THIRD
DIVISION
PAN PACIFIC INDUSTRIAL G.R. No. 125283
SALES
CO., INC.,
Petitioner, Present:
QUISUMBING, J.,
Chairman,
- versus - CARPIO,
CARPIO-MORALES, and
TINGA, JJ.
COURT OF APPEALS and
NICOLAS
CAPISTRANO, Promulgated:
Respondents.
x---------------------------------------------------------------------------x
Tinga, J.:
Petitioner Pan Pacific Industrial Sales Co., Inc. (Pan
Pacific) filed the instant Petition
for Review on Certiorari[1]
assailing the Decision[2]
dated
The case arose when on
The
first cause of action is for the nullification, or alternatively, for the
“rescission,” of a Deed of Absolute
Sale[7]
covering a parcel of land that
Capistrano owned, located at 1821 (Int.), Otis Street (now Paz Guanzon Street),
Paco, Manila, and covered by Transfer Certificate of Title (TCT) No. 143599 to Cruz.[8] This
is the subject lot. Capistrano denied having executed the deed.
The
second cause of action is for the rescission of another agreement with an
alternative prayer for specific performance. Capistrano alleged that he agreed
to sell another parcel of land in the same vicinity to Cruz. According to
Capistrano, Cruz only paid P100,000.00 of the stipulated purchase price,
thereby leaving P250,000.00 still unpaid.[9]
The
operative facts follow.
On
Shortly, by virtue of the Special Power of Attorney, Cruz obtained
a loan in the amount of P500,000.00 from the Bank. Thus, he executed a Real Estate Mortgage[12] over
the subject lot in favor of the Bank.[13]
Capistrano
and Cruz then executed a letter-agreement dated 23 September 1982 whereby Cruz
agreed to buy the subject lot for the price of P350,000.00, of which P200,000.00
would be paid out of the loan secured by Cruz, and the balance of P150,000.00
in eight (8) quarterly payments of P18,750.00 within two (2) years from
30 October 1982, without need of demand and with interest at 18% in case of
default.[14]
On
Following
the execution of the deed of sale, Cruz continued payments to Capistrano for
the subject lot. Sometime in October 1985, Capistrano delivered to Cruz a Statement of Account[17] signed
by Capistrano, showing that as of 30 October 1985, Cruz’s balance stood at P19,561.00
as principal, and P3,520.98 as interest, or a total of P23,081.98.
Thus,
in May 1987, with the mortgage on the subject lot then being in danger of
foreclosure by the Bank, Cruz filed a case with the RTC of Manila, Branch 11,
docketed as Civil Case No. 87-40647, to enjoin the foreclosure. Cruz impleaded
Capistrano and his spouse Josefa Borromeo Capistrano as defendants, the title
to the subject lot not having been transferred yet to his name.[18]
Cruz
also devised a way to save the subject lot from foreclosure by seeking a buyer
for it and eventually arranging for the buyer to pay the mortgage debt. Towards
this end, Cruz succeeded in engaging Pan Pacific. Thus, on P1,180,000.00.[19] Consequently,
on 23 September
1988, the Bank executed a Cancellation of Real Estate Mortgage.[20] On
even date, Cruz executed a Deed of
Absolute Sale[21] over the subject
lot in favor of Pan Pacific, attaching thereto the previous Deed of Absolute Sale executed
by Capistrano in favor of Cruz.
Surprisingly,
on
Before
long, in November 1988, Capistrano filed the precursory complaint before
the Manila RTC in Civil Case No. 88-46720.
