Facts:

Spouses Campos were owners of different parcels of land. Now, a case was filed against them by the
Respondents where the latter won. The respondents wanted to levy some properties of the Spouses
Campos but found out that these have already been sold to the children of the Spouses, the petitioners
of this case.

Consequently, the Respondents filed to nullify the Deed of Sale for being fictitious. According to the
Respondents, the sale was done by the Spouses Campos to avoid the properties being levied and
attached by the Respondents as creditors.

The petitioners answered that they had purchased the properties in question in good faith and for value
in 1985 because these were sold to them before they had any notice of the claims or interests of other
persons. The petitioners also argued that since the Court of Appeals decided that the sale were done in
fraud of creditors, the applicable provision for them will be Article 1381 (3) on rescissible contracts.

Issues:

Whether or not the sale made by the Spouses Campos to their children was fictitious?

Whether or not Article 1381 (3) on rescissible contracts is applicable to their case?

Ruling:

The Supreme Court ruled that the sale of the Spouses Campos of their different lands to their children
were really fictitious and absolutely simulated because of the following reasons:

1) The petitioners could not give any sufficient reasons why the sale, although dated in 1985 and
1988, were only registered in the 1990s (during the pendency of the case filed by the
Respondents against the Spouses Campos). It can be assumed that the sales were antedated;
2) There are great disparities between the consideration as written in the Deed of Sale versus the
actual zonal valuation;
3) The Spouses Campos continue to possess the property without giving rent or any consideration
to the new owners (the petitioners).

Given the said reasons, the sales made by the Spouses Campos of their different lands to their children
were simulated and thus are void from the beginning.

The Supreme Court also decided that since the sale was void from the beginning, there was no sale to
reckon with. Article 1381 (3) is not applicable as the action to rescind is founded upon and presupposes
the existence of a contract.
However, the Supreme Court affirmed the decision of the Court of Appeals that indeed the Deed of Sale
executed by the Spouses Campos to their children were fictitious, thus are void from the beginning.
Thus, the applicable provision is