FIRST DIVISION
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TOMAS K. CHUA, Petitioner, - versus - |
G.R. No. 182650 Present: CORONA, C.J., Chairperson, LEONARDO-DE CASTRO, BERSAMIN, VILLARAMA, JR., and PERLAS-BERNABE,* JJ. |
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WESTMONT BANK, REGISTRAR OF
DEEDS OF PARAAQUE CITY, REGISTRAR OF DEEDS OF PASAY CITY, NOTARY PUBLIC
MANUEL FONACIER, AND JOHN DOES, Respondents. |
Promulgated: February 27, 2012 |
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DECISION
VILLARAMA, JR., J.:
This Rule 45 petition filed by petitioner Tomas K.
Chua seeks to annul and set aside the January 24, 2008 Decision[1]
of the Court of Appeals (CA) in CA-G.R.
CV No. 86882, which affirmed the Decision[2]
of the Regional Trial Court (RTC), Branch 257, of Paraaque City in Civil Case No. 99-0190. Also assailed is the appellate courts
Resolution[3] dated
April 22, 2008, denying petitioners motion for reconsideration.
The
facts follow:
This case stemmed from a petition for
cancellation of mortgage[4] filed by petitioner before the RTC of
Paraaque City against respondents Westmont Bank, the Registrar of Deeds of
Paraaque City, the Registrar of Deeds of Pasay City, Notary Public Manuel S.
Fonacier and several John Does.
Petitioner alleged that on October 21,
1996, he pre-signed a Deed of Real Estate Mortgage in favor of Westmont Bank and
submitted to it his owners duplicate copies of Transfer Certificate of Title
(TCT) Nos. 87878 and 87876 in anticipation of a grant of a loan to T.C. Builders
Suppliers, Inc. When the loan did not
materialize because petitioner and Westmont Bank could not agree on the
interest rate to be applied, petitioner assumed that Westmont Bank would just cancel
the pre-signed blank Deed of Real Estate Mortgage and return the duplicate
originals of the titles. But the bank
did neither. Instead, it foreclosed the
mortgaged properties and bought the properties in the ensuing public auction
held on September 10, 1998, for which it was issued a Certificate of Sale. Thus, petitioner prayed that the Real Estate
Mortgage and the Certificate of Sale issued by Notary Public Manuel S. Fonacier
be declared null and void.
In its Answer,[5]
Westmont Bank averred that petitioner applied for a letter of credit to import
one set of plywood-making machinery. The
bank extended the credit accommodation to petitioner, and accordingly the
machinery was shipped and released to petitioner under a Trust Receipt
Agreement issued in favor of the bank. Later,
when petitioner had difficulty paying for the machinery, he requested for an
extension of time to settle his obligations and simultaneously mortgaged TCT
Nos. 87878 and 87876 in favor of Westmont Bank.
Upon execution of the Deed of Real Estate Mortgage and the delivery of
the subject TCTs to Westmont Bank, Westmont Bank agreed to extend the term of
the Trust Receipt obligation until November 3, 1997. But despite the extended term, petitioner
still failed to settle his obligation. Hence, the mortgaged properties were
extrajudicially foreclosed and sold at public auction to Westmont Bank
as the highest bidder.
At the trial, petitioner testified that
he is the owner of the two parcels of land covered by TCT Nos. 87878 and
87876. He also declared that he is the
owner of T.C. Builders Suppliers, Inc.
