Short answer. No. Article 1345 distinguishes absolute simulation, where the parties do not intend to be bound at all, from relative simulation, where they conceal their true agreement. An absolutely simulated sale is void — it transfers nothing, and no lapse of time cures it. The property never left the seller's patrimony.

What the law says

Simulation 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.

Civil Code, Article 1345 — Simulation of Contracts. Read the full provision →

Two kinds of pretence

Article 1345 provides that Simulation 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. The difference is what lies behind the paper. In absolute simulation there is nothing behind it: no price was meant to be paid, no possession was meant to change, and both sides understood the deed was for show. In relative simulation something real is there but disguised — a donation dressed as a sale, a loan dressed as a lease-back, a lower price written down to save on taxes.

The consequences differ sharply

Article 1346 supplies the effects. An absolutely simulated or fictitious contract is void; a relative simulation, where it does not prejudice a third person and is not for a purpose contrary to law, morals, good customs, public order or public policy, binds the parties to their real agreement. So the disguised donation may still work as a donation between the parties, while the entirely fake sale works as nothing at all. Article 1409 lists absolutely simulated contracts among those inexistent and void from the beginning, and such contracts cannot be ratified. Article 1410 adds that the action or defence for the declaration of inexistence does not prescribe.

Why this is a poor way to hide property

A transfer made to put assets beyond a creditor's reach usually fails twice over. If it was truly simulated, it never moved the property, so the asset remains the debtor's and remains reachable — and because the defence of inexistence does not prescribe, waiting does not help. If it was real but made in fraud of creditors, it is attackable on that footing instead: Article 1177 lets creditors, after pursuing the property in the debtor's possession, impugn the acts the debtor may have done to defraud them, and Article 1381 makes contracts undertaken in fraud of creditors rescissible where the claims cannot be collected in any other way.

What proves a sale was a pretence

Simulation is proved by conduct, not by confession. The recurring indicators are documentary or physical: no proof the price was ever paid, the seller staying in possession and continuing to pay the taxes and utilities, a deed executed just as a creditor closed in, a buyer with no means to pay the stated price, and years of silence with no attempt to take the property. Gather bank records, receipts, tax declarations and the dates of the creditor's demands, and place the deed on that timeline. The gap between what the document says happened and what actually happened is the case.

Cases citing this provision

These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.

Related provisions

Note. Statute text quoted on this page is reproduced from the official enactment and is linked to the full provision. The explanation around it is general legal information from Vivas & Nobles Law Office, not legal advice. Whether it applies to your situation depends on facts only a lawyer reviewing them can assess.