Presumption of Validity of Sale

THIRD DIVISION
FELIPA DELFIN, GINA G.R. No. 146550

MAALAT, SHIRLEY TAMAYO,
RECIO DAOS, and ROBERTO
DELFIN,
Petitioners, Present:
- versus
QUISUMBING, J.,
PRESENTACION D. BILLONES, Chairman,
ROSARIO D. DEMONARCA CARPIO,
(accompanied by husband Pedro CARPIO MORALES,
and Demonarca), WENEFREDO TINGA, JJ.
DEGALA (representing Pedro Degala),
RAMON DELA CRUZ (representing
his deceased wife Maria Daradar dela Cruz),
TERESITA DALIVA DEVIENTE
(daughter of Esperanza Daradar Daliva),
and JOLLY DATAR (representing his Promulgated:
deceased mother Trinidad D. Datar) and
the COURT OF APPEALS,
Respondents. March 17, 2006
x---------------------------------------------------------------------------------x
DECISION
TINGA, J.:
This treats of the petition for review on certiorari assailing the Decision[1] and
Resolution of the Court of Appeals in CA-G.R. CV No. 54035
entitled Presentacion D. Billones, et al. v. Felipa Delfin, et al., promulgated on 13
October 2000 and 26 December 2000, respectively, which reversed the 27 May
1996 Decision of the Regional Trial Court, Branch 15 of Roxas City.
The antecedents are as follows:
On 29 July 1960, a Deed of Absolute Sale[2] over Lot No. 213, covered by
RO-5563 (14516) of the Cadastral Survey of Panitan, Capiz, was executed by
Teresa Daos, Esperanza Daradar, Estrella Daradar and Maria Daradar, with the
marital consent of Cipriano Degala, husband of Teresa Daos, in favor of the
spouses Rodolfo Delfin and Felipa Belo (spouses Delfin). The document, so it
appears, bore the signatures of Esperanza and Estrella, as well as the thumb marks
of Teresa, Maria, and Cipriano, and was acknowledged before a notary
public. On 18 November 1980, the spouses Delfin registered the Deed of Absolute
Sale with the Register of Deeds of the Province of Capiz. Thereupon, a new title,
Transfer Certificate of Title (TCT) No. T-17071, was issued in the name of the
spouses Delfin.[3]
Meanwhile, on 26 March 1965, an Extra-Judicial Partition and Absolute Deed of

Sale[4] involving Lot No. 3414 then covered by TCT No. T-16804 was made
between Teresa Daos, Trinidad Degala,
Leopoldo Degala, Presentacion Degala, Rosario Degala and Pedro
Degala, on one part, and the spouses Delfin, on the other. The deed, bearing either
the thumb marks or the signatures of the sellers, was likewise notarized. Said
document was registered by the spouses Delfin on 24 June 1980. Thus, TCT No.
T-16804 covering Lot No. 3414 was cancelled and a new one, TCT No. T-16805,
was issued in the names of the spouses Delfin on 24 June 1980.[5]
The spouses Delfin then consolidated Lots No. 213 and No. 3414 and subdivided
the resulting lot into six (6) smaller lots.[6] Lot No. 1, covered by TCT No. T-
19618, was sold to Roberto Delfin on 21 October 1989; Lot No. 2 covered by TCT
No. T-19619 to Recio Daos on 25 April 1985; Lot No. 3 covered by TCT No. T-
19620 to Gina Maalat on 14 June 1989, and; Lot No. 4 covered by TCT No. T-
19621 to Shirley Tamayo on 11 August 1989. Lot No. 5 remained with the spouses
Delfin, while Lot No. 6 was used as an access road.[7]
On 12 April 1994, herein respondents, claiming to be the heirs of the former
owners of Lots No. 213 and No. 3414, filed an action for annulment,
reconveyance, recovery of ownership and possession
[8] [9]
and damages. According to them, it was only in 1989 when they
discovered that Teresa Daos, sick and in dire need of money, was constrained to
mortgage the one-half (1/2) portion of Lot No. 3414 to the spouses Delfin
for P300.00 sometime in 1965.[10] Taking advantage of her condition, the spouses
Delfin made her sign a document purporting to be a mortgage, but which turned
out to be an extrajudicial partition with deed of absolute sale. As to Lot No. 213,
respondents averred that the Deed of Sale covering the property was fictitious and
the signatures and thumb marks contained therein were all forged because three (3)
of the signatories therein died before the alleged sale in 1960, namely: Estrella
Daradar, who died in 1934, and Esperanza Daradar and Cipriano Degala, who both
died in 1946.[11] As proof thereof, respondents presented certifications[12] on the
deaths of Esperanza Daradar and Cipriano Degala by the Local Civil Registrar of
Panitan, Capiz.
To counter respondents arguments, petitioners alleged that respondents action was

already barred by prescription and laches. Further, they argued that the spouses
Delfin, as well as the subsequent owners of the subject properties, are innocent
purchasers for value and in good faith, whose titles to the lots at the time of the
purchase were all clean and free from liens and encumbrances.[13] The documents
evidencing the conveyance of the properties were personally and unilaterally

executed by the vendors-signatories therein without any intervention from the
spouses Delfin, and duly acknowledged before a notary public, petitioners
averred.[14]
Giving credence to the claims of petitioners, the trial court ruled that respondents
claim of ownership over the subject properties was not established by a
preponderance of evidence. Compared to respondents verbal claims of ownership,
the spouses Delfin were able to prove that they bought the properties from the
original owners, the trial court added. The trial court held that the deeds of sale
being duly executed notarial and public documents, they enjoy the presumption of
regularity which can only be contradicted by clear and convincing evidence. In
addition, respondents claims based on fraud were barred by prescription, having
been filed more than four (4) years from the time the instruments were registered
with the Register of Deeds, and they are estopped from annulling the documents by
reason of laches, the action having been filed 15 years after the deeds were
registered. The trial court also denied respondents claims for damages.[15]
Respondents elevated the case to the Court of Appeals, which reversed the ruling
of the trial court. In its Decision,[16] the Court of Appeals ruled that while an action
for reconveyance based on implied or constructive trust prescribes in ten (10) years
from the date of the issuance of the certificate of title over the property, such
prescriptive period does not apply if the person claiming to be the owner of the
property is in possession thereof, such as respondents in this case.[17] Moreover,
considering that a similar action for reconveyance was filed by respondents as
early as 1989 which was eventually dismissed without prejudice, respondents
action to annul the two (2) deeds on the ground of fraud has not yet prescribed,
according to the Court of Appeals.[18]
The appellate court annulled the Extra-Judicial Partition and Deed of Sale covering
Lot No. 3414. The appellate court noted that: (i) Teresa Daos was a very old and
sickly woman; (ii) she and her children lacked formal education to fully
comprehend the document to which they affixed their signatures and/or thumb
marks; (iii) P300.00 was inadequate consideration for a lot consisting of 1,565
square meters even in 1965; (iv) respondents were allowed to remain in the subject
properties; and (v) the questioned document was registered in the name of the
spouses Delfin 15 years after the alleged date of its execution, when most of the
alleged vendors have already died. These circumstances surrounding the execution
of the said document show that the real intention was merely to secure the loan
of P300.00. Thus, what took place was in fact, an equitable mortgage and not a
sale.[19]
As for Lot No. 213, the Court of Appeals held that the Deed of Absolute Sale
could not have been executed on 9 July 1960. Relying on the certifications of death
presented by respondents, the Court of Appeals ruled that the defense of due
execution cannot prevail over the fact that two (2) of the signatories therein have
already died prior to said date.[20] Roberto Delfin, Recio Daos, Gina Maalat,
and Shirley Tamayo, buyers of the subdivided lot, could not be considered as
purchasers in good faith nor entitled to be protected in their rights because they
were informed by respondents prior to the purchase that they, and not the spouses
Delfin, are the real owners of the lots, the appellate court added.[21]
The Court of Appeals thus ruled:
WHEREFORE, premises considered, the present appeal is hereby

GRANTED. The Decision dated May 27, 1996 of
the Regional Trial Court of Roxas City, Capiz, Branch 15 presided over by Judge
Roger B. Patricio is hereby REVERSED and SET SIDE and a new one entered:
(1) Annulling the Extra-Judicial Partition and Deed of Absolute Sale

dated March 26, 1965 and Deed of Absolute Sale dated July 9, 1960;
(2) Reinstating OCT No. RO-5563 (14516) referring to Lot 213
registered in the names of Teresa Daos (1/2 portion), and the children of Lucia
Daos, namely: Esperanza Daradar, Estrella Daradar and Maria Daradar (1/2 pro-
indiviso) and OCT No. (4650) RO-5529 referring to Lot 3414 registered in the
names of the late spouses Cipriano Degala and Teresa Daos, and canceling the
TCTs issued thereafter;
(3) Ordering plaintiffs-appellants, jointly and severally, to pay

defendant Felipa Belo Delfin the amount of P300.00 within thirty (30) days from
the date of finality of this decision;
(4) Ordering defendants-appellees to free Lots 3414 and 213 from
any and all obligations and encumbrances that may have been attached to both
lots and thereafter to deliver possession of the same to plaintiffs-appellants; and
(5) Ordering defendants-appellees, jointly and severally, to pay
plaintiffs-appellants P10,000.00 as exemplary damages, and [sic] for attorneys
fees and P10,000.00 as litigation expenses.
Costs against defendants-appellees.

SO ORDERED.[22]
In the present petition for review under Rule 45, petitioners claim that the Court of
Appeals erred in finding that respondents retained possession of the subject
properties. Moreover, petitioners posit that respondents allegations of fraud and
forgery confine their action to a four (4)-year prescriptive period which has long
expired. Additionally, they argue that respondents failed to: (i) prove the
inadequacy of the selling price of Lot No. 3414; (ii) prove the frail condition of
Teresa Daos; (iii) show that fraud attended the sale of Lot No. 213; (iv) show that
Roberto Delfin, Recio Daos, Gina Maalat and Shirley Tamayo are not purchasers
in good faith; and (v) overcome the presumption of regularity enjoyed by the
notarized deeds of sale. Petitioners also question the award of exemplary damages
and attorneys fees in favor of respondents.[23] On the other hand, respondents for
the most part merely reiterated the ruling of the Court of Appeals.[24]
The complete resolution of the issues presented before the Court requires a
determination of facts, which this Court, not being a trier of facts, does not
normally exercise in an appeal by certiorari.[25] This rule, however, is subject to
exceptions, such as where the factual findings of the Court of Appeals and the trial
court are conflicting or contradictory,[26] as in the instant case.
When ones property is registered in anothers name without the formers

consent, an implied trust is created by law in favor of the true owner.[27] Implied
trusts are those which, without being expressed, are deducible from the nature of
the transaction by operation of law as matters of equity, independently of the
particular intention of the parties. Meanwhile, constructive trusts are created in
order to satisfy the demands of justice and prevent unjust enrichment. They arise
against one who, by fraud, duress or abuse of confidence, obtains or holds the legal
right to property which he ought not, in equity and good conscience, to hold. [28] An
action for reconveyance based upon an implied or constructive trust prescribes in
ten (10) years from the registration of the deed or from the issuance of the title,
registration being constructive notice to all persons.[29] However, an action for
reconveyance based on fraud is imprescriptible where the plaintiff is in possession
of the property subject of the acts.[30]
In essence, petitioners insist that respondents failed to prove that fraud attended the
sale of Lots No. 213 and No. 3414. The Court agrees.
A contract or conduct apparently honest and lawful must be treated as such

until it is shown to be otherwise by either positive or circumstantial evidence. [31] A
duly executed contract carries with it the presumption of validity. The party who
impugns its regularity has the burden of proving its simulation.[32] A notarized
document is executed to lend truth to the statements contained therein and to the
authenticity of the signatures. Notarized documents enjoy the presumption of
regularity which can be overturned only by clear and convincing evidence.[33]
As plaintiffs in the action before the trial court, respondents have the burden
to establish their case by a preponderance of evidence, or evidence which is of
greater weight or more convincing than that which is offered in opposition to
it. Hence, parties who have the burden of proof must produce such quantum of
evidence, with plaintiffs having to rely on the strength of their own evidence, not
on the weakness of the defendants.[34]
As regards Lot No. 3414, respondents specifically alleged that the spouses
Delfin tricked the plaintiffs and their late mother into signing a fictitious and
simulated document, and that TCT No. T-16805 was the product of a fictitious and
simulated transaction [that] was obtained through fraud, the same should be
declared null and void.[35]They claimed that the original owners of Lot No. 3414
did not intend to execute a deed of extra-judicial partition and absolute sale but
only a mortgage instrument. However, all that respondents came out with were
bare allegations that the said owners were either old and sickly or illiterate; that the
purported selling price of P300.00 was unconscionable; and that petitioners failed
to eject respondents from the subject land, as respondents were unable to present
any evidence to substantiate their claims, much less the charge of fraud.
Respondents did not present any witness to testify on the execution of the
deed, nor on the condition of the signatories thereto. At best, their witnesses
merely testified as to the identity of the previous owners of the property. Worse,
petitioners Presentacion Degala Billones and Rosario Degala Demonarca, both
signatories to the subject deed, were not presented to testify on the real
circumstances surrounding the assailed transaction. As for the selling price
of P300.00, suffice it to say that respondents did not even present a witness to
testify as to its alleged unconscionability vis-a-vis the prevailing market value of
the property at the time of the sale. Meanwhile, the belated registration of the
document with the Register of Deeds can be explained by the fact that the original
of OCT No. 4650 covering Lot No. 3414 was either lost or destroyed and was
reconstituted only in 1971, while the original copy of the deed of sale was lost by
Felipa Delfin.[36]
Even respondents claim of possession of the subject properties has not been
sufficiently proved. This Court has uniformly held that the one who is in actual
possession of a piece of land claiming to be the owner thereof may wait until his
possession is disturbed or his title is attacked before taking steps to vindicate his
right. His undisturbed possession gives him a continuing right to seek the aid of a
court of equity to ascertain and determine the nature of the adverse claim of a third
party and its effect on his own title, which right can be claimed only by one who is
in possession.[37] Actual possession of land consists in the manifestation of acts of
dominion over it of such a nature as those a party would naturally exercise over his
own property.[38]
Contrary to the appellate courts illation, respondents have not established

possession of the subject properties. Save for the lone testimony of Orlando Buday,
a neighbor, that Rosario Degala Daradar was the only one still residing in the
properties in dispute, no other evidence was presented to show that respondents are
in actual occupation and possession thereof. Not even Rosario herself
testified. Doubts also arise as to the veracity of respondents claim of possession
since respondents themselves averred in their complaint that the spouses Delfin
had immediately taken possession of the subject properties in the same year that
the sale was made, and appropriated the produce found in the subject lots from
then on.[39] Admissions made in the complaint are judicial admissions which are
binding on the party who made them and cannot be contradicted [40] absent any
showing that it was made through palpable mistake. No amount of rationalization
can offset such admission.[41] By their very own admissions, it can be inferred that
respondents or their predecessors-in-interest did not exercise actual occupancy, as
they had ceased to perform acts of dominion over the property upon the sale
thereof.
Fraud may be, and often is, proved by or inferred from circumstances, and
the circumstances proved may in some cases raise a presumption of its existence.
However, while fraud may be proved by circumstances or presumed from them, it
cannot be demonstrated by mere construction, but must be proven in all
cases.[42] Respondents indeed failed to prove that fraud attended the execution of
the Extra-Judicial Partition and Deed of Absolute Sale. Their bare and unsupported
allegations are not enough to overthrow the presumption of the validity of said
agreement or to raise the presumption of fraud.
Considering that respondents failed to establish the existence of fraud in the