Sometime in October 1996, he applied
for a personal loan with Westmont Bank in the amount of P6,000,000. He was required to sign a blank Deed of Real
Estate Mortgage and to submit the owners duplicate copies of his two titles
for evaluation purposes. He averred that
he did as he was told although no receipt was given for the titles. Then, sometime in 1997, he came back to the
bank to retrieve his titles, thinking that his loan was not going to be
approved. Mr. So Leng Ton, a bank
officer, however, told him that the titles were kept by the bank in anticipation
of the approval of the loan. Later, he
found out that the subject properties were foreclosed and sold at public
auction and a Certificate of Sale issued to Westmont Bank.[6]
On cross-examination, petitioner claimed
that he signed a blank Deed of Real Estate Mortgage when he applied for his
personal loan with the bank for T.C. Builders Suppliers, Inc., but he did not
read the provisions of the deed before signing it. He also averred that he did not know if his
loan application was approved. He added
that he did not sign a promissory note or demanded in writing the return of his
TCTs. Further, he declared that he did
not appear before a notary public on July 10, 1998 to acknowledge the Deed of
Real Estate since he was in Malaysia on said date as shown in his passport.[7] Petitioner likewise claimed that sometime in
October 1996, he applied for a domestic letter of credit for P4,500,000 in
the name of T.C. Builders Suppliers, Inc., but he did not receive any amount
from the bank intended for T.C. Builders.[8]
For its part, Westmont Bank presented
as witness Mr. Noe Reyes, a bank executive. Reyes testified that on October 23,
1996, T.C. Builders Suppliers, Inc. through petitioner, applied for a Domestic
Letter of Credit in the amount of P4,500,000 to purchase plywood-making
machinery from Cotabato Timberland Company. The bank approved the application and issued a
Domestic Letter of Credit. Accordingly,
the machinery was delivered to T.C. Builders and received by petitioner on
November 5, 1996. Petitioner thereafter requested that he be
allowed to pay his loan in installments as follows: by partial payment of P1,000,000
on or before March 26, 1997, another partial payment of P1,250,000 on or
before May 5, 1997, and the remaining balance within 90 days. The request was approved, but petitioner
failed to pay his obligation on May 5, 1997.[9]
Reyes further testified that on August
29, 1997, petitioner requested that the penalty of his obligation be reduced
from 36% to 9% per annum and that he be allowed to pay the remaining balance of
P2,500,000 on September 30, 1997.[10] Said request was approved but no payment was
made. Then, on October 30, 1997, petitioner
requested that the bank convert his unpaid balance to an 18-month time loan,[11]
making assurance that if his companys financial situation improves, he will
settle his obligation within 6 months. No
payment, however, was made. Finally, on July
17, 1998, petitioner once more requested for the reduction of the interest rate
from 36% to 25% per annum and a full waiver of penalties upon full payment of
his obligation on July 27, 1998. The
bank approved petitioners final request on the condition that if no payment is
made on July 27, 1998, it will initiate foreclosure proceedings over the
mortgaged properties.[12]
Again, petitioner failed to fulfill his
promise.[13]
On January 4, 2006, the RTC of
Paraaque City promulgated its decision, dismissing petitioners complaint as
follows:
WHEREFORE, for lack of merit, the complaint of plaintiff is dismissed. The claims for attorneys fees are denied for lack of evidence.
IT IS SO ORDERED.[14]
The RTC ruled that the Deed of Real
Estate Mortgage is valid and supported by substantial consideration. It found that the bank required the execution
of the Deed of Real Estate Mortgage involving the subject properties to secure
the unpaid loan obligation of T.C. Builders Suppliers, Inc., a company owned by
petitioner. The trial court also found
that the obligation was incurred when T.C. Builders purchased from Cotabato
Timberland Company plywood-making machinery valued at P4,500,000. It was Westmont Bank that paid for the
purchase price to Cotabato Timberland Company, and the bank was able to prove
that the machinery was delivered to T.C. Builders as evidenced by a receipt
signed by petitioner himself.[15]
The trial
court also noted that despite petitioners request for several extensions of
time to pay the loan obligation, and approval of the same by the bank, he still
reneged on his promise to pay. Thus, it
held that the foreclosure sale of the properties mortgaged by petitioner was proper. Moreover, the RTC held that it was not
convinced that petitioner indeed signed a blank Deed of Real Estate Mortgage. The RTC found it difficult to believe that
petitioner, who appeared to be an experienced businessman, would allow such a
questionable practice, unless he fully agreed with it. Assuming that he did
sign a blank deed of real estate mortgage, it was made with his full consent
and likely for purposes of his convenience. Similarly, the RTC found that the notarization
of the document on the date when he was allegedly in Malaysia was also made
with his consent and for his convenience.[16]
Unsatisfied, petitioner appealed the
RTC Decision to the CA, raising the following issues:
1. Whether the [RTC] committed error of fact in finding that:
(a) [Petitioners] claim of having signed a blank deed of real estate mortgage document is not
indubitable and, even if true, the same was made with his full consent and
approval and could likely be for purposes of his convenience and the bank.
(b) The subject Deed of Real Estate Mortgage secured the unpaid loan
obligation of T.C. Builders Suppliers, Inc. to Westmont.