Pan Pacific, which bought the subject lot from the Cruz
spouses, was allowed to intervene in the proceedings and joined Cruz, et al.
in resisting the complaint insofar as the first cause of action on the subject
lot is concerned.[24]
Then
on
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendant, Severo E. (sic) Cruz III, his spouse,
Lourdes Miranda Cruz, and the intervenor, Pan Pacific Industrial Sales Co.,
Inc., as follows:
1. Declaring the Letter-Agreement, dated September 23,
1982, Exhibit “C”, as resolved and/or rescinded;
2. Declaring both the Deed of Absolute Sale, Exhibit “H”,
and the document entitled, “Marital Consent”, Exhibit “K”, null and void;
3. Declaring the Deed of Absolute Sale executed by the
spouses Severo C. Cruz, III and Lourdes Miranda Cruz in favor of the
intervenor, Pan Pacific Industrial Sales, Co., Inc., Exhibit “8”, null and
void;
4. Making the writ of preliminary injunction issued by
this Court on
5. Ordering the intervenor, thru its legal counsel and
corporate secretary, Atty. Senen S. Burgos, who has possession of the owner’s
copy of TCT No. 143599 of the Register of Deeds of Manila, in the name of the
plaintiff, to surrender the same to this Court within ten days from finality of
the decision for turn over to the plaintiff;
6. Ordering Defendant Register of Deeds of Manila to
reject and not give due course to the documents submitted to it, which have for
their purpose the transfer of the real estate property covered by TCT No.
143599 from the name of the plaintiff to Defendant Cruz and/or to the
intervenor; and
7. Ordering the
spouses Severo C. Cruz, III and Lourdes Miranda Cruz to pay the plaintiff the
sum of P69,561.00 as net amount due to the latter as per the computation
in the end-part of this decision.
The counterclaims of both Severo C. Cruz, III and spouse,
and of the intervenor, Pan Pacific Industrial Sales Co., Inc., are both
dismissed, for lack of merit.
Double costs against the defendants-Cruz spouses.
SO ORDERED.[25]
To arrive at the conclusion that the first
Deed of Absolute Sale and the Marital Consent are spurious,
the trial court mainly relied on Capistrano’s disavowal of his signature and
that of his wife’s, together with extrinsic factors which in its opinion evinced
the spuriousness.
Pan Pacific and the Cruz spouses interposed
separate appeals to the Court of Appeals, their common concern being the trial
court’s finding that the Deed of
Absolute Sale and the Marital
Consent were spurious.[26]
In assailing this finding, Pan Pacific
and the Cruz spouses contended that Capistrano failed to present clear
and convincing evidence to overturn the presumption of regularity of public
documents like the documents in question.[27]
The Court of Appeals affirmed the RTC Decision.
Concerning the subject lot, it held that while a notarial document cannot be
disproved by the mere denial of the signer, the denial in this case should be
taken together with the other circumstances of the case which in sum constitute
clear and convincing evidence sufficient to overcome the presumption of regularity
of the documents.[28]
The Cruz spouses did not elevate the
Court of Appeals’ Decision to this Court. Thus, the RTC Decision became final
as to them.
Pan Pacific, however, filed the
instant Petition solely
concerning the first cause of action in the Amended Complaint. Pan Pacific contends that the genuineness
and due execution of the Deed of
Absolute Sale and Marital
Consent cannot be overridden by the self-serving testimony of
Capistrano. It stresses that the trial court cannot rely on irrelevant
extrinsic factors to rule against the genuineness of the deed.[29]
Finally, it points out that Capistrano cannot contest the sale of the subject
lot to Cruz, as the sale had already been consummated.[30]
For his part, Capistrano posits in his
Memorandum[31] that Pan Pacific
is not an innocent purchaser for value and in good faith as Cruz was never the
registered owner of the subject lot. Pan Pacific was bound at its peril to
investigate the right of Cruz to transfer the property to it. Moreover,
Capistrano asserts that the legal presumption of regularity of public documents
does not obtain in this case as the documents in question were not properly
notarized. He adds that the parties never appeared before the notary public as
in fact the deed had only been delivered by Capistrano to the house of
Cruz’s mother.
Furthermore, Capistrano maintains that
his spouse’s signature on the Marital
Consent is a forgery as it was virtually impossible for her to
have signed the same. Lastly, Capistrano disputes Cruz’s assertion that the
sale had been consummated, pointing out that the Amended Complaint consisted of two (2) causes of action pertaining
to two (2) separate lots, and Cruz had only paid P100,000.00 of the
total price of the lot subject of the second cause of action.
The petition is imbued with merit.