spouses Delfins acquisition of Lot No. 3414, it cannot be said that implied or
constructive trust was created between respondents and the spouses Delfin. The
action for reconveyance of Lot No. 3414 must fail. Further, in view of respondents
failure to show their valid title to Lot No. 3414 or even their occupation thereof,
the case cannot prosper even when it is viewed as one for quieting of title.
On the other hand, the Court of Appeals annulled the Deed of Absolute Sale
dated 9 July 1960 covering Lot No. 213 because one of the vendors therein was
already dead,[43] relying on the certifications issued by the Local Civil Registrar. In
assailing this declaration, petitioners once more point out that the Deed of Sale,
being a duly notarized document, should be given full faith and credit. Also, they
argue that the appellate courts conclusion is based on the disputable presumption
that identity of names means identity of persons.
Documents consisting of entries in public records made in the performance

of a duty by a public officer are prima facie evidence of the facts therein
stated.[44] Public documents are (i) the written official acts, or records of the official
acts of the sovereign authority, official bodies and tribunals, and public officers,
whether of the Philippines, or of a foreign country; (ii) documents acknowledged
before a notary public except last wills and testaments; and (iii) public records,
kept in the Philippines, of private documents required by law to be entered
therein.[45] Public documents may be proved by the original copy, an official
publication thereof, or a certified true copy thereof;[46] and when a copy of a
document or record is attested for the purpose of evidence, the attestation by the
officer having legal custody of the record must state that the copy is a correct copy
of the original, or a specific part thereof, as the case may be.[47] A duly-registered
death certificate is considered a public document and the entries found therein are
presumed correct, unless the party who contests its accuracy can produce positive
evidence establishing otherwise.[48] Nevertheless, this presumption is disputable
and is satisfactory only if uncontradicted, and may be overcome by other evidence
to the contrary.
The documents presented by respondents were mere certifications and not

the certified copies or duly authenticated reproductions of the purported death
certificates of Esperanza Daradar
and Cipriano Degala. They are not the public documents referred to by the Rules of
Court, nor even records of public documents; thus, they do not enjoy the
presumption granted by the Rules. Respondents did not even present the local civil
registrar who supposedly issued the certifications to authenticate and identify the
same. Likewise, respondent Jolly Datar who adverted to the certifications did not
testify on how the certifications were obtained, much less his role therein. [49] As a
consequence, the trial court did not admit the certifications as independent pieces
of evidence but merely as part of the testimony of respondent Jolly Datar. [50] A
document or writing which is admitted not as an independent evidence but merely
as part of the testimony of a witness does not constitute proof of the facts related
therein.[51] Clearly then, the certifications cannot be given probative value, and
their contents cannot be deemed to constitute proof of the facts therein stated.
More importantly, the very exhibits of respondents dispel the presumption of

regularity of the issuance of the certifications of death relied upon by the Court of
Appeals. The certifications state that both Esperanza Daradar and Cipriano Degala
died in 1946 at ages 24 and 63, respectively. However, a careful study of the
records of the case shows that in OCT No. RO 5563 (14516),[52] Esperanza Daradar
was already 20 years old in 1929, making her date of birth to be sometime in
1909. This is totally incongruous with her supposed age of 24 years in 1946, which
places the year of her birth in 1922. Likewise, the Court takes note of the Decision
of the Court of Appeals in CA-G.R. CV No. 31739,[53] wherein the appellate court
in its statement of facts found that Esperanza Daradar died on 10 August 1940,
while Estrella Daradar died on 15 June 1943, contrary to the claim of respondents
in this case.[54] The Esperanza Daradar named in the OCT and the one referred to in
the aforesaid Decision could not have been the same Esperanza Daradar in the
Local Civil Registrars certification.
As for the Ciprianos thumb mark on the deed, suffice it to say that his
consent was not in fact needed to perfect the sale. Teresa Daos Degalas share
in Lot 213 was paraphernal property and, under the provisions of the Civil Code
applicable at the time of the sale, she could alienate or dispose of the said property
without the permission or consent of her husband.[55] Thus, with or without such
thumb mark, whether it was forged or not, the Deed of Absolute Sale remains valid
and effectual.
Under the circumstances, therefore, respondents were unable to overthrow the

presumption of validity of the Deed of Absolute Sale. Said deed, as well as the
titles derived as a result thereof must be accorded respect and must remain
undisturbed.
Anent the charge of bad faith on the part of petitioners, the Court takes note of
respondents statement in their Plaintiff-Appellants Brief,[56] to wit:
From the facts and circumstances of this case, Lot 213 and 3414 both of Panitan
Cadastre which were consolidated, into one single lot, per consolidated plan as
appearing at the back of TCT No. T-17071, and after the two lots were
consolidated, and the same was subdivided, into six smaller lots, Lots 1, 4 and 5
thereof still remained in the names of appellees spouses Rodolfo Delfin and
Felipa Belo, while Lots 2 and 3 thereof were transferred by the said spouses
appellees to Recio Daos and Gina Maalat, respectively. These two transferees are
innocent purchasers for value which appellants admit, and this appeal is only an
appeal by appellants against defendant-appellees spouses Rodolfo Delfin and
Felipa Belo, and not against Recio Daos and Gina Maalat.[57] (Emphasis
supplied.)
In effect, contrary to the testimony of respondents witness Myrna Degala-Distura

that her mother warned petitioners against buying the subject lots,[58] respondents
admitted that the only persons they consider to be not innocent purchasers are the
spouses Delfin. However, in view of respondents failure to prove the fraud
attributed to the spouses Delfin, the Court has no choice but to declare all
petitioners to be purchasers for value and in good faith.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals

dated 13 October 2000 is REVERSED and SET ASIDE. The Decision of the
Regional Trial Court dated 27 May 1996 is REINSTATED.
No pronouncement as to costs.
SO ORDERED.
DANTE O. TINGA
Associate Justice
WE CONCUR:
(On Official Leave)

LEONARDO A. QUISUMBING
Associate Justice
Chairman
ANTONIO T. CARPIO CONCHITA CARPIO MORALES
Associate Justice Associate Justice
Acting Chairman
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.
ANTONIO T. CARPIO
Associate Justice
Acting Chairman, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairmans Attestation, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.
ARTEMIO V. PANGANIBAN
Chief Justice
[1]
Penned by Associate Justice Martin S. Villarama, Jr., concurred in by Associate Justices Romeo J.
Callejo, Sr. and Juan Q. Enriquez, Jr.
[2]
Exhibit G, List of Exhibits for the Plaintiffs-Appellants, p.8.
[3]
Exhibit 1, List of Exhibits for the Defendants-Appellees, p. 1.
[4]
Exhibit B, List of Exhibits for the Plaintiffs-Appellants, pp. 2-3.
[5]
Exhibit 2, List of Exhibits for the Defendants-Appellees, p. 2.
[6]
Rollo, p. 34.
[7]
Id. at 35.
[8]
Id. at 322-331.
[9]
Earlier, or on 14 December 1989, Jolly Datar, one of the respondents, filed a case involving the same
action against the spouses Delfin but this case was dismissed without prejudice because the spouses were no longer
the owners of the properties in question; Complaint dated 11 April 1994, id. at 322-331.
[10]
Cipriano Degala and Teresa Daos co-owned Lot No. 3414.
[11]
Rollo, p. 328.
[12]
Exhibits F and J, List of Exhibit for the Plaintiffs-Appellants, pp. 7 and 11.
[13]
Answer with Counterclaim, rollo, pp. 515-520.
[14]
Id. at 516.
[15]
Decision of the trial court dated 27 May 1996. Records, pp. 235-242.
[16]
Rollo, pp. 11-21
[17]
Id. at 15.
[18]
Id. at 16.
[19]
Id. at 17-18.
[20]
Id. at 19.
[21]
Id.
[22]
Id. at 20.
[23]
Id. at 43-44.
[24]
Comment, id. at 696-715.
[25]
Naguiat v. Court of Appeals, G.R. No. 118375, 3 October 2003, 412 SCRA 591, 595.
[26]
Litonjua v. Fernandez, G.R. No. 148116, 14 April 2004, 427 SCRA 478, 489.
[27]
Austria- Magat v. Court of Appeals, 426 Phil. 263, 278 (2002). Additionally, Art. 1456 of the Civil Code
states: If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a
trustee of an implied trust for the benefit of the person from whom the property comes.
[28]
Policarpio v. Court of Appeals, 336 Phil. 329, 338 (1997).
[29]
Philippine Economic Zone Authority v. Hon. Fernandez, 411 Phil. 107, 119 (2001), citing Ramos v.
Court of Appeals, 302 SCRA 589 (1999), Serna v. Court of Appeals, 308 SCRA 527 (1999).
[30]
Leyson, et al. v. Bontuyan, et al., G.R. No. 156357, 18 February 2005, citing Vda. De Cabrera v. Court
of Appeals, 67 SCRA 339 (1997), and David v. Malay, 318 SCRA 711 (1999).
[31]
Archipelago Management and Marketing Corp. v. Court of Appeals, 359 Phil. 363, 382 (1998) citing De
Roda v. W. A. Lalk and E. Michael & Co., Inc., 48 Phil. 107-108 (1925).
[32]
Ramos v. Heirs of Honorio Ramos, Sr., 431 Phil. 337, 346 (2002).
[33]
Lao v. Villones-Lao, 366 Phil. 49, 58 (1999).
[34]
Montanez v. Mendoza, 441 Phil. 47, 56 (2002).
[35]
Amended Complaint, rollo, pp. 526-527.
[36]
Exhibit A, List of Exhibits for the Plaintiffs-Appellants, p. 1. Felipa Delfin executed an Affidavit of Loss
dated 16 June 1980. It appears also that Lot No. 213 was belatedly registered in the name of the spouses Delfin
because the owners duplicate copy of OCT No. RO-5563 (14516), also a reconstituted title, was lost and the second
owners copy was issued only on 5 September 1980; Exhibit E, List of Exhibits for the Plaintiffs-Appellants, p. 6.
[37]
Arlegui v. Court of Appeals, 428 Phil. 381, 398 (2002).
[38]
Reyes v. Court of Appeals, 374 Phil. 236, 242-243 (1999).
[39]
Complaint, rollo, pp. 511-512.
[40]
Martinez v. Court of Appeals, G.R. No. 131673, 10 September 2004, 438 SCRA 130, 155-156.
[41]
Seastar Marine Services, Inc. v. Bul-an, Jr., G.R. No. 142609, 25 November 2004, 444 SCRA 140, 153.
[42]
Archipelago Management and Marketing Corp. v. Court of Appeals, supra note 31.
[43]
Rollo, p. 9.
[44]
RULES OF COURT, Rule 132, Sec. 23.
[45]
RULES OF COURT, Rule 132, Sec. 19.
[46]
RULES OF COURT, Rule 132, Sec.24: If the record is not kept in the Philippines, there must also be a
certificate that the attesting officer has the custody thereof. If the office in which the record is kept is in a foreign
country, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice consul,
or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which
the record is kept, and authenticated by the seal of his office.
[47]
RULES OF COURT, Rule 132, Sec.25.
[48]
Philippine American Life Insurance Company v. Court of Appeals, 398 Phil. 559, 567 (2000).
[49]
TSN, 2 February 1996, p. 31.
[50]
Records, p. 231.
[51]
F.D. REGALADO, REMEDAL LAW COMPENDIUM, vol. 2, (Eighth Revised ed., 2000), 695,
citing Sheraton-Palace Hotel v. Quijano, [CA] 64 O.G. 9118.
[52]
Exhibit E, List of Exhibits for the Plaintiffs-Appellant, p. 6.
[53]
Trinidad D. Datar, et al. v. Spouses Rodolfo Delfin and Felipa Belo, 13 December 1993, Exhibit B, List
of Exhibits for the Plaintiffs and Defendants, pp. 6-15.
[54]
Id. at 7.
[55]
CIVIL CODE, Art. 140.
[56]
Rollo, pp. 538-564.
[57]
Id. at 557-558.
[58]
TSN, 16 January 1996, p. 5.
Republic of the Philippines
Supreme Court
Manila
THIRD DIVISION
ADELAIDA MENESES G.R. No. 172196

(deceased), substituted by her
heir MARILYN M. Present:
CARBONEL-GARCIA,
Petitioner, VELASCO, JR., J., Chairperson,
PERALTA,
ABAD,
- versus - MENDOZA, and
PERLAS-BERNABE, JJ.
Promulgated:
ROSARIO G.
VENTUROZO, October 19, 2011
Respondent.
x------------------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:
This is a petition for review on certiorari[1] of the Court of Appeals Decision

dated October 27, 2005 in CA-G.R. CV No. 78217 and its Resolution dated April
5, 2006, denying petitioners motion for reconsideration.
The Court of Appeals Decision reversed and set aside the Decision of the
Regional Trial Court (RTC) of Dagupan City, Branch 40 in Civil Case No. D-
9040, as the appellate court declared respondent Rosario G. Venturozo the owner
of the land in dispute, and ordered petitioner Adelaida Meneses to vacate and
surrender her possession thereof to respondent.
The facts are as follows:
On June 8, 1988, plaintiff Rosario G. Venturozo, respondent herein, filed a

