subject properties and obtain money from the prospective buyers.In fact, Cerilla was unaware that [Adolfo] had executed the Deeds of Sale in his favor which resulted to the issuance of new titles in the former's name. The titles were issued on July 24, 1994 (for TCT no. T-39792) and August 26, 1994 (for TCT No. T-40257). In fact, in the Memorandum of Agreement which they executed, it was stated therein that there will be no real transfer of ownership of the subject properties in Cerilla's favor. And, it would be contrary to ordinary human behavior that the new owner would immediately resell to the previous owner the subject lots. In a Deed of Absolute Sale dated February 3, 1995, the subject properties were sold back to [Adolfo]. This re-sale just shows the real intention of the parties for [Adolfo] to retain lawful ownership over the subject properties.Even at the time of the supposed sale of these subject lots to Ciacho, Cerilla was mindful that he was not the real owner thereof.Cerilla asked Ciacho not to register the subject properties in his name. Notably, we take into consideration the fact that [Adolfo] gave his conformity to the Real Estate Mortgage executed between Cerilla as mortgagor and Ciacho as mortgagee. Although he did not signify in what capacity he participated in the said contract was, it shows that Ciacho, himself, believed that [Adolfo] was still the lawful owner of the subject properties.^[13](Emphasis supplied)

An absolutely simulated contract is one where "the parties do not intend to be bound at all."^[14]However, despite Adolfo's and Cerilla's opinions about their arrangement in hindsight, there is evidence that they intended to be bound by them:

• Cerilla was Adolfo's angel investor who provided additional capital to "redeem" the Subject Properties.^[15]
  
  
• While not stated in theponencia, the ultimate objectives of the "investment" pitched by Adolfo were the ejectment of illegal settlers and the sale of the Subject Properties to a third person for a profit (in excess of PHP 15,000,000.00), which would constitute Cerilla's return on his investment.^[16]
  
  
• The "partial payment" of PHP 1,675,660.07 by Cerilla to Adolfo under the MOA may have been the redemption price Cerilla paid as part of his initial investment.^[17]
  
  
• The unnotarized DOAS between Cerilla and Adolfo, and the latter's Adverse Claim on the basis thereof, was a security feature to prevent Cerilla from undercutting Adolfo's efforts to sell the Subject Properties.^[18]
  
  
• According to the RTC, title over the Subject Properties was transferred to Cerilla only because Adolfo failed to eject the illegal settlers and to enable Cerilla to eject them himself.^[19]

As the CA noted, Adolfo and Cerilla discerned an advantage in that arrangement, to wit:

It appears that [Adolfo] intended theeasy facilitation of the saleof the lots to prospective buyers by cancelling his title and issuing new ones in favor of the accommodation party. In this way, Cerilla couldeasily mortgage the subject properties and obtain moneyfrom the prospective buyers.^[20](Emphasis supplied)

The issue of absolute simulation simply requires an inquiry into whether the parties intended "to be bound at all" under the contract. As businessmen, Adolfo and Cerilla used their convoluted scheme for "easy facilitation" and to "obtain money" through mortgages. These circumstances at least show that the parties intended to be bound by their actions.

Based on the foregoing facts, there is a divergence between legal and equitable title over the Subject Properties. Here, while Cerilla held legal title over the Subject Properties, the facts suggest that he was holding the same merely for the benefit of his and Adolfo's investment plan. Accordingly, their arrangement may be viewed from the perspective of trusts. Under Article 1440 of the Civil Code:

A person who establishes a trust is called the trustor; one in whom confidence is reposed as regards property for the benefit of another person is known as the trustee; and the person for whose benefit the trust has been created is referred to as the beneficiary.

InRodrigo v. Ancilla,^[21]the Court held that "[a]n implied trust is one that, without being express, is deducible from the nature of the transaction as a matter of intent or which is superinduced on the transaction by operation of law as a matter of equity, independently of the particular intention of the parties."^[22]Article 1452 further provides that, "[i]f two or more persons agree to purchase property and by common consent the legal title is taken in the name of one of them for the benefit of all, a trust is created by force of law in favor of the others in proportion to the interest of each." Notably, this is precisely the "investment" pitched by Adolfo to Cerilla when the Subject Properties were facing foreclosure. The two, therefore, "agree[d] to purchase [the Subject Property]" and "by common consent" new titles were issued in Cerilla's name "for the benefit of all."