2. Whether the [RTC] committed error of law when:
(a) It manifestly disregarded the undisputed
evidence presented by [petitioner] showing that the subject Deed was contrived and spurious.
(b) It admitted and gave credence to Westmonts documentary evidence
even if the due execution and authenticity was not properly established in accordance with Rule 132,
Section 20 of the Rules of Evidence.
(c) It ruled that the notarization of the subject was made with
[petitioners] consent and for his and the banks convenience.
(d) It did not hold that the subject Deed was, on its face, null
and void for lack of Westmonts consent.
(e) It did not rule that the foreclosure sale of the mortgaged
properties is valid.
(f) It ruled that [petitioners] claim for damages have no factual and
legal basis.[17] (Emphasis and underscoring in the original.)
On January 24, 2008, the CA rendered
the assailed decision, the fallo of which reads:
WHEREFORE, premises considered, the instant appeal is DISMISSED. The assailed Decision of the court a quo STANDS.
SO ORDERED.[18]
The CA held that except for petitioners
self-serving testimony, there is nothing on record to sustain his claim that he
signed a blank Deed of Real Estate Mortgage. In fact, the CA found that the deed in
question is complete in form and substance when the parties signed it. The CA did not believe that petitioner, who is
apparently of age and in excellent mental faculties, would deposit the titles
of his properties with Westmont Bank without being sure of what kind of transaction
he was entering into. The appellate
court was likewise not convinced by petitioners claim that the Deed of Real
Estate Mortgage was intended to secure his personal loan of P6,000,000
as petitioner himself already admitted in his Petition for Cancellation of
Mortgage before the trial court that he signed the deed to secure a loan to be
granted to T.C. Builders Suppliers, Inc. Finally, the CA ruled that the fact that the
deed was signed on the day he flew to Malaysia does not render the deed spurious
as it was possible that he signed the petition before he flew to Malaysia in
the afternoon.[19]
Undaunted, petitioner filed a motion
for reconsideration of the above CA decision, but his motion was denied in a
Resolution dated April 22, 2008. Hence,
this appeal raising the following issues:
I.
WHETHER THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT HELD THAT THE COURT A QUO WAS CORRECT IN ADMITTING WESTMONTS DOCUMENTARY EXHIBITS IN EVIDENCE EVEN IF THE AUTHENTICITY AND DUE EXECUTION OF THE SAME HAVE NOT BEEN ESTABLISHED IN ACCORDANCE WITH THE RULES OF EVIDENCE.
II.
WHETHER THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT CONCLUDED, BASED MERELY ON SPECULATION AND CONJECTURE, THAT PETITIONER COULD HAVE POSSIBLY SIGNED THE DEED OF REAL ESTATE MORTGAGE BEFORE HE LEFT FOR MALAYSIA ON 10 JULY 1998.
III.
WHETHER THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT REFUSED TO HOLD THAT PETITIONERS TESTIMONY IN OPEN COURT HAD SUPERSEDED THE ALLEGATIONS IN HIS PETITION BEFORE THE COURT A QUO, CONSISTENT WITH THIS HONORABLE COURTS RULING IN GARDNER V. COURT OF APPEALS.
IV.
THE HONORABLE COURT OF APPEALS ERRED ON A QUESTION OF LAW WHEN IT FAILED TO RECOGNIZE THAT PETITIONER HAS OVERCOME HIS BURDEN OF PROOF AND HAS ESTABLISHED HIS CASE BY A PREPONDERANCE OF EVIDENCE WHICH HAVE NOT BEEN VALIDLY DISPUTED BY WESTMONT; HENCE, PETITIONER IS ENTITLED TO THE RELIEFS HE PRAYED FOR IN THE COURT A QUO.[20]
Essentially, the core issue in this petition is whether the
CA erred in affirming the findings of the RTC that the Real Estate Mortgage
executed by petitioner and Westmont Bank is valid.
Petitioner
argues that the CA erred in holding that the trial court was correct in
admitting Westmont Banks documentary evidence.
He asserts that Westmont Bank failed to prove the due execution and
authenticity of the documentary evidence it presented by anyone who saw the
document executed or written, or by evidence of the genuineness of the
signature of the maker.
The petition has no merit.