Pan Pacific disputes the common
conclusion reached by the courts below that the presumption of regularity of
the Deed of Absolute Sale and
the Marital Consent, which in
its estimation are both public documents, has been rebutted by Capistrano’s countervailing
evidence. The correctness of the conclusions on the alleged spuriousness of the
documents in question drawn by the courts below from the facts on record is before
this Court. The issue is a question of law cognizable by the Court.[32]
Deeply embedded in our jurisprudence
is the rule that notarial documents celebrated with all the legal requisites
under the safeguard of a notarial certificate is evidence of a high character
and to overcome its recitals, it is incumbent upon the party challenging it to
prove his claim with clear, convincing and more than merely preponderant
evidence.[33]
A notarized document carries the evidentiary
weight conferred upon it with respect to its due execution, and it has in its
favor the presumption of regularity which may only be rebutted by evidence so clear,
strong and convincing as to exclude all controversy as to the falsity of the
certificate. Absent such, the presumption must be upheld. The burden of proof
to overcome the presumption of due execution of a notarial document lies on the
one contesting the same. Furthermore, an allegation of forgery must be proved
by clear and convincing evidence, and whoever alleges it has the burden of
proving the same.[34]
Evidently, as he impugns the
genuineness of the documents, Capistrano has the burden of making out a
clear-cut case that the documents are bogus. The courts below both concluded
that Capistrano had discharged this
burden. However, this Court does not share the conclusion. Indeed, Capistrano
failed to present evidence of the forgery that is enough to overcome the
presumption of authenticity.
To support the allegation of the
spuriousness of his signature on the Deed
of Absolute Sale and that of his wife on the Marital Consent, Capistrano relied
heavily on his bare denial, at the same time taking sanctuary behind
other circumstances which supposedly cast doubt on the authenticity of the documents. Capistrano did
not bother to present corroborating witnesses much less an independent expert
witness who could declare with authority and objectivity that the challenged
signatures are forged. It befuddles the Court why both the courts below did not
find this irregular considering that the Court has previously declared in Sy
Tiangco v. Pablo and Apao,,[35]
“that the execution of a document that has been ratified before a notary public
cannot be disproved by the mere denial of the alleged signer.”
The case of Chilianchin v. Coquinco[36] also finds
application in this regard wherein we stated that:
As the lower court correctly said, the plaintiff
did not even present a sample of his authentic signature to support his
contention that it is not his the (sic) signature appearing in said document.
He did not call a handwriting expert to prove his assertion. His attorney, at
the beginning of the trial, made it of record that if the defendant present an
expert in hand-writing to show that the signature in question is genuine, the
plaintiff will also present an expert to the contrary, as if it were incumbent
upon the defendant to show that the signature of the plaintiff in Exhibit A is
genuine . . . .[37]
Corollarily, he who disavows the authenticity
of his signature on a public document bears the responsibility to present
evidence to that effect. Mere disclaimer is not sufficient. At the very least,
he should present corroborating witnesses to prove his assertion. At best, he
should present an expert witness.
On the other hand, the Court cannot
understand why an unfavorable inference arose not from Capistrano’s but from Cruz’s
failure to have the documents examined by an expert witness of the National
Bureau Investigation (NBI) and to present the notary public as witness. Specifically,
the courts below took Cruz’s inability to obtain the NBI examination of the
documents as he had somehow undertaken as an indication that the documents are counterfeit.[38]
The courts below may have forgotten
that on Capistrano lies the burden to prove with clear and convincing evidence
that the notarized documents are spurious. Nothing in law or jurisprudence
reposes on Cruz the obligation to prove that the documents are genuine and duly
executed. Hence it is not incumbent upon Cruz to call the notary public or an
expert witness. In contrast, Capistrano should have called the expert witness,
the notary public himself or the witnesses to the document to prove his contention
that he never signed the deed of sale, that its subscribing witnesses
never saw him sign the same, and that he never appeared before the notary
public before whom the acknowledgment was made.