Complaint[2] for ownership, possession x x x and damages in the Regional Trial
Court (RTC) of Dagupan City against defendant Adelaida Meneses, petitioner
herein, alleging that she (plaintiff) is the absolute owner of an untitled coconut
land, containing an area of 2,109 square meters, situated at Embarcadero,
Mangaldan, Pangasinan, and declared under Tax Declaration No.
239. Plaintiff alleged that she purchased the property from the spouses Basilio de
Guzman and Crescencia Abad on January 31, 1973 as evidenced by a Deed of
Absolute Sale,[3] and that the vendors, in turn, purchased the property from
defendant as evidenced by a Deed of Absolute Sale[4] dated June 20, 1966. Plaintiff
alleged that she has been in possession of the land until May 1983 when defendant
with some armed men grabbed possession of the land and refused to vacate despite
repeated demands prompting her to engage the services of counsel. Plaintiff prayed
that after preliminary hearing, a writ of preliminary mandatory injunction be
issued; and that after hearing, a decision be rendered declaring her as the owner of
the property in dispute, ordering defendant to vacate the property in question and
to pay her P5,000.00 as attorneys fees; P1,000.00 as litigation
expenses; P10,000.00 as damages and to pay the costs of suit.
In her Answer,[5] defendant Adelaida Meneses stated that plaintiff is the

daughter of Basilio de Guzman, the vendee in the Deed of Absolute Sale dated
June 20, 1966 that was purportedly executed by her (defendant) covering the
subject property. Defendant alleged that she never signed any Deed of Absolute
Sale dated June 20, 1966, and that the said deed is a forgery. Defendant also
alleged that she never appeared before any notary public, and she did not obtain a
residence certificate; hence, her alleged sale of the subject property to Basilio de
Guzman is null and void ab initio. Consequently, the Deed of Absolute Sale
dated January 31, 1973, executed by Basilio de Guzman in favor of plaintiff,
covering the subject property, is likewise null and void. Defendant stated that she
acquired the subject property from her deceased father and she has been in
possession of the land for more than 30 years in the concept of owner. Plaintiffs
allegation that she (defendant) forcibly took possession of the land is a falsehood.
Defendant stated that this is the fourth case the plaintiff filed against her
concerning the land in question.
In her Counterclaim, defendant stated that in view of the nullity of the
falsified Deed of Absolute Sale of the subject property, and the fact that plaintiff
and her father Basilio de Guzman had never been in actual possession of the
property, plaintiff is under legal obligation to execute a deed of reconveyance over
the said property in her favor.
The issue before the trial court was whether the sale made by defendant
Adelaida Meneses in favor of plaintiffs father, Basilio de Guzman, was valid.[6]
On July 18, 1991, the RTC of Dagupan City, Branch 40 (trial court)
rendered a Decision in favor of defendant Adelaida Meneses. The dispositive
portion of the Decision reads:
WHEREFORE, judgment is hereby rendered:
1) Declaring the Deed of Absolute and Definite Sale dated June 20, 1966
(Exhibit B) and the Deed of Absolute and Definite Sale dated January 31,
1973 (Exhibit A) null and void ab initio;
2) Declaring the defendant Adelaida Meneses as the owner of the property in

question;
3) Ordering the plaintiff Rosario G. Venturozo to execute a Deed of

Reconveyance in favor of the defendant Adelaida Meneses over the
property in question described in paragraph 2 of the complaint;
4) Ordering the plaintiff to pay to the defendant P10,000.00 as damages;

and P1,000.00, as litigation expenses.
SO ORDERED.[7]
The trial court found that defendant Adelaida Meneses inherited the land in
dispute from her father, Domingo Meneses; that she did not sell her property to
Basilio de Guzman in 1966; and that the signature of Adelaida Meneses on the
Deed of Absolute Sale dated June 20, 1966 is a forgery. The trial court stated that
the signature of Adelaida Meneses, as appearing on the Deed of Absolute Sale
dated June 20, 1966, is very much different from her specimen signatures and
those appearing in the records of Civil Case No. 1096 in the Municipal Trial Court
of Mangaldan. It held that since there was no valid transfer of the property by
Adelaida Meneses to Basilio de Guzman, the conveyance of the same property in
1973 by Basilio de Guzman to his daughter, plaintiff Rosario G. Venturozo, was
also invalid. The trial court stated that the claim of plaintiff Rosario G. Venturozo,
that her parents, Spouses Basilio and Crescencia de Guzman, purchased from
defendant Adelaida Meneses the subject property in 1966, is negated by
defendants continued possession of the land and she gathered the products
therefrom.
Plaintiff appealed the decision of the trial court to the Court of Appeals.
On October 27, 2005, the Court of Appeals rendered a Decision reversing

the decision of the trial court. The dispositive portion of the appellate courts
decision reads:
WHEREFORE, the appealed decision of the Regional Trial Court
of Dagupan City (Branch 40) is REVERSED and SET ASIDE and a new one
rendered declaring plaintiff-appellant the owner of the subject land and ordering
defendant-appellee to vacate and surrender possession thereof to the former.[8]
The Court of Appeals stated that appellee Adelaida Meneses failed to prove
by clear and convincing evidence that her signature on the Deed of Absolute Sale
dated June 20, 1966 was a forgery. Instead, she admitted on direct examination that
her signature on the Deed of Absolute Sale was genuine, thus:
Q. I am showing to you Exhibit 6 and Exhibit A for the plaintiff a Deed of

Absolute Sale o[f] Real Property of one (1) Adelaida Meneses in favor of
Basilio de Guzman. Will you examine this if you know this Deed of Absolute
Sale?
A. I do not know this document, sir.
Q. There is a signature over the name of the vendor Adelaida Meneses which was
previously marked as Exhibit 6-a and Exhibit A-1 for the plaintiff, will you
examine this signature, if do you (sic) know this signature?
A. This is my signature, sir.[9]
According to the Court of Appeals, such admission is binding on her, there

being no showing that it was made through palpable mistake or that no such
admission was made.[10]
The Court of Appeals also stated that mere variance of signatures cannot be
considered as conclusive proof that the same were forged, as forgery cannot be
presumed.[11]Appellee Adelaida Meneses should have produced specimen
signatures appearing on documents executed in or about the year 1966 for a better
comparison and analysis.[12]
The Court of Appeals held that a notarized document, like the questioned
Deed of Absolute Sale dated June 20, 1966, has in its favor the presumption of
regularity, and to overcome the same, there must be evidence that is clear,
convincing and more than merely preponderant; otherwise, the document should be
upheld.[13] Moreover, Atty. Abelardo G. Biala the notary public before whom the
questioned Deed of Sale was acknowledged testified and confirmed its
genuineness and due execution, particularly the signature in question. The
appellate court stated that as against appellee Adelaida Meneses version, Atty.
Bialas testimony, that appellee appeared before him and acknowledged that the
questioned deed was her free and voluntary act, is more credible. The testimony of
a notary public enjoys greater credence than that of an ordinary witness.[14]
The Court of Appeals held that appellee Adelaida Meneses failed to present
clear and convincing evidence to overcome the evidentiary force of the questioned
Deed of Absolute Sale dated June 1966, which appears on its face to have been
executed with all the formalities required by law.
Adelaida Meneses motion for reconsideration was denied for lack of merit
by the Court of Appeals in a Resolution[15] dated April 5, 2006.
Hence, Adelaida Meneses, substituted by her heir, filed this petition raising
this lone issue:
I
WHETHER THE DECISION OF THE COURT OF APPEALS, WHICH
REVERSED THE DECISION OF THE REGIONAL TRIAL COURT, IS IN
KEEPING WITH BOTH LAW AND JURISPRUDENCE.[16]
Petitioner contends that her statement, made during the course of her
testimony in the trial court, was taken out of context by respondent to be used
merely as an argumentative point. The examining lawyer used the words, Do you
know this signature? viz.:
Q. I am showing to you Exhibit 6 and Exhibit A for the plaintiff a Deed of

Absolute Sale o[f] Real Property of one (1) Adelaida Meneses in favor of
Basilio de Guzman. Will you examine this if you know this Deed of Absolute
Sale?
A. I do not know this document, sir.
Q. There is a signature over the name of the vendor Adelaida Meneses which was
previously marked as Exhibit 6-a and Exhibit A-1 for the plaintiff, will you
examine this signature, if do you (sic) know this signature?
A. This is my signature, sir.[17]
Petitioner contends that in the above-quoted transcript of stenographic notes,

she was merely asked if she was cognizant of such a signature as hers or whether
the signature appearing on the questioned document was similar to that of her
signature, and not if she was the one who indeed affixed such signature on the said
deed of sale.
She avers that the general rule that a judicial admission is conclusive upon
the party invoking it and does not require proof admits of two exceptions: (1) when
it is shown that the admission was made through palpable mistake; and (2) when it
is shown that no such admission was in fact made. The latter exception allows one
to contradict an admission by denying that he made such an admission. For
instance, if a party invokes an admission by an adverse party, but cites the
admission out of context, then the one making the admission may show that he
made no such admission, or that his admission was taken out of context.[18] This
may be interpreted as to mean not in the sense in which the admission is made to
appear.[19]
Petitioner also contends that a comparison of the signature on the Deed of
Absolute Sale dated June 20, 1966 and her specimen signatures, as well as her
genuine signature on pleadings, were made by the trial court, and it ruled that her
signature on the Deed of Absolute Sale dated June 20, 1966 was a forgery. She
submits that the trial courts evaluation of the credibility of witnesses and their
testimonies is entitled to great respect,[20] and the appellate court should have given
weight to the trial courts findings that her signature on the said Deed of Absolute
Sale was a forgery.
The petition is meritorious.
The rule is that the jurisdiction of the Court over appealed cases from the
Court of Appeals is limited to the review and revision of errors of law allegedly
committed by the appellate court, as its findings of fact are deemed
conclusive.[21] Thus, this Court is not duty-bound to analyze and weigh all over
again the evidence already considered in the proceedings below.[22] However, this
rule admits exceptions,[23] such as when the findings of fact of the Court of Appeals
are contrary to the findings and conclusions of the trial court[24] like in this case.
The necessity of a public document for contracts which transmit or

extinguish real rights over immovable property, as mandated by Article 1358 of the
Civil Code,[25] is only for convenience; it is not essential for validity or
enforceability.[26] As notarized documents, Deeds of Absolute Sale carry
evidentiary weight conferred upon them with respect to their due execution [27] and
enjoy the presumption of regularity which may only be rebutted by evidence so
clear, strong and convincing as to exclude all controversy as to falsity. [28] The
presumptions that attach to notarized documents can be affirmed only so long as it
is beyond dispute that the notarization was regular.[29] A defective notarization will
strip the document of its public character and reduce it to a private
instrument.[30] Consequently, when there is a defect in the notarization of a
document, the clear and convincing evidentiary standard normally attached to a
duly-notarized document is dispensed with, and the measure to test the validity of
such document is preponderance of evidence.[31]
In this case, it should be pointed out that contrary to the finding of the Court
of Appeals, the Deed of Sale dated June 20, 1966 did not comply with the
formalities required by law, specifically Act No. 496,[32] otherwise known as The
Land Registration Act, which took effect on January 1, 1903, as Section 127 of the
Act provides:
FORMS
Section 127. Deeds, conveyances, mortgages, leases, releases, and
discharges affecting lands, whether registered under this Act or
unregistered, shall be sufficient in law when made substantially in
accordance with the following forms, and shall be as effective to convey,
encumber, lease, release, discharge, or bind the lands as though made in
accordance with the more prolix form heretofore in use: Provided, That every
such instrument shall be signed by the person or persons executing the same,
in the presence of two witnesses, who shall sign the instrument as witnesses to
the execution thereof, and shall be acknowledged to be his or their free act and
deed by the person or persons executing the same, before the judge of a court of
record or clerk of a court of record, or a notary public, or a justice of the
peace, who shall certify to such acknowledgment x x x.[33]
In the Deed of Absolute Sale dated June 20, 1966, the Notary Public signed
his name as one of the two witnesses to the execution of the said deed; hence, there
was actually only one witness thereto. Moreover, the residence certificate of
petitioner was issued to petitioner and then it was given to the Notary Public the
day after the execution of the deed of sale and notarization; hence, the number of
petitioners residence certificate and the date of issuance (June 21, 1966) thereof
was written on the Deed of Absolute Sale by the Notary Public on June 21, 1966,
after the execution and notarization of the said deed on June 20,
1966.[34] Considering the defect in the notarization, the Deed of Absolute Sale
dated June 20, 1966 cannot be considered a public document, but only a private
document,[35] and the evidentiary standard of its validity shall be based on
preponderance of evidence.
Section 20, Rule 132 of the Rules of Court provides that before any private
document offered as authentic is received in evidence, its due execution and
authenticity must be proved either: (a) by anyone who saw the document executed
or written; or (b) by evidence of the genuineness of the signature or handwriting of
the maker.
In regard to the genuineness of petitioners signature appearing on the Deed

of Absolute Sale dated June 20, 1966,[36] the Court agrees with the trial court that
her signature therein is very much different from her specimen signatures [37] and
those appearing in the pleadings[38] of other cases filed against her, even
considering the difference of 17 years when the specimen signatures were
made. Hence, the Court rules that petitioners signature on the Deed of Absolute
Sale dated June 20, 1966 is a forgery.
The Court agrees with petitioner that her admission was taken out of context,
considering that in her Answer[39] to the Complaint, she stated that the alleged
Deed of Sale purportedly executed by her in favor of Basilio de Guzman is a
forgery; that she never signed the said Deed of Sale; that she did not appear
personally before the Notary Public; and that she did not secure the residence
certificate mentioned in the said Deed of Sale. She also testified that she never sold
her land to Basilio de Guzman;[40] that she never met the Notary Public, Attorney
Abelardo Biala,[41] and that she did not meet Basilio de Guzman on June 20,
1966.[42] The trial court found petitioner and her testimony to be credible, and
declared the Deed of Sale dated June 20, 1966 null and void ab initio. These
circumstances negate the said admission.
The Court finds the Notary Publics testimony self-serving and unreliable,
because although he testified that petitioner was the one who submitted her
residence certificate to him on June 21, 1966,[43] the next day after the Deed of
Absolute Sale was executed on June 20, 1966, Crescencia de Guzman, respondents
mother, testified that she and her husband got the residence certificate from
petitioner and gave it to the Notary Public on June 21, 1966.[44] Thus, it is doubtful
whether the Notary Public really knew the identity of the vendor who signed the
Deed of Absolute Sale[45] dated June 20, 1966.
The Court notes that the trial court found petitioner and her testimony to be
credible. It is a well-settled doctrine that findings of trial courts on the credibility
of witnesses deserve a high degree of respect.[46] Having observed the deportment
of witnesses during the trial, the trial judge is in a better position to determine the
issue of credibility.[47]
In fine, the preponderance of evidence is with petitioner.
WHEREFORE, the petition is GRANTED. The Court of Appeals

Decision dated October 27, 2005 and its Resolution dated April 5, 2006 in CA-
G.R. CV No. 78217 are REVERSED and SET ASIDE, and the Decision of the
Regional Trial Court of Dagupan City, Branch 40 in Civil Case No. D-9040 is
hereby REINSTATED.
No costs.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
PRESBITERO J. VELASCO, JR.

Associate Justice
Chairperson
ROBERTO A. ABAD JOSE CATRAL MENDOZA

ESTELA M. PERLAS-BERNABE
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.
PRESBITERO J. VELASCO, JR.