Thus, it is my considered view that an implied trust was created with the ultimate objective of selling the Subject Properties to a third person for a profit, which was supposed to inure to the benefit of the beneficiaries, i.e., Adolfo and Cerilla. Under this arrangement, Cerilla stood as trustee who held legal title over the Subject Properties until their sale to a third person whereas Adolfo undertook to remove the illegal settlers on the Subject Properties as a condition precedent to the eventual sale to a third person.

Under this framework; we can better understand the effects of Cerilla's sale to Ciacho despite non-compliance with the condition precedent of the implied trust. This leads me to my next point.

II.

Theponenciaheld that the sale between Cerilla to Ciacho was not valid essentially for lack of authority by Adolfo. Theponenciareads in relevant part:

[T]here was no valid sale between Cerilla and Adolfo. Therefore, the ownership over the subject properties remained with Adolfo. Consequently, there was no valid transfer of ownership by Cerilla in favor of Ciacho. Article 1458 of the Civil Code provides that "[b]y the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other party to pay therefor a price certain in money or its equivalent." Corollarily, Article 1459 provides that "[t]he thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered." Thus, a contract for the sale of property by a person who was not the owner thereof, or by an unauthorized person, is void. [Heirs of Gregorio Lopez v. Development Bank of the Philippines, 747 Phil. 427, 444 (2014)]

In this case, as discussed, Cerilla had no authority to sell the subject properties precisely because Adolfo remained the owner thereof. It is also undeniable that Adolfo cannot be deemed to have ratified the sale by Cerilla to Ciacho as Adolfo instituted a case for the Annulment of the Deed of Absolute Sale between Cerilla and Ciacho, docketed as Civil Case No. 99-07-105. Hence, as correctly ruled by the RTC and the CA, there was no valid transfer of ownership of the subject properties to Ciacho.^[23]

TheponenciacitedHeirs of Gregorio Lopez v. Development Bank of the Philippines^[24](Heirs of Gregorio Lopez) which pertained to a sale by a co-owner of a parcel of land without the consent of his other co-owners. Effectively, the sale therein was limited solely to the seller's undivided interest in the property, which rendered the sale of the whole property void as being contrary to law (i.e., Article 493 expressly limiting the effects of alienation by a co-owner of his or her part of the co-owned property). WhileHeirs of Gregorio Lopezcited Article 1459 providing that "the vendor must have a right to transfer the ownership [of the subject of the sale] at the time it is delivered," the specific provision of law declaring the contract as void was not specified. But this gap can be remedied as follows.

The Court held inHeirs of Gregorio Lopezthat the sale by a co-owner of the co-owned property without the consent of his other co-owners is contrary to Article 493. Accordingly, Article 1409(1), which voids a contract "whose cause, object or purpose iscontrary to law, morals, good customs, public order or public policy"^[25]may be applied to justify the conclusion inHeirs of Gregorio Lopez.

In contrast to the instant case, however, the sale by Cerilla to Ciacho was valid on its face with the former being the registered owner. Indeed, theponenciacorrectly noted that in a contract of sale, the seller "must have arightto transfer the ownership thereof at the time it isdelivered."^[26]One need not be the owner of a thing at the time of the sale to able to perfect the contract.

That said, theponencia's basis for declaring the sale between Cerilla and Ciacho as invalid focused on Cerilla's apparent lack of authority to sell the properties to Ciacho and the absence of Adolfo's ratification to the same. These facts may be immaterial.

Lack of authority or ratification is not a ground to declare a contract void, but rather unenforceable under Article 1317, paragraph 2, in relation to Article 1403(2) of the Civil Code, to quote:

ARTICLE 1317. No one may contract in the name of another without being authorized by the latter, or unless he [or she] has by law a right to represent him [or her].

A contract entered into in the name of another by one who has no authority or legal representation, or who has acted beyond his [or her] powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party.