In fact, there is no evidence that the
notarization of the documents did not take place. All that Capistrano could say
on this matter was that he had not seen Benedicto, the notary public.[39]
The assertion that the parties to the deed never appeared before the notary
public is not supported by evidence either. The courts below drew an inference
to that effect from Cruz’s testimony that the deed of sale was dropped or
delivered to his mother’s house.[40]
That is not a reasonable deduction to make as it is plainly conjectural. No
conclusion can be derived therefrom which could destroy the genuineness of the
deed. The testimony means what it declares: that the copy of the deed was dropped at the house
of Cruz’s mother. That is all.
Nor can the Court lend credence to the
thinking of the courts below that since Cruz had a balance of P132,061.00
owing to Capistrano as of the date of the deed of sale, the latter could not have
possibly executed the deed. This is plain guesswork. From the existence of
Cruz’s outstanding balance, the non-existence of the deed of sale does not
necessarily follow.
Indeed, a vendor may agree to a deed
of absolute sale even before full payment of the purchase price. Article 1478 of the Civil Code states that
“the parties may stipulate that ownership in the thing shall not pass to the
purchaser until he has fully paid the price.” A sensu contrario, the
parties may likewise stipulate that the ownership of the property may pass even
if the purchaser has not fully paid the price.
The courts below also assigned an
adverse connotation to Cruz’s impleading of the Capistrano spouses as
party-defendants in the action against the Bank to enjoin the foreclosure of
the mortgage on the subject lot. Cruz’s move is congruent with both his strong
desire to protect his interest in the subject lot and the reality that there
was an existing deed of sale in his favor. Precisely, his interest in the lot
is borne out and had arisen from the deed of sale. As purchaser of the lot, he
had to avert the foreclosure of the mortgage thereon. And to ensure against the
dismissal of the action for failure to join a real party-in-interest, he had to
implead Capistrano in whose name the title to the subject lot was registered
still.
Apart from Capistrano’s abject failure
to overcome the presumption of regularity and genuineness with which the Deed of Absolute Sale is impressed as
a public document, Capistrano’s cause is eviscerated by his own acts in writing
before and after the execution of the deed. Said written acts constitute indelible
recognition of the existence and genuineness of the Deed of Absolute Sale.
First is the letter-agreement[41]
dated 23 September 1982 made and signed by Capistrano in favor of Cruz, which
the latter also signed subsequently, stating that Cruz will, as he did, purchase
the subject lot for P350,000.00 to be paid according to the terms
provided therein.
Second is the Statement of
Account[42] signed by Capistrano, which he delivered to Cruz, showing
that as of 30 October 1985, Cruz’s balance of the stipulated purchase price
consisted of P19,561.00 as principal and P3,520.98 as interest,
or a total of P23,081.98.
Third
is Capistrano’s Amended Complaint itself
which illustrates his own manifest uncertainty as to the relief he was
seeking in court. He demanded that the Deed
of Absolute Sale be nullified yet he prayed in the same breath for the
“rescission” of the same[43]—evidently,
a self-defeating recognition of the contract.
In asking for “rescission,” Capistrano obviously was invoking Article
1191 of the Civil Code which provides that the “power to rescind,” which really
means to resolve or cancel, is implied in reciprocal obligations “in case one
of the obligors should not comply with what is incumbent upon him.” When a party asks for the resolution or cancellation
of a contract it is implied that he recognizes its existence. A non-existent contract need not be cancelled.
These
are unmistakable written admissions of Capistrano that he really intended to sell the
subject lot to Cruz and that he received payments for it from the latter as
late as the year 1985. It is thus a little baffling why in 1988, he decided to disown
the Deed of Absolute Sale. The
most plausible explanation for his sudden change of mind would be his belated realization
that he parted with the subject lot for too small an amount (P350,000.00),
compared to the price pegged by Cruz (P1,800,000.00) in the sale to Pan
Pacific.
Now, to the Marital Consent. The fact
that the document contains a jurat, not an acknowledgment, should not affect
its genuineness or that of the related document of conveyance itself, the Deed of Absolute Sale. In this
instance, a jurat suffices as the document only embodies the manifestation of
the spouse’s consent,[44]
a mere appendage to the main document.