Associate Justice
Third Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
[1]
Under Rule 45 of the Rules of Court.
[2]
Docketed as Civil Case No. D-9040, records, p. 1.
[3]
Exhibit B, folder of exhibits, p. 2.
[4]
Exhibit A, id. at 1.
[5]
Records, p. 12.
[6]
Pre-Trial Order, id. at 18.
[7]
Rollo, pp. 60-61.
[8]
Id. at 83.
[9]
TSN, October 23, 1989, p. 14. (Emphasis supplied.)
[10]
Rules of Court, Rule 129, Sec. 4.
[11]
Citing Veloso v. Court of Appeals, 329 Phil. 398, 406 (1996).
[12]
Citing Causapin v. Court of Appeals, G.R. No. 107432, July 4, 1994, 233 SCRA 615, 624.
[13]
Citing Bernardo v. Court of Appeals, 387 Phil. 736, 746 (2000)..
[14]
Citing Sales v. Court of Appeals, G.R. No. L-40145, July 29, 1992, 211 SCRA 858, 865.
[15]
Rollo, p. 89.
[16]
Id. at 17.
[17]
TSN, October 23, 1989, p. 14. (Emphasis supplied.)
[18]
Citing Atilo III v. Court of Appeals, 334 Phil. 546, 552 (1997).
[19]
Id.
[20]
Citing People v. Binad Sy Chua, 444 Phil. 757, 766 (2003).
[21]
Fuentes v. Court of Appeals, 335 Phil. 1163, 1167-1168 (1997).
[22]
Id. at 1168.
[23]
Id.
[24]
Bernales v. Heirs of Julian Sambaan, G.R. No. 163271, January 15, 2010, 610 SCRA 90.
[25]
Civil Code, Art. 1358. The following must appear in a public document:
(1) Acts and contracts which have for their object the creation, transmission, modification or
extinguishment of real rights over immovable property; sales of real property or of an interest therein are governed
by Articles 1403, No. 2 and 1405.
[26]
Pan Pacific Industrial Sales Co., Inc. v. Court of Appeals, G.R. No. 125283, February 10, 2006, 482 SCRA 164,
180.
[27]
Rules of Court, Rule 132.
SEC. 19. Classes of documents.For purposes of their presentation in evidence, documents are either public
or private.
Public documents are:
xxxx
(b) Documents acknowledged before a notary public except last wills and testaments; x x x x
xxxx
SEC. 23. Public documents as evidence. Documents consisting of entries in public records made in the performance
of a duty by a public officer are prima facie evidence of the facts therein stated. All other public documents are
evidence, even against a third person, of the fact which gave rise to their execution and of the date of the latter.
xxxx
SEC. 30. Proof of notarial documents. Every instrument duly acknowledged or proved and certified as
provided by law, may be presented in evidence without further proof, the certificate of acknowledgement
being prima facie evidence of the execution of the instrument of document involved.
[28]
Dizon v. Tuazon, G.R. No. 172167, July 9, 2008, 557 SCRA 487, 494.
[29]
Dela Rama v. Papa, G.R. No. 142309, January 30, 2009, 577 SCRA 233, 244.
[30]
Fuentes v. Roca, G.R. No. 178902, April 21, 2010, 618 SCRA 702, 709.
[31]
Dela Rama v. Papa, supra note 29, at 244-245.
[32]
Entitled AN ACT TO PROVIDE FOR THE ADJUDICATION AND REGISTRATION OF TITLES TO LANDS IN
THE PHILIPPINE ISLANDS.
[33]
Emphasis supplied.
[34]
TSN, July 18, 1989, pp. 10-12.
[35]
Fuentes v. Roca, supra note 30, at 709.
[36]
Exhibit B, folder of exhibits, p. 2.
[37]
Exhibit 8, id.
[38]
Exhibits 3, 3-F-1, 7, 7-F-1, id.
[39]
Records, p. 12.
[40]
TSN, October 23, 1989, pp. 14-16, 21-23.
[41]
Id. at 13, 15.
[42]
Id. at 15.
[43]
TSN, July 18, 1989, pp. 8-9.
[44]
TSN, December 19, 1988, pp. 15-18.
[45]
Exhibit A, folder of exhibits, p. 1.
[46]
Espano v. Court of Appeals, G.R. No. 120431, April 1, 1998, 288 SCRA 558, 563.
[47]
Id.
FIRST DIVISION
[G.R. No. 122973. July 18, 2000]
DIONISIO C. LADIGNON, petitioner, vs. COURT OF APPEALS and

LUZVIMINDA C. DIMAUN, respondents.
DECISION
YNARES-SANTIAGO, J.:
The instant Petition for Review seeks to set aside the December 11, 1995 Decision of
respondent Court of Appeals in CA-G.R. CV No. 38183 which reversed the May 20,
1992 Decision of the Regional Trial Court of Quezon City, Branch 85 in Civil Case No.
Q-90-5871.
The case originates from a Complaint for Declaration of Nullity of Conveyance and
Recovery of Possession and Damages,[1] filed on May 12, 1990 by private respondent
against petitioner, Richard C. Tong, Jose Porciuncula, Jr. and Litogo Company, Inc. In
the Complaint, private respondent alleged that petitioner, a relative by affinity, offered
his services as lawyer to mediate between her and the relatives of her adoptive mother
with respect to inheritance she was expecting to receive from her adoptive parents.
Private respondent claimed that petitioner made her sign a Petition[2] for the
reconstitution of Transfer Certificate of Title No. 240724, covering an eight hundred fifty
nine and seven/tenths (859.7) square meter parcel of land located in Talayan, Quezon
City, registered under her name and that of her adoptive mother, Ligaya Flores
Collantes. Said Petition was, however, dismissed on August 28, 1989 for her failure to
appear at the scheduled hearing. Private respondent claims that she did not know of
such dismissal, neither of the fact that Transfer Certificate of Title No. 240724 was
superseded by Transfer Certificate of Title No. 383675 of the Registry of Deeds of
Quezon City, in her name alone.
Attached to private respondents Complaint was a copy of a Deed of Absolute Sale

which appears to have been executed by her as vendor and by Litoco Co., Inc.,
represented by its President, Richard Tong, as vendee. Subject of the said sale was the
Talayan property. Under the terms of the Deed, the purchase price of the sale was
P800,000.00, receipt of which was therein specifically acknowledged by the vendor. The
Deed, dated May 12, 1989, was duly notarized in Manila on the same date as
Document No. 267, Page No. 55, Book No. VI, Series of 1989 of the notarial books of
Notary Public Elsa R. Reblora.
Private respondent denied having received the purchase price therefor, nor having
signed the same, insisting that her alleged signatures thereon are falsified or forged.
Thus, she prayed for the declaration of nullity of the said Deed of Absolute Sale and for
the defendants therein to be ordered to surrender possession of the lot covered thereby
as well as the owners duplicate copy of TCT No. 38365. Private respondent also sought
P50,000.00 in moral damages, P30,000.00 as attorneys fees, exemplary and nominal
damages, litigation expenses and costs of suit.
During pre-trial, the parties agreed to limit the issues to the following
"1.....Whether the signatures of plaintiff on the Deed of Absolute Sale

(Exhibit "F") conveying the inherited property to defendants are
forged/falsified or not;
2.....Whether the failure of plaintiff to reconstitute TCT No. 240724

covering the property subject matter hereof affects the issuance of TCT
No. 383675 or not;
3.....Whether defendants should be held liable for damages to plaintiff for

their wanton acts of depriving plaintiff of her inherited property."[3]
The trial court found the evidence submitted by private respondent as insufficient to
overturn the public document sought to be annulled. Thus, a Decision was rendered on
May 20, 1992, in favor of petitioner, to wit
"WHEREFORE, in the light of the foregoing, judgment is hereby rendered

DISMISSING the complaint and, on the counterclaim, ordering the plaintiff
to pay defendant Dionisio Ladignon the sum of P50,000.00 by way of
moral and exemplary damages, and P25,000.00 as attorneys fees, plus
costs.
The crossclaim of defendant Litogo Company, Inc. and Richard Tong

against defendant Dionisio Ladignon is likewise DISMISSED.
SO ORDERED."[4]
Private respondent appealed the decision to the Court of Appeals which reversed the
trial courts decision dated May 20, 1992. In reversing the said judgment, respondent
Court of Appeals relied on the following findings: First, that the authenticity of TCT No.
383675, which was the subject of the questioned deed, was highly questionable;
and second, that the private respondent was shown to have no participation in the
questioned deed of sale.
The dispositive portion of said Decision states:
"WHEREFORE, premises considered, the appeal is GRANTED being

meritorious. Judgment appealed from is hereby REVERSED and
judgment is hereby rendered as follows:
1).....The deed of sale of the Talayan property is declared NULL and
VOID. Consequently, the entry in what purports to be TCT No. 383675 re
said sale is also ANNULLED and CANCELLED;
2).....Ordering Ladignon to pay appellant Dimaun P50,000.00 by way of

moral damages; P30,000.00 by way of attorneys fees; and P30,000.00 by
way of exemplary damages;
3).....Ordering Litogo to surrender possession of the Talayan property to

appellant Dimaun;
4).....Ordering the Register of Deeds of Quezon City to cancel TCT No.

383675 which is hereby declared annulled and of no force and effect;
5).....Atty. Ladignon is ordered to return to Litogo Company the amount of

P2,063,280.00 with interest at 6% per annum from May 12, 1989 until fully
paid; and
6).....To pay the costs of suit.
SO ORDERED."[5]
Hence, the instant petition for review based on the following grounds:
"I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN GIVING

CREDENCE TO THE THEORY OF THE PRIVATE RESPONDENT
WHEN THERE IS NO EVIDENCE EVER ADDUCED TO SUBSTANTIATE
THE ASSEVERATION.
II
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE

ABUSE OF DISCRETION, TANTAMOUNT TO LACK OF JURISDICTION
WHEN IT DISREGARDED JURISPRUDENTIAL EDICTS ON
PRESUMPTIONS THAT PRIVATE TRANSACTIONS ARE FAIR AND
REGULAR AND THAT DOCUMENTS EXECUTED BY THE PARTIES
ARE VALID AND REGULAR.
III
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN

REVERSING THE FACTUAL FINDINGS OF THE TRIAL COURT IN THE
ABSENCE OF ANY SHOWING THAT THE LOWER COURT ABUSED
ITS DISCRETION IN APPRECIATING THE EVIDENCE ADDUCED BY
THE PARTIES.
IV
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE

ABUSE OF DISCRETION TANTAMOUNT TO LACK OF JURISDICTION
WHEN IT ACCUSED PETITIONER OF COMMITTING AN INFRACTION
WHEN THE EVIDENCE ON RECORD DOES NOT SUPPORT THE
CONCLUSION AND NO LESS THAN THE PROSECUTORIAL ARM OF
THE GOVERNMENT DISMISSED THE COMPLAINT FILED BY THE
PRIVATE RESPONDENT FOR WANT OF PROBABLE CAUSE."[6]
It is evident that the instant Petition calls for a review of the facts of the case. On this
matter, well-settled is the rule that in the exercise of the power to review, the findings of
fact of the Court of Appeals are conclusive and binding on this Court. However, there
are recognized exceptions among which is when the factual findings of the trial court
and the appellate court are conflicting.[7] The instant case falls within this exception and
we are thus constrained to examine the arguments presented by petitioner.
We note that the Deed of Absolute Sale being questioned is a public document, having
been notarized by Atty. Elsa R. Reblora who appeared on the witness stand to testify on
the due execution of the same.[8]
As a public document, the subject Deed of Absolute Sale had in its favor the
presumption of regularity, and to contradict the same, there must be evidence that is
clear, convincing and more than merely preponderant; otherwise the document should
be upheld.[9]
It is also worth stressing that private respondent claim that her signature on the subject
Deed of Absolute Sale is forged. As a rule, forgery cannot be presumed and must be
proved by clear, positive and convincing evidence and the burden of proof lies on the
party alleging forgery.[10]
Was the evidence presented by private respondent against the Deed of Absolute Sale
clear, convincing and more than merely preponderant to overcome both the
presumption of regularity attached to public documents and to meet the stringent
requirements to prove forgery?
Far from being clear and convincing, all private respondent had to offer by way of
evidence was her mere denial that she had signed the same. Such mere denial will not
suffice to overcome the positive value of the subject Deed, a notarized document.
Indeed, even in cases where the alleged forged signature was compared to samples of
genuine signatures to show its variance therefrom, this Court still found such evidence
insufficient, to wit --
"Petitioner contends that his signature on the power of attorney was

falsified. He also alleges that the same was not duly notarized for as
testified by Atty. Tubig himself, he did not sign thereon nor was it ever
recorded in his notarial register. To bolster his argument, petitioner had
presented checks, marriage certificate and his residence certificate to
prove his alleged genuine signature which when compared to the
signature in the power of attorney, showed some difference.
We found, however, that the basis presented by the petitioner was

inadequate to sustain his allegation of forgery. Mere variance of the
signatures cannot be considered as conclusive proof that the same were
forged. Forgery cannot be presumed (Tenio-Obsequio vs. Court of
Appeals, G.R. 107967, March 1, 1994). Petitioner, however, failed to
prove his allegation and simply relied on the apparent difference of the
signatures. His denial had not established that the signature on the power
of attorney was not his.
x x x............................x x x............................x x x
Documents acknowledged before a notary public have the evidentiary

weight with respect to their due execution. The questioned power of
attorney and deed of sale, were notarized and therefore, presumed to be
valid and duly executed. Atty. Tubig denied having notarized the said
documents and alleged that his signature had also been falsified. He
presented samples of his signature to prove his contention. Forgery
should be proved by clear and convincing evidence and whoever alleges it
has the burden of proving the same. Just like the petitioner, witness Atty.
Tubig merely pointed out that his signature was different from that in the
power of attorney and deed of sale. There had never been an accurate
examination of the signature, even that of the petitioner. To determine
forgery, it was held in Cesar vs. Sandiganbayan (G.R. Nos. 54719-50, 17
January 1985, quoting Osborn, The Problem of Proof) that:
"The process of identification, therefore, must include the

determination of the extent, kind, and significance of this
resemblance as well as of the variation. It then becomes
necessary to determine whether the variation is due to the
operation of a different personality, or is only the expected
and inevitable variation found in the genuine writing of the
same writer. It is also necessary to decide whether the
resemblance is the result of a more or less skillful imitation,
or is the habitual and characteristic resemblance which
naturally appears in a genuine writing. When these two
questions are correctly answered the whole problem of
identification is solved."[11]
In American Express International, Inc. v. Court of Appeals,[12] the means to prove

the genuineness of a handwriting were laid down, as follows --
"Licartes testimony likewise failed to demonstrate the existence of forgery.
He only stated that the cardholders denied having made the transactions
as they were allegedly not in the Philippines. Forgery cannot be deduced
therefrom. As stated in Tenio-Obsequio v. Court of Appeals (G.R. No.
107967, 1 March 1994, 230 SCRA 550), forgery cannot be presumed; it
must be proved by clear, positive and convincing evidence. In imputing
discrepancy in the signatures appearing in the charge forms and those
appearing on the credit cards as well as in its records, AMEXCO should
have conducted an examination of the signatures before the court (Sec.
22. How genuineness of handwriting proved. The handwriting of a person
may be proved by any witness who believes it to be the handwriting of
such person because he has seen the person write, or has seen writing
purporting to be his upon which the witness has acted or been charged,
and has thus acquired knowledge of the handwriting of such person.
Evidence respecting the handwriting may also be given by a comparison,
made by the witness or the court, with writings admitted or treated as
genuine by the party against whom the evidence is offered, or proved to
be genuine to the satisfaction of the judge [Rule 132, Rules of Court]). A
comparison of both the differences and similarities in the questioned
signatures should have been made to satisfy the demands of evidence.
Failing to introduce ample proof to substantiate its claim of forgery,
petitioners case has no leg to stand on."
In the case at bar, we cannot accept the claim of forgery where no comparison of
private respondents signatures was made, no witness (save for private respondent
herself) was presented to testify on the same, much less an expert witness called, and
all that was presented was private respondents testimony that her signature on the
questioned Deed was forged. Indeed, even when the evidence is conflicting, the public
document must still be upheld.[13]
Neither was private respondent able to prove that contrary to the recital in the
acknowledgment, she never appeared before the notary public and acknowledged the
deed to be her voluntary act, a burden which was hers to discharge.[14] Instead, the
notary public even directly testified that private respondent had acknowledged to her
that she had the signed the questioned Deed, to wit
"Q:....Atty. Reblora, on May 12, 1989, you were the duly commissioned
Notary Public for the City of Manila, is that correct?
A:....Yes sir.
Q:....And do you know one of the defendants in this case Richard Tong?
A:....Yes sir.
Q:....And why do you know him?

