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Gardner v.

CA Digest
G.R. No. L-59952 ; 131 SCRA 585 ; August 31, 1984
Facts:
The case involve several transfers of the subject real property. It appears that petitioners
the Gardner spouse enter into an agreement with Respondent spouses, the Santoses to subdivide
2 parcels of land and executed an absolute deed of sale in favor of the latter. The real truth is that
what occurred was a sale in trust since the petitioner obtained an amount of money from the
respondents, who in turn promised to improve the land.
Apparently, the Santoses transferred the properties to the Cuencas who in turn transferred
it to the Verroyas who executive a mortgage over the lot. Then Verroya executed a deed of
transfers to the Natividads. Note that from the titles of the Cuencas (the Second Transferees) to
the titles of the Natividads (the Fourth Transferee), the Adverse Claim of the Gardners continued
to be carried, and that throughout the successive transfers, the petitioners continued to remain in
possession, cultivation and occupation of the disputed properties.
In their Answer, the Santoses claimed that the sale to them was conditional in the sense
that the properties were to be considered as the investment of the petitioners in the subdivision
venture and that in the event that this did not materialize they were to reconvey the lots to
petitioners upon reimbursement by the latter of all sums advanced to them; and that the deed of
sale was to be registered for the protection of the Santoses considering the moneys that the latter
would be advancing.
Hence, the Gardners filed an action for declaration of Nullity, Rescission and damages
against the 5 transferres and mortgagees. The RTC ruled in favor of petitioners declaring the
transfers null and void. The CA affirmed in toto the RTC but reconsidered it decision and ruled
that the sale of land to Natividads are valid.
Issue: Whether or not the admissions made by Santos in the pleadings are admissible
Held: NO. The testimony of Ariosto Santos is at variance with the allegations in his Answer. As a
general rule, facts alleged in a party's pleading are deemed admissions of that party and binding
upon it, but this is not an absolute and inflexible rule. An Answer is a mere statement of fact
which the party filing it expects to prove, but it is not evidence.

Santos himself, in open Court, had repudiated the defenses raised in his answer and
against his own interest, his testimony is deserving of weight and credence. Both the Trial Court
and the Appellate Court believed in his credibility and we find no reason to overturn their
findings thereon. Santos likewise admitted against his own interest that the petitioners did not
receive from him any consideration, which corroborated the declarations of the petitioners. The
Subdivision Joint Venture Agreement and the Supplemental Agreement express that the true and
real nature of the agreement between the parties, which was for a subdivision and not a sale
transaction.
All Five Transfers were absolutely simulated and fictitious and were, therefore, void ab
initio and inexistent. Contracts of sale are void and produce no effect whatsoever where the
price, which appears therein as paid, has, in fact, never been paid by the purchaser to the vendor.