The use of a jurat, instead of an
acknowledgement does not elevate the Marital
Consent to the level of a public document but instead consigns it to the
status of a private writing.[45]
The lack of acknowledgment, however, does not render a deed invalid. 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, is only
for convenience; it is not essential for validity or enforceability.[46]
From the perspective of the law on
evidence, however, the presumption of regularity does not hold true with
respect to the Marital Consent which
is a private writing. It is subject to the requirement of proof under Section
20, Rule 132 of the Rules of Court which states:
Section 20. Proof of private document.- 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.
Any other private
document need only be identified as
that which is claimed to be.
The requirement of proof of the
authenticity of the Marital Consent
was adequately met, in this case, through the testimony of Cruz to
the effect that, together with the other witnesses to the document, he was
present when Capistrano’s wife affixed her signature thereon before notary
public Benedicto.[47]
Viewed against this positive declaration, Capistrano’s negative and
self-serving assertions that his wife’s signature on the document was forged
because “(i)t is too beautiful” and that his wife could not have executed the Marital Consent because it was
executed on her natal day and she was somewhere else, crumble and become
unworthy of belief.
That the Marital Consent was executed prior to the Deed of Absolute Sale also
does not indicate that it is phoney. A fair assumption is that it was executed
in anticipation of the Deed of
Absolute Sale which was accomplished a scant six (6) days later.
With respect to whatever balance Cruz may
still owe to Capistrano, the Court believes that this is not a concern of Pan
Pacific as the latter is not a party to the Deed of Absolute Sale between Capistrano and Cruz. But of
course, Pan Pacific should enjoy full entitlement to the subject lot as it was sold
to him by Cruz who earlier had acquired title thereto absolutely and unconditionally
by virtue of the Deed of Absolute Sale. Otherwise laid down, Cruz had the right to sell
the subject lot to Pan Pacific in 1988, as he in fact did. Thus, the question of whether or not Pan Pacific is a
purchaser in good faith should be deemed irrelevant.
WHEREFORE, the Petition is GRANTED.
The Decision dated
SO
ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairman
ANTONIO T. CARPIO CONCHITA CARPIO-MORALES
Associate
Justice 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 Court’s Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairman,
Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairman’s 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
Court’s Division.
ARTEMIO V. PANGANIBAN
Chief
Justice
[2]
[32]Federal
Express Corporation v. American Home Assurance Company, G.R. No. 150094, 18
August 2004, 437 SCRA 50, 55 citing Pilar Development Corporation v. Intermediate Appellate
Court, No. L-72283, 12 December 1986, 146 SCRA 215, 220-221; See
Dissenting Opinion of J. Tinga in Alonso v. Cebu
Country Club, 5 December 2003, G.R. No. 130876, 417 SCRA 115, 138.
[33]R.J. Francisco, Evidence Rules of Court In the
PhilippineS Rules, 128-34, (3rd ed., p. 517 citing Mendezona
v. Philippine Sugar Estates Development Co., 41 Phil. 475.
[34]Basilio v. Court of Appeals, G.R. No. 125935, 29 November
2000, 346 SCRA 321, 324; De la Cruz v. Sison, G.R.
No. 163770, 17 February 2005, 451 SCRA 754, 762; See also Medina v. Greenfield Development Corporation, G.R. No.
140228, 19 November 2004, 443 SCRA 150, 160; Vda. de Jayme
v. Court of Appeals, 439 Phil. 192, 206 (2002); Loyola v. Court of Appeals, 383
Phil. 171, 181 (2000); Romualdez-Licaros v. Licaros, 449 Phil. 824, 837 (2003); Naguiat
v. Court of Appeals, G.R. No. 118375, 3
October 2003, 412 SCRA 591, 596-597.
[44]See
Article 166 of the Civil Code which reads as follows:
Art.
166. Unless the wife has been declared a non compos mentis or a
spendthrift, or is under civil interdiction or is confined in a leprosarium,
the husband cannot alienate or encumber any real property of the conjugal
partnership without the wife’s consent. If she refuses unreasonably to give her
consent, the court may compel her to
grant the same.
This
article shall not apply to property acquired by the conjugal partnership before
the effective date of this Code.