A:....I know him because aside from the fact that he is holding office on the
same building that I work, on May 12, 1989, he together with or
accompanied by a woman who introduced herself as Luzviminda
Collantes, then asked me to notarize a deed of sale. (sic)
Q:....I am showing to you a deed of sale, previously marked as Exh. 4 for

Ladignon and another deed of sale which was marked as Exh. F for the
plaintiff, will you please tell the Honorable Court, what is the relation of this
document to the document that you notarized on May 12, 1989?
A:....These are the same. This is the same deed of sale that I notarized on
that day.
Q:....And appearing at the end of the same are the signature, document
number 267, page no. 55, book no. 6, series of 1989 which is marked as
Exh. 4-Ladignon and Exh. F for the plaintiff is the document no. 267, page
no. 55, book 6, series of 1989, will you please state what are the relation
of these 2 documents as per numbers and identification of the same?
A:....These are the same and one sir.
Q:....Now, after presented (sic) to you this document for notarization, what
did you do when the same was presented to you?
A:....When they came to my office, I asked them if the parties to the

transaction were present.
Q:....Now, you asked the parties, were Luzviminda the plaintiff and
Richard Tong present at that time?
A:....Yes sir.
Q:....After you were satisfied of their presence, what did you do next in
relation to your job as a Notary Public?
A:....After that, I verified whether their signature on the deed of sale are
their signature. After verifying to be their signature (sic) and the same to
have been acknowledged by the same, I notarized the document.
Q:....When you said that you have verified, that these signatures
appearing on Exh. F for Ladignon are their signature, to whom are you
referring to?
A:....These parties namely: Richard Tong and Luzviminda Collantes.

Q:....And when you asked whether they are their signatures, did they
confirm the same?
A:....Yes, they answered yes."[15]
All told, we find that private respondent, who has filed the Complaint for nullity of
conveyance below has not sufficiently met the burden of proof to sustain her case and
for such reason, we must reinstate the dismissal of her complaint as ordered by the
court a quo.
In upholding private respondents position, respondent Court of Appeals gave much

importance to the claim by private respondent that there was no valid reconstitution of
Transfer Certificate of Title No. 240724 upon which Transfer Certificate of Title No.
383675 (subject of the questioned Deed of Absolute Sale) was derived. Respondent
Court of Appeals posited that Transfer Certificate of Title No. 383675 was "highly
questionable for the simple reason that no basis for its issuance has been shown." And
as such, it went on to conclude that "no Deed of Sale between plaintiff-appellant
Dimaun and Litogo had ever been executed." Aside from being an obvious stretch of
reasoning, this conclusion finds no basis in the case before us, which is simply one for
nullity of conveyance. What is worse, in ordering the cancellation of Transfer Certificate
of Title No. 383675, respondent Court of Appeals acted without jurisdiction. After all, it is
hornbook law that a torrens title cannot be collaterally attacked. The issue of validity of a
torrens title, whether fraudulently issued or not, may be posed only in an action brought
to impugn or annul it. Unmistakable, and cannot be ignored, is the germane provision of
Section 48 of Presidential Decree No. 1529, that a certificate of title can never be the
subject of a collateral attack. It cannot be altered, modified, or cancelled except in a
direct proceeding instituted in accordance with law.[16] Clearly, the action below for nullity
of conveyance is hardly the direct proceeding required by law to attack a Torrens
Certificate of Title.
WHEREFORE, the instant Petition for Review is hereby GRANTED. The challenged
Decision of the Court of Appeals is REVERSED and SET ASIDE. The Decision of the
Regional Trial Court of Quezon City, Branch 85, dismissing Civil Case No. Q-90-5871 is
REINSTATED in its totality. No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Pardo, JJ., concur.
[1]
Rollo, pp. 1-25, filed on March 6, 1989.
[2]
Exhibit "B", Complaint, Civil Case No. Q90-5871; Rollo, pp. 10-16.
[3]
Pre-Trial Order, Civil Case No. Q-90-5871, p. 3; Rollo, p. 154.
[4]
Decision, Civil Case No. Q-90-5871, p. 13; Rollo, p. 81.
[5]
Decision, CA-G.R. CV No. 38183, pp. 13-14; Records, pp. 67-68.
[6]
Petition for Review, pp. 3-4; Records, pp. 11-12.
[7]
American Express International, Inc. v. Court of Appeals, 308 SCRA 65, 69 (1999), citing Security Bank & Trust
Company v. Triumph Lumber and Construction Corporation, 301 SCRA 537 .
[8]
T.S.N., October 22, 1991, pp. 2-12.
[9]
See Bernardo v. Court of Appeals, G.R. No. 107791, 12 May 2000, citing Spouses Caoili v. Court of Appeals,
G.R. No. 128325, 14 September 1999.
[10]
Heirs of Gregorio v. Court of Appeals, 300 SCRA 565, 574 (1998)
[11]
Veloso vs. Court of Appeals, 260 SCRA 593, 601-602 (1996)
[12]
See Note 7, at pp. 71-72.
[13]
See R&B Insurance Corporation v. Court of Appeals, G.R. No. 108472, 9 October 1999.
[14]
See Aznar Brothers Realty Company v. Court of Appeals, G.R. No. 128102, 7 March 2000, citing Daroy v.
Abecia, 298 SCRA 239, 251 (1998)
[15]
T.S.N., October 22, 1991, pp. 3-4.
[16]
Pasay City & Republic Real Estate Corporation v. Court of Appeals, 299 SCRA 199 (1998); Carreon v. Court of
Appeals, G.R. No. 112041, 22 June 1998, citing Trinidad v. Intermediate Appellate Court, 204 SCRA 524 (1991)
Today is Sunday, October 29, 2017

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 172227 June 29, 2011
SPOUSES WILFREDO PALADA and BRIGIDA PALADA,* Petitioners,

vs.
SOLIDBANK CORPORATION and SHERIFF MAYO DELA CRUZ, Respondents.
DECISION
DEL CASTILLO, J.:
Allegations of bad faith and fraud must be proved by clear and convincing evidence.1
This Petition for Review on Certiorari2 under Rule 45 of the Rules of Court assails the January 11, 2006 Decision3 of the Court of
Appeals (CA) in CA-G.R. CV No. 84236 which dismissed the complaint filed by the petitioners against the respondents and declared
as valid the real estate mortgage and certificate of sale. Also assailed is the April 12, 2006 Resolution4 which denied the motion for
reconsideration thereto.
Factual Antecedents
In February or March 1997, petitioners, spouses Wilfredo and Brigida Palada, applied for a 3 million loan broken down as follows:
1 million as additional working capital under the bills discounting line; 500,000.00 under the bills purchase line; and 1.5 million
under the time loan from respondent Solidbank Corporation (bank).5
On March 17, 1997, petitioners received from the bank the amount of 1 million as additional working capital evidenced by a
promissory note6 and secured by a real estate mortgage7 in favor of the bank covering several real properties situated in Santiago
City.8
Due to the failure of petitioners to pay the obligation, the bank foreclosed the mortgage and sold the properties at public auction.9
On August 19, 1999, petitioners filed a Complaint10 for nullity of real estate mortgage and sheriff s certificate of sale11 with prayer for
damages, docketed as Civil Case No. 35-2779, against the bank and respondent Sheriff Mayo dela Cruz (sheriff) before the
Regional Trial Court (RTC) of Santiago City, Branch 35.12 Petitioners alleged that the bank, without their knowledge and consent,
ncluded their properties covered by Transfer Certificate of Title (TCT) Nos. T-225131 and T-225132,13 among the list of properties
mortgaged; that it was only when they received the notice of sale from the sheriff in August 1998 that they found out about the
nclusion of the said properties; that despite their objection, the sheriff proceeded with the auction sale; and that the auction sale was
done in Santiago City in violation of the stipulation on venue in the real estate mortgage.14
The bank, in its Answer,15 denied the material allegations of the Complaint and averred that since petitioners were collaterally
deficient, they offered TCT Nos. T-237695, T-237696, T-225131 and T-225132 as additional collateral;16that although the said
properties were at that time mortgaged to the Philippine National Bank (PNB), the bank accepted the offer and caused the
annotation of the mortgage in the original copies with the Register of Deeds with the knowledge and consent of petitioners;17 and that
when petitioners obligation to PNB was extinguished, they delivered the titles of the four properties to the bank.18
Ruling of the Regional Trial Court
On October 21, 2004, the RTC rendered a Decision19 declaring the real estate mortgage void for lack of sufficient consideration.
According to the RTC, the real estate mortgage lacks consideration because the loan contract was not perfected due to the failure of
the bank to deliver the full 3 million to petitioners.20 The RTC also found the bank guilty of fraud and bad faith, thereby ordering it to
pay petitioners moral and exemplary damages, and attorneys fees. The RTC ruled:
Furthermore, it appears that the defendant unilaterally changed the term and condition of their loan contract by releasing only P1M of
the P3M approved loan. The defendant, in so doing, violated their principal contract of loan in bad faith, and should be held liable
therefor.
Likewise, the defendant bank acted in bad faith when it made it appear that the mortgage was executed by the plaintiffs on June 16,
1997, when the document was acknowledged before Atty. German Balot, more so, when it made it appear that the mortgage was
registered with the Register of Deeds allegedly on the same date, when in truth and in fact, the plaintiffs executed said mortgage
sometime [in] March, 1997, obviously much earlier than June 16, 1997; for, if indeed the mortgage was executed on said date, June
16, 1997, it should have been written on the mortgage contract itself. On the contrary, the date and place of execution [were left
blank]. Amazingly, defendant claims that it was the plaintiffs who [had the] mortgage notarized by Atty. Balot; such claim however is
contrary or against its own interest, because, the defendant should be the most interested party in the genuineness and due
execution of material important papers and documents such as the mortgage executed in its favor to ensure the protection of its
nterest embodied in said documents, and the act of leaving the notarization of such a very important document as a mortgage
executed in its favor is contrary to human nature and experience, more so against its interest; hence, the claim is untrue.
Moreover, the defendant also appears to have been motivated by bad faith amounting to fraud when it was able to register the
mortgage with the Register of Deeds at the time when the collateral certificates of titles were still in the custody and possession of
another mortgagee bank (PNB) due also to an existing/subsisting mortgage covering the same. Definitely, the defendant resorted to
some machinations or fraudulent means in registering the contract of mortgage with the Register of Deeds. This should not be
countenanced.
Thus, on account of defendants bad faith, plaintiffs suffered mental anguish, serious anxiety, besmirched reputation, wounded
feelings, moral shock and social humiliation, which entitle them to the award of moral damages, more so, that it was shown that
defendants bad faith was the proximate cause of these damages plaintiffs suffered.
xxxx
WHEREFORE, with all the foregoing considerations, judgment is hereby rendered in favor of the plaintiffs and against the defendant
as follows:
1. DECLARING as null and void the undated real estate mortgage between the plaintiffs and the defendant,
appearing as Doc. No. 553; Page No. 29; Book No. 28; Series of 1997; (Exhibits "B" for the plaintiffs, Exhibit "1" for
the defendant);
2. Likewise DECLARING as null and void the Sheriffs Foreclosure and the Certificate of Sale, dated October 7, 1998
(Exhibit "F" to "F-3");
3. ORDERING the defendant to pay the plaintiffs the following damages:
a) Php 1,000,000.00, moral damages;
b) Php 500,000.00, exemplary damages; and
c) Php 50,000.00, Attorneys fee; and
4. ORDERING the defendant to pay the cost of litigation, including plaintiffs counsels court appearance at
Php1,500.00 each.
SO ORDERED.21
Ruling of the Court of Appeals
On appeal, the CA reversed the ruling of the RTC. The CA said that based on the promissory note and the real estate mortgage
contract, the properties covered by TCT Nos. T-225131 and T-225132 were mortgaged to secure the loan in the amount of 1
million, and not the 3 million loan applied by petitioners.22 As to the venue of the auction sale, the CA declared that since the
properties subject of the case are in Santiago City, the holding of the auction sale in Santiago City was proper23 pursuant to Sections
124 and 225 of Act No. 3135.26 The CA likewise found no fraud or bad faith on the part of the bank to warrant the award of damages by
the RTC, thus:
The List of Properties Mortgaged printed at the dorsal side of the real estate mortgage contract particularly includes the subject
parcels of land covered by TCT No. T-225132 and TCT No. T-225131. Below the enumeration, the signatures of [petitioners] clearly
appear. The document was notarized before Notary Public German M. Balot. We therefore find no cogent reason why the validity of
the real estate mortgage covering the two subject properties should not be sustained.
Settled is the rule in our jurisdiction that a notarized document has in its favor the presumption of regularity, and to overcome the
same, there must be evidence that is clear, convincing and more than merely preponderant; otherwise the document should be
upheld. Clearly, the positive presumption of the due execution of the subject real estate mortgage outweighs [petitioners] bare and
unsubstantiated denial that the parcels of land covered by TCT Nos. T-225132 and T-225131 were among those intended to secure
the loan of One Million Pesos. Their imputation of fraud among the officials of [the bank] is weak and unpersuasive. x x x
xxxx
We also note why despite the alleged non-approval of [petitioners] application for additional loan, the owners copy of TCT Nos. T-
225131 and T-225132 remained in the possession of [the bank]. [Petitioners] claim that they were still hoping to obtain an additional
oan in the future appears to this court as a weak explanation. The continued possession by the bank of the certificates of title merely
supports the banks position that the parcels of land covered by these titles were actually mortgaged to secure the payment of the
One Million Peso loan.
xxxx
WHEREFORE, in view of the foregoing, the assailed decision of the Regional Trial Court, Branch 35 of Santiago City in Civil Case
No. 35-2779 is hereby ANNULLED and SET ASIDE and a new one entered:
(1) DISMISSING the complaint filed by the plaintiffs-appellees against the defendants-appellants; and
(2) Declaring VALID the questioned real estate mortgage and certificate of sale.
SO ORDERED.27
On February 1, 2006, petitioners moved for reconsideration but the CA denied the same in its Resolution dated April 12, 2006.28
Issues
Hence, the present recourse, where petitioners allege that:
(A)
THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN ANNULLING OR REVERSING
THE FINDINGS OF BRANCH 35, REGIONAL TRIAL COURT OF SANTIAGO CITY THEREBY IN EFFECT
DISMISSING THE COMPLAINT FILED BY THE PETITIONERS AGAINST RESPONDENTS SOLIDBANK
CORPORATION AND SHERIFF MAYO DELA CRUZ.
(B)
THE COURT OF APPEALS ERRED IN DECLARING VALID THE REAL ESTATE MORTGAGE EXECUTED
BETWEEN THE PETITIONERS AND RESPONDENT SOLIDBANK CORPORATION AND IN SUSTAINING THE
VALIDITY OF THE CERTIFICATE OF SALE ISSUED BY RESPONDENT SHERIFF MAYO DELA CRUZ.
(C)
THE COURT OF APPEALS ERRED IN MISAPPRECIATING THE
FINDINGS OF FACTS OF BRANCH 35, REGIONAL TRIAL COURT OF SANTIAGO CITY.29
Simply put, the core issue in this case is the validity of the real estate mortgage and the auction sale.
Petitioners Arguments
Petitioners echo the ruling of the RTC that the real estate mortgage and certificate of sale are void because the bank failed to deliver
the full amount of the loan. They likewise impute bad faith and fraud on the part of the bank in including TCT Nos. T-225131 and T-
225132 in the list of properties mortgaged. They insist that they did not sign the dorsal portion of the real estate mortgage contract,
which contains the list of properties mortgaged, because at that time the dorsal portion was still blank;30 and that TCT Nos. T-225131
and T-225132 were not intended to be included in the list of mortgaged properties because these titles were still mortgaged with the
PNB at the time the real estate mortgage subject of this case was executed.31 Moreover, they claim that they delivered the titles of
these properties to the bank as additional collateral for their additional loans, and not for the 1 million loan.32
Respondent banks Arguments
The bank denies petitioners allegations of fraud and bad faith and argues that the real estate mortgage which was properly
notarized enjoys the presumption of regularity.33 It maintains that TCT Nos. T-225131 and T-225132 were mortgaged as additional
collateral for the 1 million loan.34
Our Ruling
The petition is bereft of merit.