ARTICLE 1403. The following contracts are unenforceable, unless they are ratified:

(1)	Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his [or her] powers[.](Emphasis supplied)

Thus, framing the sale between Ciacho and Cerilla as an issue of authority or representation may be insufficient to declare a contract invalid, much less void.

Remedies from a breach of an implied trust

Based on the foregoing, it is my considered view that the sale by Cerilla to Ciacho is valid and that Adolfo's only cause of action is against Cerilla for damages based on violating the terms of the implied trust.

Under the concept of an implied trust discussed in Part I, Adolfo's complaint, which was captioned as one for "Annulment of Deed of Sale of Real Property with Damages," is essentially an action for reconveyance, which is a "a legal remedy granted to a rightful owner of land wrongfully or erroneously registered in the name of another to compel the latter to reconvey the land to him [or her]."^[27]InRodrigo v. Ancilla, the Court declared that: "[t]he remedy of a landowner whose property has been wrongfully or erroneously registered in another's name is an action for reconveyance, or an action for damages if the property has passed onto the hands of an innocent purchaser for value."^[28]

The facts, however, do not involve a wrongful or erroneous registration, but simply a sale that violated one of the conditions of the MOA between Cerilla and Adolfo, namely that the illegal settlers should be cleared before the Subject Properties may be sold again. Moreover, the Subject Properties were sold by the registered owner, Cerilla, to Ciacho who may be considered as an innocent purchaser for value given theponencia's narration of how Ciacho went beyond the face of Cerilla's title and inquired with both Adolfo and Far East Bank and Trust Company to ascertain the presence of any defects in Cerilla' s title.

Ultimately, Adolfo's action should be limited to one for damages against Cerilla for the latter's breach of the implied trust. Given that the CA affirmed the RTC's finding that there was no evidence to support an award of damages, Adolfo's complaint should be dismissed.

Based on the foregoing premises, I vote to DENY the Petition and AFFIRM the Decision dated December 19, 2019 and Resolution dated May 27, 2021 of the Court of Appeals.

^[2]Rollo, p. 35, Decision dated November 27, 204 of Branch 34, Regional Trial Court of Tacloban City in Civil Case No. 99-07-105 penned by Presiding Judge Frisco T. Lilagan.

^[3]Id.at 35-36.

^[4]Id.

^[5]Id.at 36-37.

^[6]Id.at 37.

^[7]Id.

^[8]Id.at 35.

^[9]Ponencia, p. 3.

^[10]Rollo, p. 22, Petition for Review onCertiorari.

^[11]Decision dated December 19, 2019, of the Court of Appeals - Cebu City Special Eighteenth Division in CA-G.R. CEB CV No. 05536, penned by Associate Justice Gabriel T. Ingles, with Associate Justices Marilyn B. Lagura-Yap and Alfredo D. Ampuan concurring, and Resolution dated May 27, 2021 of the Court of Appeals – Cebu City Former Special Eighteenth Division penned by Associate Justice Gabriel T. Ingles, with Associate Justices Pamela Ann Abella Maxino and Marilyn B. Lagura-Yap, concurring.

^[12]Ponencia, p. 9.

^[13]Id.at 8-9.

^[14]CIVIL CODE, Art. 1345.

^[15]See ponencia, p. 2.

^[16]Seeid.

^[17]Seerollo, p. 37, RTC Decision.

^[18]See ponencia, p. 2.

^[19]Rollo, pp. 35-36, RTC Decision.

^[20]Ponencia, p. 9, citing CA Decision.

^[21]525 Phil. 590 (2006) [Per J. Corona, Second Division].

^[22]Id.at 598.

^[23]Ponencia, pp. 9-10. Citation added.

^[24]747 Phil. 427, 444 (2014) [Per J. Leonen, Second Division].

^[25]Emphasis supplied.

^[26]Ponencia, p. 9. Emphasis supplied.

^[27]Gatmaytan, et al. v. Misibis Land, Inc., 873 Phil. 791, 804 (2020) [Per J. Caguioa, First Division].

^[28]Rodrigo v. Ancilla,supranote 21, at 596.