The loan contract was perfected.
Under Article 193435 of the Civil Code, a loan contract is perfected only upon the delivery of the object of the contract.
In this case, although petitioners applied for a 3 million loan, only the amount of 1 million was approved by the bank because
petitioners became collaterally deficient when they failed to purchase TCT No. T-227331 which had an appraised value of
1,944,000.00.36 Hence, on March 17, 1997, only the amount of 1 million was released by the bank to petitioners.37
Upon receipt of the approved loan on March 17, 1997, petitioners executed a promissory note for the amount of 1 million.38 As
security for the 1 million loan, petitioners on the same day executed in favor of the bank a real estate mortgage over the properties
covered by TCT Nos. T-237695, T-237696, T-237698, T-143683, T-143729, T-225131 and T-225132. Clearly, contrary to the
findings of the RTC, the loan contract was perfected on March 17, 1997 when petitioners received the 1 million loan, which was the
object of both the promissory note and the real estate mortgage executed by petitioners in favor of the bank.
Claims of fraud and bad faith are unsubstantiated.
Petitioners claim that there was fraud and bad faith on the part of the bank in the execution and notarization of the real estate
mortgage contract.
We do not agree.
There is nothing on the face of the real estate mortgage contract to arouse any suspicion of insertion or forgery. Below the list of
properties mortgaged are the signatures of petitioners.39 Except for the bare denials of petitioner, no other evidence was presented to
show that the signatures appearing on the dorsal portion of the real estate mortgage contract are forgeries.
Likewise flawed is petitioners reasoning that TCT Nos. T-225131 and T-225132 could not have been included in the list of properties
mortgaged as these were still mortgaged with the PNB at that time. Under our laws, a mortgagor is allowed to take a second or
subsequent mortgage on a property already mortgaged, subject to the prior rights of the previous mortgages.40 1avvphi1
As to the RTCs finding that "the x x x bank acted in bad faith when it made it appear that the mortgage was executed by the
[petitioners] on June 16, 1997, when the document was acknowledged before Atty. German, x x x when in truth and in fact, the
[petitioners] executed said mortgage sometime in March, 1997 x x x," we find the same without basis. A careful perusal of the real
estate mortgage contract would show that the bank did not make it appear that the real estate mortgage was executed on June 16,
1997, the same day that it was notarized, as the date of execution of the real estate mortgage contract was left blank.41 And the mere
fact that the date of execution was left blank does not prove bad faith. Besides, any irregularity in the notarization or even the lack of
notarization does not affect the validity of the document. Absent any clear and convincing proof to the contrary, a notarized
document enjoys the presumption of regularity and is conclusive as to the truthfulness of its contents.42
All told, we find no error on the part of the CA in sustaining the validity of the real estate mortgage as well as the certificate of sale.
WHEREFORE, the petition is hereby DENIED. The assailed January 11, 2006 Decision of the Court of Appeals and its April 12,
2006 Resolution in CA-G.R. CV No. 84236 are hereby AFFIRMED.
SO ORDERED.
MARIANO C. DEL CASTILLO

Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO LUCAS P. BERSAMIN

MARTIN S. VILLARAMA, JR.
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
Footnotes
* In view of the demise of petitioner Brigada Palada, the title of the instant case should have been "Wilfredo Palada
and Heirs of Brigada Palada" (See Transcript of Stenographic Notes [TSN] dated September 9, 2003, pp. 2-3).
1 Cathay Pacific Airways, Ltd. v. Sps. Vazquez, 447 Phil. 306, 321 (2003).
2 Rollo, pp. 9-21.
3Id. at 23-33; penned by Associate Justice Rodrigo V. Cosico and concurred in by Associate Justices Regalado E.
Maambong and Lucenito N. Tagle.
4 CA rollo, pp. 84-85.
5 Rollo, p. 40.
6Records, p. 7. Although the promissory note is dated June 16, 1997, both parties admit that the promissory note
was executed on March 17, 1997 (Complaint, id. at 2 and Answer, id. at 23).
7 Id. at 8.
8 Rollo, pp. 23-24; TSN dated July 17, 2000, pp. 6-9, Direct Examination of Wilfredo Palada.
9 Id. at 24.
10 Records, pp. 1-6.
11 Id. at 11-14.
12 Rollo, p. 34.
13 Indicated as T-225152 and T-221512 in the Complaint; see records, p. 2.
14 Id. at 3-4.
15 Id. at 23-26.
16 Id. at 24.
17 Id.
18 Id.
19 Rollo, pp. 34-46; penned by Judge Efren M. Cacatian.
20 Id. at 43.
21 Id. at 44-46.
22 Id. at 29-30.
23 Id. at 31.
24SECTION 1. When a sale is made under a special power inserted in or attached to any real-estate mortgage
hereafter made as security for the payment of money or the fulfillment of any other obligation, the provisions of the
following sections shall govern as to the manner in which the sale and redemption shall be effected, whether or not
provision for the same is made in the power.
25SECTION 2. Said sale cannot be made legally outside of the province in which the property sold is situated; and in
case the place within said province in which the sale is to be made is the subject of stipulation, such sale shall be
made in said place or in the municipal building of the municipality in which the property or part thereof is situated.
An Act To Regulate The Sale Of Property Under Special powers Inserted In Or Annexed To Real-Estate
26
Mortgages.
27 Rollo, pp. 30-32.
28 Id. at 10-11.
29 Id. at 14-15.
30 Id. at 110.
31 Id.
32 Id. at 114.
33 Id. at unpaged-129 and 131-132.

34 Id. at 127.
35Art. 1934. An accepted promise to deliver something by way of commodatum or simple loan is binding upon the
parties, but the commodatum or simple loan itself shall not be perfected until the delivery of the object of the contract.
36TSN dated July 17, 2000, pp. 21-22, Direct Examination of Wilfredo Palada; TSN dated July 31, 2000, pp. 7 and
25-26, Cross-examination and Re-direct examination of Wilfredo Palada; TSN dated August 25, 2003, p. 22, Direct
Examination of Julieta Ayala.
37 TSN dated July 17, 2000, p. 5; Direct Examination of Wilfredo Palada.
38 Id. at 5-7.
39
Rollo, p. 30.
40 Cinco v. Court of Appeals, G.R. No. 151903, October 9, 2009, 603 SCRA 108,118.
41 Records, p. 8.
42 Ocampo v. Land Bank of the Philippines, G.R. No. 164968, July 3, 2009, 591 SCRA 562, 571-572.
The Lawphil Project - Arellano Law Foundation


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 188395 November 20, 2013
HEIRS OF THE LATE FELIX M. BUCTON, namely: NICANORA G. BUCTON, ERLINDA BUCTON-EBLAMO, AGNES BUCTON-
LUGOD, WILMA BUCTON-YRAY and DON G. BUCTON, Petitioners,
vs.
SPOUSES GONZALO and TRINIDAD GO, Respondents.
DECISION
PEREZ, J.:
This is a Petition for Review on Certiorari1 filed under Rule 45 of the Revised Rules of Court, assailing the 27 May 2009
Decision2 rendered by the Special Twenty-First (21st) Division of the Court of Appeals in CA-G.R. CV No. 00888-MIN. In its assailed
decision, the appellate court affirmed the Judgment3 of the Regional Trial Court (RTC) of Misamis Oriental, Branch 17, which
upheld the title of the respondents Spouses Gonzalo and Trinidad Go (Spouses Go) over the subject property.
The Facts
The suit concerns a parcel of land with an area of 6,407 square meters situated in Lapasan, Cagayan de Oro City and presently
registered under Transfer Certificate of Title (TCT) No. T-342104 by the Registry of Deeds of Cagayan de Oro City in the names of
the Spouses Go. The said property was originally registered in the name of Felix M. Bucton (Felix), married to Nicanora Gabar
(Nicanora) and covered by TCT No. T-9830.5
Sometime in March 1981, Felix received a phone call from Gonzalo Go (Gonzalo) informing him that he has bought the subject
property thru a certain Benjamin Belisario (Belisario) who represented himself as the attorney-in-fact of Felix. Surprised to learn
about the transaction, Felix made an inquiry whereby he learned that the owners duplicate certificate of title of the subject property
was lost while in the possession of his daughter, Agnes Bucton-Lugod (Agnes). By an unfortunate turn of events, the said certificate
of title fell into the hands of Belisario, Josefa Pacardo (Pacardo) and Salome Cabili (Cabili), who allegedly conspired with each other
to unlawfully deprive Felix of his ownership of the above-mentioned property.
As shown in the annotation at the back of the title, the Spouses Bucton purportedly authorized Belisario to sell the subject property to
third persons, as evidenced by a Special Power of Attorney (SPA)6 allegedly signed by the Spouses Bucton on 27 February 1981.
On the strength of the said SPA, Belisario, on 2 March 1981, executed a Deed of Absolute Sale7 in favor of the Spouses Go.
Consequently, the Registry of Deeds of Cagayan de Oro City cancelled TCT No. T-9830 in the name of Felix and issued a new one
under TCT No. T-34210 in the names of the Spouses Go.
Meanwhile, Felix passed away leaving Nicanora, Erlinda Bucton-Eblamo, Agnes, Wilma Bucton-Yray and Don Bucton (Heirs of
Felix), as his intestate heirs.
Claiming that the signatures of the Spouses Bucton on the SPA were forged, the Heirs of Felix, on 19 February 1996, filed against
the Spouses Go a complaint for Annulment of the SPA, Deed of Absolute Sale and TCT No. T-34210, Recovery of Ownership and
Possession, Damages, with Prayer for Writ of Preliminary Injunction or Temporary Restraining Order before the RTC of Misamis
Oriental, Branch 17.8 In their Complaint docketed as Civil Case No. 96-093, the Heirs of Felix mainly alleged that since the SPA was
spurious, no valid title was conveyed to the Spouses Go.9 Such being the case, the Heirs of Felix argued that the cancellation of the
certificate of title in the names of the Spouses Go and the reconveyance of the ownership and possession of the disputed property,
are warranted in the instant case.10
In their Answer,11 the Spouses Go refuted the allegations in the complaint by asserting that they are buyers in good faith and for
value, and that they are in actual possession of the property from the time it was purchased in 1981. In insisting that their title is valid
and binding, the Spouses Go argued that under the Torrens system, a person dealing with the registered land may safely rely on the
correctness of the certificate of title without the need of further inquiry. For this reason, they posited that the Court cannot disregard
the right of an innocent third person who relies on the correctness of the certificate of title and they are entitled to the protection of
the law.
After the pre-trial conference was terminated without the parties having reached at an amicable settlement, the RTC went on to
receive testimonial and documentary evidence adduced by the parties in support of their respective positions.
On 25 June 2005, the RTC issued a Judgment,12 finding that the complaint filed by the Heirs of Felix is already barred by laches and
prescription. The court a quo observed that from the time the alleged fraudulent transaction was discovered in 1981 up to 1996 the
complainants failed to take any legal step to assail the title of the Spouses Go. The trial court thus disposed in the following wise:
WHEREFORE, premises considered, the court finds for the defendants. Accordingly, the case is hereby dismissed as it is hereby
dismissed on grounds that plaintiffs were barred by laches and prescription. With costs against plaintiffs.13
Elevated by the Heirs of Felix on appeal before the Court of Appeals, under CA-G.R. CV No. 00888-MIN, the foregoing decision was
affirmed by the appellate court in its 27 May 2009 Decision.14 In upholding the dismissal of the complaint, the Court of Appeals found
that the evidence adduced by the Heirs of Felix failed to preponderantly establish that the questioned SPA was a forgery.15 The
appellate court further declared that the Spouses Go were innocent purchasers for value who acquired the property without any
knowledge that the right of Belisario as attorney-in-fact was merely simulated.16 It determined that the Spouses Go can rely in good
faith on the face of the certificate of title, and in the absence of any sign that might arouse suspicion, the buyers are under no
obligation to undertake further investigation.17 The dispositive portion of the assailed Court of Appeals Decision reads:
WHEREFORE, in view of all the foregoing, the instant appeal is hereby DISMISSED and the assailed June 25, 2005 Decision of the
Regional Trial Court (RTC) of Misamis Oriental, Branch 17, 10th Judicial Region, Cagayan de Oro City, in Civil Case No. 96-093, is
hereby AFFIRMED in toto.18
The Heirs of Felix are now before this Court assailing the above-quoted Court of Appeals Decision and raising the following issues:
The Issues
I. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN RULING THAT THE
SIGNATURES OF THE SPOUSES BUCTON IN THE SPA WERE NOT FORGED;
II. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN FINDING THAT THE
SPOUSES GO ARE INNOCENT PURCHASERS FOR VALUE; AND
III. WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT HELD THAT
ACTION OF THE HEIRS OF FELIX ARE ALREADY BARRED BY LACHES AND PRESCRIPTION. 19
The Courts Ruling
We find the petition impressed with merit.20
As a rule, forgery cannot be presumed and must be proved by clear, positive and convincing evidence and the burden of proof lies
on the party alleging forgery. The best evidence of a forged signature in the instrument is the instrument itself reflecting the alleged
forged signature. The fact of forgery can only be established by comparison between the alleged forged signature and the authentic
and genuine signature of the person whose signature is theorized upon to have been forged.21
To prove forgery, the Heirs of Felix offered the testimony of an expert witness, Eliodoro Constantino (Constantino) of the National
Bureau of Investigation who testified that significant differences existed between the signatures of Felix on the standard documents
from the one found in the SPA of Belisario. His testimony, however, was disregarded both by the RTC and the Court of Appeals
which upheld the validity of the SPA on the ground that it enjoys the presumption of regularity of a public document.
While it is true that a notarized document carries the evidentiary weight conferred upon it with respect to its due execution, and has
n its favor the presumption of regularity, this presumption, however, is not absolute.22 It may be rebutted by clear and convincing
evidence to the contrary.23 The testimony of Constantino and Nicanora, had it been properly appreciated, is sufficient to overcome the
presumption of regularity attached to public documents and to meet the stringent requirements to prove forgery.
Constantino pointed out in open court the manifest disparity between the strokes of the letters of Felixs purported signature on the
assailed SPA and the latters genuine signature which led him to conclude that the standard signature and the one appearing in the
SPA were not written by one and the same person.24 To further fortify their claim, Nicanora herself took the witness stand and
testified that she is familiar with her husbands signature for they had been married for more than 50 years. She denied having
signed her name on the SPA and averred that the signature appearing above the name of Felix was not that of her husband.25
Evidently, the foregoing testimonial evidence adduced by the Heirs of Felix are proof opposite to that which is required to show the
genuineness of a handwriting as set forth by the Rules of Court:
Rule 132. Sec. 22. How genuineness of handwriting proved. The handwriting of a person may be proved by any witness who
believes it to be the handwriting of such person because he has seen the person write, or has seen writing purporting to be his upon
which the witness has acted or been charged, or has thus acquired knowledge of the handwriting of such person. Evidence
respecting the handwriting may also be given by a comparison, made by the witness or the court, with writings admitted or treated as
genuine by the party against whom the evidence is offered, or proved to be genuine to the satisfaction of the judge.26
In upholding the validity of the SPA, the Court of Appeals brushed aside the foregoing testimonial evidence of the expert witness and
made an independent examination of the questioned signatures, and based thereon, ruled that there is no forgery. The appellate
court attributed the variations to the passage of time and the persons increase in age and dismissed the findings of the expert
witness because it failed to comply with the rules set forth in jurisprudence that the standard should embrace the time of origin of the
document, so that one part comes from the time before the origin and one part from the time after the origin.27 We are not unmindful
of the principle that in order to bring about an accurate comparison and analysis, the standard of comparison must be as close as
possible in point of time to the suspected signature.28 However, when the dissimilarity between the genuine and false specimens of
writing is visible to the naked eye and would not ordinarily escape notice or detection from an unpracticed observer, resort to
technical rules is no longer necessary and the instrument may be stricken off for being spurious. More so when, as in this case, the
forgery was testified to and thus established by evidence other than the writing itself. When so established and is conspicuously
evident from its appearance, the opinion of handwriting experts on the forged document is no longer necessary.29
Far more important from the testimony of the witnesses is the fact that in 1984, Felix filed a criminal case for falsification of public
document against Belisario, Pacardo and Cabili docketed as Criminal Case No. 4679 before the RTC of Misamis Oriental, Branch
22.30 The case was, however, archived after the accused jumped bail and could not be arrested.31
Indubitably, the foregoing testimonial and circumstantial evidence cast doubt on the integrity, genuineness, and veracity on the
questioned SPA and impels this Court to tilt the scale in favor of the Heirs of Felix. Although there is no direct evidence to prove
forgery, preponderance of evidence indubitably favors the Heirs of Felix. Preponderance of evidence is the weight, credit, and value
of the aggregate evidence on either side and is usually considered to be synonymous with the term "greater weight of the evidence"
or "greater weight of the credible evidence."32Preponderance of evidence is a phrase which, in the last analysis, means probability of
the truth. It is evidence which is more convincing to the court as worthier of belief than that which is offered in opposition thereto.33
We now proceed to determine whether the Spouses Go are innocent purchasers for value. It has been consistently held that a
1wphi 1
forged deed can become a source of a valid title when the buyers are in good faith.34
An innocent purchaser for value is one who buys the property of another without notice that some other person has a right to or
nterest in it, and who pays a full and fair price at the time of the purchase or before receiving any notice of another persons
claim.35 The burden of proving the status of a purchaser in good faith and for value lies upon one who asserts that status.36 This onus
probandi cannot be discharged by mere invocation of the ordinary presumption of good faith.37
As a general rule, every person dealing with registered land may safely rely on the correctness of the certificate of title issued
therefore and the law will no way oblige him to go beyond the certificate to determine the condition of the property.38 However, this
principle admits exceptions:
x x x (a) person dealing with registered land has a right to rely on the Torrens certificate of title and to dispense with the need of
nquiring further except when the party has actual knowledge of facts and circumstances that would impel a reasonably cautious man
to make such inquiry or when the purchaser has knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce
a reasonably prudent man to inquire into the status of the title of the property in litigation. The presence of anything which excites or
arouses suspicion should then prompt the vendee to look beyond the certificate and investigate the title of the vendor appearing on
the face of the certificate. One who falls within the exception can neither be denominated as innocent purchaser for value nor a
purchaser in good faith; and hence does not merit the protection of the law.39
While this Court protects the right of the innocent purchaser for value and does not require him to look beyond the certificate of title,
this protection is not extended to a purchaser who is not dealing with the registered owner of the land. In case the buyer does not
deal with the registered owner of the real property, the law requires that a higher degree of prudence be exercised by the purchaser.
As succinctly pointed out in San Pedro v. Ong:40
The Court has stressed time and again that every person dealing with an agent is put upon inquiry, and must discover upon his peril
the authority of the agent, and this is especially true where the act of the agent is of unusual nature. If a person makes no inquiry, he
s chargeable with knowledge of the agents authority, and his ignorance of that authority will not be any excuse. (Emphasis and
underscoring supplied).
An assiduous examination of the records of this case pointed to the utter lack of good faith of the Spouses Go. There is no question
that the Spouses Go dealt not with the registered owner of the property, but with a certain Belisario, who represented himself as an
agent of Felix. An ordinary prudent man in this situation would have first inquired with the registered owner if he is indeed selling his
property and if he authorized the purported agent to negotiate and to sell the said property on his behalf. It is inconceivable for the
Spouses Go to have been without any opportunity to contact Felix before the transaction, given that the Spouses Go personally
knew the Buctons for they are residents of the same locality and both Felix and Gonzalo were members of the Knights of Columbus.
Instead, the Spouses Go entered into a sale contract with an agent according full faith and credence to the SPA he was presented
with thereby exposing the evident dearth of merit in their claim that they exercised prudence in entering into the sale in question. It
was only after the sale was consummated that Gonzalo called Felix to inform him that he already bought the subject property from
Belisario who was surprised to learn about the transaction. In an effort to extricate themselves from this quandary, the Spouses Go
claimed that they authorized their lawyer to inspect the title of the property including the property itself for any possible burdens.
Such assertion could have saved the day for the Spouses Go if they were dealing directly with the registered owner and not with a
mere agent. As buyers of the property dealing with an agent, the Spouses Go are chargeable with knowledge of agents authority or
the lack thereof, and their failure to ascertain the genuineness and authenticity of the latters authority do not entitle them to invoke
the protection the law accords to purchasers in good faith and for value. They cannot close their eyes to facts that should put a
reasonable man on his guard and still claim that he acted in good faith. Certainly, we cannot ascribe good faith to those who have
not shown any diligence in protecting their rights.41
Likewise worthy of credence is the claim of the Heirs of Felix that the instant case is not barred by laches or prescription. As held in
Titong v. Court of Appeals,42 ownership and real rights over real property are acquired by ordinary prescription through possession of
ten years,43 provided that the occupant is in good faith and with just title, viz:
x x x [A] prescriptive title to real estate is not acquired by mere possession thereof under claim of ownership for a period of ten years
unless such possession was acquired con justo tilulo y buena fe (with color of title and good faith). The good faith of the possessor
consists in the reasonable belief that the person from whom he received the thing was the owner thereof, and could transmit his
ownership. For purposes of prescription, there is just title when the adverse claimant came into possession of the property through
one of the modes recognized by law for the acquisition of ownership or other real rights but the grantor was not the owner or could
not transmit any right.44
As pointed out earlier the Spouses Go miserably failed to meet the requirements of good faith and just title thus the ten-year
prescriptive period is a defense unavailable to them. It must be stressed that possession by virtue of a spurious title cannot be
considered constructive possession for the purpose of reckoning the ten-year prescriptive period. The conclusion of the appellate
court that prescription has already set in is erroneously premised on the absence of forgery and the consequent validity of the deed
of sale. And extraordinary acquisitive prescription cannot similarly vest ownership over the property upon the Spouses Go since the
aw requires 30 years of uninterrupted adverse possession without need of title or of good faith before real rights over immovable
prescribes.45 The Spouses Go purportedly took possession of the subject property since March 1981 but such possession was
effectively interrupted with the filing of the instant case before the RTC on 19 February 1996.46 This period is 15 years short of the
thirty-year requirement mandated by Article 1137.47
WHEREFORE, premises considered the petition is GRANTED. The assailed Decision of the Court of Appeals is hereby REVERSED
and SET ASIDE.
SO ORDERED.
JOSE PORTUGAL PEREZ

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION MARIANO C. DEL CASTILLO

ESTELA M. PERLAS-BERNABE
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson s Attestation, it is hereby certified that the
conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the
Courts Division.
MARIA LOURDES P. A. SERENO

Chief Justice
Footnotes
1
Rollo, pp. 10-41.
2
Penned by Associate Justice Jane Aurora C. Lantion with Associate Justices Edgardo A. Camello and Michael P.
Elbinias, concurring. Id. at 43-70.
3
Presided by Presiding Judge Florencia D. Sealana-Abbu. Records, pp. 578-586.
4
Id. at 19.
5
Id. at 15-16.
6
Id. at 17.
7
Id. at 18.
8
Id. at 2-12.
9
Id.
10
Id.
11
Id. at 33-36.
12
Id. at 578-586.
13
Id. at 586.
14
Rollo, pp. 43-70.
15
Id.
16
Id.
17
Id.
18
Id. at 69.
19
Id. at 13-14.
20
Factual findings of trial courts, especially when affirmed by the Court of Appeals, as in this case, are binding on the
Supreme Court. Indeed, the review of such findings is not a function that this Court normally undertakes. It should be
stressed that under the 1997 Rules of Civil Procedure, as amended, only questions of law may be raised in a petition
for review before this Court. However, this Rule is not absolute; it admits of exceptions, such as (1) when the findings
of a trial court are grounded entirely on speculation, surmises or conjectures; (2) when a lower court's inference from
its factual findings is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion in the
appreciation of facts; (4) when the findings of the appellate court go beyond the issues of the case, run contrary to
the admissions of the parties to the case, or fail to notice certain relevant facts which if properly considered will
justify a different conclusion; (5) when there is a misappreciation of facts; (6) when the findings of fact are
conclusions without mention of the specific evidence on which they are based, are premised on the absence of
evidence, or are contradicted by evidence on record. See Philippine Rabbit Bus Lines, Inc. v. Macalinao, 491 Phil.
249, 255-256 (2005).
21
Citibank, N.A. v. Sabeniano, 535 Phil. 384, 471-472 (2006).
22
Eulogio v. Apeles, G.R. No. 167884, 20 January 2009, 576 SCRA 561, 571.
23
Id.
24
TSN, 20 June 2000, pp. 2-35.
25
TSN, 31 August 2000, pp. 2-19.
26
Sanson v. Court of Appeals, 449 Phil. 343, 355 (2003).
27
Cogtong v. Kyoritsu International, Inc., 555 Phil. 302, 307 (2007).
28
Id.
29
Gamido v. Court of Appeals, 321 Phil. 463, 472-473 (1995).
30
Records, p. 579.
31
Id.
32
Id.
33
Id.
34
Rufloe v. Burgos, G.R. No. 143573, 30 January 2009, 577 SCRA 264, 273.
35
Id.
36
Id.
37
Id.
38
Cayana v. Court of Appeals, 469 Phil. 830, 846 (2004).
39
Id.
40
G.R. No. 177598, 17 October 2008, 569 SCRA 767, 785.
41
Rufloe v. Burgos, supra note 34 at 275-276.
42
350 Phil. 544 (1998).
43
Civil Code, Art. 1134. Ownership and other real rights over immovable property are acquired by ordinary
prescription through possession of ten years.
44
Titong v. Court of Appeals, supra note 42 at 556.
45
Id. at 556-557.
46
Records pp. 2-12.
Civil Code Art. 1137. Ownership and other real rights over immovables also prescribe through uninterrupted
47
adverse possession thereof for thirty years without need of title or of good faith.


SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-40145 July 29, 1992
SEVERO SALES, ESPERANZA SALES BERMUDEZ, petitioners,

vs.
COURT OF APPEALS and LEONILO GONZALES, respondents.
ROMERO, J.:
In this petition for review on certiorari, petitioners seek to annul and set aside the decision of the Court of Appeals affirming that of
the then Court of First Instance of Tarlac, Branch III which upheld the validity of the deed of sale of a parcel of land executed by
petitioner Severo Sales in favor of respondent Leonilo Gonzales.
Severo Sales owned an unregistered parcel of land in Bugallon, Pangasinan. Covered by Tax Declaration No. 5861, the property
had an area of 5,733 square meters more or less. 1 On July 4, 1955, Sales mortgaged said property, together with two other parcels
of land, to Faustina P. Agpoon and Jose Agpoon to secure the payment of a loan in the amount of P2,240.00 payable on or about
July 4, 1956. 2 On October 30, 1957, Tax Declaration No. 5861 was canceled and in lieu hereof, Tax Declaration No. 13647 was
ssued to Sales but the area of the property was stated therein as 5,229 square meters more or less. 3
More than a year later, or on December 24, 1958, Sales, with the consent of his wife, Margarita Ferrer, donated nine hundred (900)
square meters of the same property in favor of their daughter, petitioner Esperanza Sales Bermudez. 4 The duly notarized deed of
donation was presented to the Assessor's Office on the day of its execution. Hence, Tax Declaration No. 13647 was replaced by two
tax declarations: Tax Declaration No. 13875 5 in the name of Esperanza Sales Bermudez for the 900-square-meter lot donated to her
and Tax Declaration No. 13874 6 in the name of Sales covering the remaining portion or 4,339 square meters.
As a consequence of a case filed by Faustina P. Agpoon against Sales in the Court of First Instance of Pangasinan, sometime in
January 1959, the mortgaged property of Sales was set for foreclosure. To prevent such foreclosure, Sales requested his friend,
Ernesto Gonzales, to pay his total indebtedness of P2,700 to the Agpoon spouses. 7Ernesto Gonzales acceded to the request and
asked Sales and his wife to sign a document transferring the mortgage to him. According to the Sales spouses, they were not given
a copy of said document. 8 Around a month later, Sales had the land covered by Tax Declaration No. 5861 surveyed by a private surveyor. 9
On February 3, 1959, a document entitled "Deed of Sale" between Severo Sales and Leonilo Gonzales was registered with the
Register of Deeds of Pangasinan. 10
In October 1968, Sales received a photostat copy of the deed of sale appearing to have been signed by him and his wife on January
29, 1959 before ex-officio Notary Public Arturo Malazo in San Manuel, Tarlac. The document stated that the Sales spouses had sold
the land described under Tax Declaration No. 5861 in consideration of the amount of P4,000 to Leonilo Gonzales, son of Ernesto
Gonzales.
In the Intestate Estate Proceedings of Ernesto Gonzales, (SP 42692) in the then Court of First Instance of Manila, the land in
question was claimed by respondent Leonilo Gonzales. Subsequently, upon submission of the Deed of Sale between Severo Sales
and Leonilo Gonzales, the questioned land was excluded therefrom. 11 Said parcel of land was declared by Leonilo Gonzales under
Tax Declaration No. 12483. 12
On November 7, 1968, Leonilo Gonzales filed an action for illegal detainer against Sales before the Municipal Court of
Bugallon. 13 Before the case could be tried, Sales and his daughter, Esperanza Sales Bermudez filed in the Court of First Instance of
Tarlac, Branch III a complaint for annulment of the deed of sale between Sales and Gonzales on the ground of fraud. Consequently,
the municipal court suspended the illegal detainer proceedings before it pending the outcome of the annulment case.
On October 27, 1969, the Court of First Instance 14 rendered a decision finding that the allegation of fraud was not supported by
convincing evidence. Its dispositive portion reads:
WHEREFORE, judgment is hereby rendered in favor of the defendant, and against the plaintiffs by:
1. Ordering the dismissal of the complaint;
2. Declaring that the defendant is the lawful owner of the land described in Exhibits "2" and "2-A" (same as
Exh. "H") and is, therefore, entitled to the possession thereof;
3. Ordering the plaintiffs, jointly and severally, to pay the defendant the sum of P2,000.00 by way of attorney's
fees; and
4. Ordering the plaintiffs, jointly and severally, to pay the costs.
SO ORDERED.
The lower court noted that while plaintiffs counsel claimed that Sales and his wife were illiterates, their signatures on each page of
the two-page deed of sale revealed "striking features" of intelligence. The court added:
Defendant's defense hinges on the fact that the Deed of Sale is valid, it having been properly executed and
notarized, and is therefore a public document, and carries weigh as provided for in Section 31, Rule 132 of
the Rules of Court. Defendant likewise proved that the money paid by his father, Ernesto Gonzales was his.
Arturo V. Malazo, the Notary Public ex-officio and Justice of the Peace, before whom the Deed of Sale was
executed, testified personally in Court and confirmed the genuineness and validity of the Deed of sale,
together with the signatures appearing therein, particularly those of the vendors Severo Sales and Margarita
Ferrer, and the witnesses thereto. The bare and naked assertions of the plaintiff Severo Sales and his wife,
could not offset the presumption of regularity as to the execution of the Deed of Sale, especially so, that the
ratifying officer was, and still is, a municipal judge. The contention of plaintiff Severo Sales that he was made
to sign the document hurriedly by the deceased Ernesto Gonzales does not deserve credence, considering
that he has affixed (sic) or signed the said Deed of Sale no less than three (3) times, together with his wife
and the other witnesses. Considering the interest of the plaintiff Severo Sales and his wife in this case, it
could not overthrow the testimony of the Notary Public ex-oficio Arturo V. Malazo. 15
Their motion for reconsideration having been denied. Sales and his daughter elevated the case to the Court of Appeals contending
that the lower court erred in upholding the validity of the deed of sale and in not considering the unschooled Sales as an illiterate
executor thereof. On December 19, 1974, the Court of Appeals16 affirmed the decision of the lower court but added that the
petitioners shall pay, jointly and severally, the amount of P1,000 as attorney's fees. Hence, the instant petition.
Petitioners primarily invoke Art. 1332 of the Civil Code which provides that when one of the parties to a contract is unable to read, "or
f the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show
that the terms thereof have been fully, explained to the former." Petitioners contend that respondent Gonzales failed to prove that the
contents of the deed of sale were ever explained to Sales, an illiterate. They also argue that granting that the deed of sale was valid,
the courts below failed to take into consideration the fact that the deed of donation was executed ahead of the deed of sale and must
not, therefore, be disregarded considering that with reference to unregistered lands, an earlier instrument prevails over a later one.
With regard to the issue of whether or not there was compliance with the provision of Art. 1332 of the Civil Code, before said article
may be invoked, it must be convincingly established that the disadvantaged party is unable to read or that the contract involved in
written in a language not understood by him. 17 It is the party invoking the benefits of Art. 1332 or Sales, who has the burden of
proving that he really is unable to read or that English, the language in which the deed of sale was written, is incomprehensible to
him. Only after sufficient proof of such facts may the burden or proving that the terms of the contract had been explained to the
disadvantaged party be shifted to the party enforcing the contract, who, in this instance, is Leonilo Gonzales.
The records of this case, however, show that although Sales did not go to school and knew only how to sign his name, 18 he and his
wife had previously entered into contracts written in English: first, when Sales mortgaged his property to Faustina P. Agpoon and
second, when he donated a portion of the property involved to his daughter, petitioner Esperanza Sales Bermudez. 19 The court
below also noted the fact that the signatures of the Sales spouses in the deed of sale showed the "striking features of the signatures
of intelligent" individuals. Coupled with this is the fact that in court, the Sales spouses themselves admitted that the signatures on the
deed of sale "looked like" their signatures. 20
But more revealing is the fact that the deed of sale itself, specifically the notarial acknowledgment thereof, contains a statement that
ts executors were known to the notary public to be the persons who executed the instrument; that they were "informed by me (notary
public) of the contents thereof" and that they acknowledged to the notary public that the instrument was freely and voluntarily
executed. 21 When he testified at the hearing, notary public Arturo Malazo stated, "I know Mr. Severo Sales and he appeared before
me when I notarized that document." Later, he added that "the document speaks for itself and the witnesses were there and those
were the persons present" (sic). 22 Thus, the stark denial of the petitioners, specially Sales, that he executed the deed of sale pales in
the face of Malazo's testimony because the testimony of the notary public enjoys greater credence than that of an ordinary witness. 23
The extrinsic validity of the deed of sale is not affected by the fact that while the property subject thereof is located in Bugallon,
Pangasinan where the vendors also resided, the document was executed in San Miguel, Tarlac. What is important under the Notarial
Law is that the notary public concerned has authority to acknowledge the document executed within his territorial jurisdiction. 24 A
notarial acknowledgment attaches full faith and credit to the document concerned. 25 It also vests upon the document the presumption
of regularity unless it is impugned by strong, complete and conclusive proof. 26 Such kind of proof has not been presented by the
petitioners.
While it seems improbable that Severo Sales sold the property described in Tax Declaration 5861 when in fact this had been
subsequently cancelled already by Tax Declaration 13875 in the name of Esperanza Sales Bermudez and by Tax Declaration No.
13874 in Severo Sales' name, one can hardly ascribe bad faith to respondent, for unlike a title registered under the Torrens System,
a tax declaration does not constitute constructive notice to the whole world. The issue of good faith or bad faith of a buyer is relevant
only where the subject of the sale is a registered land but not where the property is an unregistered land. 27
On the issue of whether or not the earlier deed of donation should "prevail" over the deed of sale or be "recognized", petitioner
nvokes Nisce v. Milo 28 and Estate of Mota v. Concepcion 29 which purportedly ruled that "with reference to unregistered lands, an
earlier instrument, be it a sale or
mortgage, prevails over a later one, and the registration of any one of them is immaterial." 30
The deed of donation explicitly provides that the land involved "has not been registered neither under Act 496 nor under the Spanish
Mortgage Law. The parties hereto have agreed to register this document under Act 3344." 31Such agreement had to be expressly
stipulated in the deed of donation 32 because under Act 3344, the Register of Deeds is not authorized to effect any registration unless
the parties have expressly agreed to register their transaction thereunder. A perusal of the records shows, however, that the deed of
donation was not registered at all. Besides, at the hearing, petitioners failed to show any evidence proving registration. Petitioners'
counsel even failed to secure a certification from the Register of Deeds of Pangasinan of its due registration as directed by the trial
udge.
Hence, while the deed of donation is valid between the donor and the donee thereby effectively transmitting the rights to said
property from Sales to his daughter, such deed, however, did not bind Leonilo Gonzales, a third party to the donation. This is
because non-registration of a deed of donation under Sec. 1 of Act No. 3344 does not bind other parties ignorant of a previous
transaction, notwithstanding the provision therein which petitioners invoke that "any registration made under this section shall be
understood to be without prejudice to a third party with a better right" Petitioner Esperanza Sales Bermudez may not be a considered
a third party 33 being the daughter of the vendor himself and the "better right" possessed by a third party refers to other titles which a
party might have acquired independently of the unregistered deed such as title by prescription. 34
We take note of the fact that while the Deed of Donation was not registered, the Deed of Sale was registered as evidenced by the
notation made by Cipriano Abenojar, Register of Deeds of Lingayen, Pangasinan 35 and the official receipt issued by the Registry of
Deeds. 36
Finally, we cannot be convinced that it is useless to register deeds or instruments affecting unregistered lands because the books of
registration provided under Section 194 of the Revised Administrative Code as Amended by Act 3344 continue to remain in force
even to this day. In fact, under Section 3 of Presidential Decree No. 1529, instruments dealing with unregistered lands can still be
registered. 37
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. Costs against the petitioners.
SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and Davide, Jr., JJ., concur.
Footnotes
1 Exh. A.
2 Exh. G.
3 Exh. B.
4 Exh. I.
5 Exh. J.
6 Exh. C.
7 TSN, August 6, 1969, p. 78.
8 Ibid., pp. 74-75.
9 Exh. F.
10 Exhibit 9, 9-A and 10.
11 Exhibit 11-E.
12 Exhibit 5.
13 TSN, May 13, 1969, p. 35.
14 Presided by Judge Jose C. de Guzman.
15 Record on Appeal, pp. 38-39.
16 Justice Ramon C. Fernandez, ponente, and Justices Ricardo C. Puno and Mariano Serrano, concurring.
17 Bunyi v. Reyes, L-28845, June 10, 1971, 39 SCRA 504.
18 TSN, March 19, 1969, pp. 35-36.
19 Exhibits G & J.
20 TSN, March 19, 1969, p. 40; August 6, 1969, p. 82.
21 Exh. 2-A.
22 TSN, July 14, 1969, pp. 9 & 11.
23 Carandang-Collantes v. Capinco, G.R. No. 55373, July 25, 1983, 123 SCRA 652.
24 Section 240, Article II Chapter 11 of the Revised, Administrative Code (Notarial Law).
25 Ramirez v. Ner, Adm. Matter No. 500, September 27, 1967, 21 SCRA 207.
26 Castillo v. Castillo, L-18289, January 22, 1980, 95 SCRA 40; Gonzales v. Court of Appeals, L-37453, May
25, 1979, 90 SCRA 185; Yturalde vi Azurin, L-22158, May 30, 1969, 28 SCRA 407; Chilianchin v. Coquinco,
84 Phil. 714 (1949).
27 See David v. Bandin, L-48322, 49712, 49716, 49687, April 8, 1987, 149 SCRA 140.
28 62 Phil. 976 (1936), unpublished.
29 56 Phil. 712 (1932).
30 Petition, p. 6; Rollo, p. 6.
31 Exh. I.
32 The same stipulation appears in the deed of sale.
33 "Third Party" includes a member of the household or a member of the family within the second degree of
consanguinity or affinity. (Moreno's Philippine Law Dictionary, 3rd Ed., p. 948.)
34 Lichauco v. Berrenguer, 39 Phil. 643 (1919).
35 Exhibit 9-A.
36 Exhibit 10.
37 Section 3 of P.D. 1529, entitled, "Amending the Codifying the Laws relative to Registration of Property and
other purposes."

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THIRD DIVISION

FELIPA DELFIN, GINA G.R. No. 146550

The antecedents are as follows:

Meanwhile, on 26 March 1965, an Extra-Judicial Partition and Absolute Deed of

To counter respondents arguments, petitioners alleged that respondents action was

evidencing the conveyance of the properties were personally and unilaterally

WHEREFORE, premises considered, the present appeal is hereby

(1) Annulling the Extra-Judicial Partition and Deed of Absolute Sale

(3) Ordering plaintiffs-appellants, jointly and severally, to pay

Costs against defendants-appellees.

When ones property is registered in anothers name without the formers

A contract or conduct apparently honest and lawful must be treated as such

Contrary to the appellate courts illation, respondents have not established

Considering that respondents failed to establish the existence of fraud in the

Documents consisting of entries in public records made in the performance

The documents presented by respondents were mere certifications and not

More importantly, the very exhibits of respondents dispel the presumption of

Under the circumstances, therefore, respondents were unable to overthrow the

In effect, contrary to the testimony of respondents witness Myrna Degala-Distura

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals

(On Official Leave)

ADELAIDA MENESES G.R. No. 172196

This is a petition for review on certiorari[1] of the Court of Appeals Decision

On June 8, 1988, plaintiff Rosario G. Venturozo, respondent herein, filed a

In her Answer,[5] defendant Adelaida Meneses stated that plaintiff is the

WHEREFORE, judgment is hereby rendered:

2) Declaring the defendant Adelaida Meneses as the owner of the property in

3) Ordering the plaintiff Rosario G. Venturozo to execute a Deed of

4) Ordering the plaintiff to pay to the defendant P10,000.00 as damages;

On October 27, 2005, the Court of Appeals rendered a Decision reversing

Q. I am showing to you Exhibit 6 and Exhibit A for the plaintiff a Deed of

According to the Court of Appeals, such admission is binding on her, there

Q. I am showing to you Exhibit 6 and Exhibit A for the plaintiff a Deed of

Petitioner contends that in the above-quoted transcript of stenographic notes,

The petition is meritorious.

The necessity of a public document for contracts which transmit or

In regard to the genuineness of petitioners signature appearing on the Deed

In fine, the preponderance of evidence is with petitioner.

WHEREFORE, the petition is GRANTED. The Court of Appeals

PRESBITERO J. VELASCO, JR.

ROBERTO A. ABAD JOSE CATRAL MENDOZA

PRESBITERO J. VELASCO, JR.

[G.R. No. 122973. July 18, 2000]

DIONISIO C. LADIGNON, petitioner, vs. COURT OF APPEALS and

Attached to private respondents Complaint was a copy of a Deed of Absolute Sale

"1.....Whether the signatures of plaintiff on the Deed of Absolute Sale

2.....Whether the failure of plaintiff to reconstitute TCT No. 240724

3.....Whether defendants should be held liable for damages to plaintiff for

"WHEREFORE, in the light of the foregoing, judgment is hereby rendered

The crossclaim of defendant Litogo Company, Inc. and Richard Tong

The dispositive portion of said Decision states:

"WHEREFORE, premises considered, the appeal is GRANTED being

2).....Ordering Ladignon to pay appellant Dimaun P50,000.00 by way of

3).....Ordering Litogo to surrender possession of the Talayan property to

4).....Ordering the Register of Deeds of Quezon City to cancel TCT No.

5).....Atty. Ladignon is ordered to return to Litogo Company the amount of

6).....To pay the costs of suit.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN GIVING

THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN

THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE

"Petitioner contends that his signature on the power of attorney was

We found, however, that the basis presented by the petitioner was

Documents acknowledged before a notary public have the evidentiary