The RTC, after considering the
evidence and the testimonies of the witnesses, found that the Deed of Real
Estate Mortgage was executed to secure the unpaid loan obligation of T.C. Builders
Suppliers Inc., a company owned by petitioner.
The CA found no error on the part of the trial courts appreciation of
evidence before it, even noting that the documentary exhibits were the subject
of cross-examinations and were subsequently admitted by the trial court without
any objection from petitioner. Moreover,
the CA observed that petitioner failed to rebut the authenticity and due
execution of the documentary exhibits of Westmont Bank. All petitioner could offer by way of evidence
was his unsupported claim that he signed a blank Deed of Real Estate Mortgage. Such claim is insufficient to overcome the
Deed of Real Estate Mortgage which is a notarized document.
The
court has held that one who denies the due execution of a deed where ones
signature appears has the burden of proving that contrary to the recital in the
jurat, one never appeared before the
notary public and acknowledged the deed to be a voluntary act.[21] We have also held that a notarized instrument is admissible in
evidence without further proof of its due execution, is conclusive as to the
truthfulness of its contents, and has in its favor the presumption of
regularity.[22]
In this case, the Deed of Real Estate
Mortgage involving TCT Nos. 87878 and 87876 was notarized and acknowledged
before notary public Fina Dela Cuesta-Tantuico.[23] Being
a public document, it enjoys the presumption of regularity. It is a prima
facie evidence of the truth of the facts stated therein and a conclusive
presumption of its existence and due execution. To overcome this presumption, there must be
clear and convincing evidence. Absent such evidence, as in this case, the
presumption must be upheld.
Petitioner
likewise asserts that it was physically impossible for him to execute and
acknowledge the Deed of Real Estate Mortgage before notary public Fina Dela
Cuesta-Tantuico because on the supposed date of execution and notarization, he
was in Malaysia with his wife. However,
as correctly pointed out by the CA, it can be gathered from the testimony of
petitioner that he left the Philippines in the afternoon of July 10, 1998 and
arrived in Malaysia an hour later. The
CA noted that petitioner was in the Philippines from morning until early
afternoon on said date, which means that he still had time to attend to his
business transactions before his flight to Malaysia. Thus, we find no error on the part of the CA
in concluding that petitioner could have signed the Deed of Real Estate
Mortgage before he left for Malaysia on said date.
We note that these issues raised by
petitioner are factual in nature and calls for a review of the evidence already
considered in the proceedings below. The
evaluation and calibration of the evidence necessarily involves consideration
of factual issuesan exercise that is not appropriate for a petition for review
on certiorari under Rule 45.
As a general rule, only errors of law
are reviewable by the Supreme Court on petitions for review on certiorari.[24] The rule finds more stringent application
where the CA upholds the findings of fact of the trial court. In such instance, as in this case, this Court
is generally bound to adopt the facts as
determined by the lower courts.[25] When supported by substantial evidence,
the findings of fact of the CA are conclusive and binding on the parties and
are not reviewable by this Court.[26]
Next, petitioner submits that his
statement in the petition for cancellation of mortgage admitting that he signed
the Deed of Real Estate Mortgage to secure a loan to be granted to T.C. Builders
should be deemed to have been superseded by his testimony in open court that the
subject Deed was supposedly intended to secure his personal loan with Westmont
Bank. In support of his argument, he
cites our ruling in Gardner v. Court of Appeals,[27]
wherein the court allowed a partys testimony to override admissions made in
his Answer.
Petitioner pointed out that in Gardner,
we held that as a general rule, facts alleged in a partys pleading are deemed
admissions of that party and are binding upon it, but this is not an absolute
and inflexible rule. An answer is a mere
statement of fact which the party filing expects to prove, but it is not
evidence.[28]
Thus, petitioner asserts that applying
the foregoing by analogy, his statements in the petition for cancellation of
mortgage had been repudiated by his subsequent testimony in open court.
The argument is untenable.
In the Gardner case, the
witness had repudiated in open court the defenses he had raised in his Answer
and that the court found his testimony to be deserving of weight and
credence. In said case, both the trial
court and the appellate court believed in the witness credibility. Here, the reverse holds true as both the
trial court and CA found petitioners testimony that he applied for a personal
loan to be conflicting and incredible. Therefore,
we find that petitioners reliance on the ruling in Gardner is
misplaced.
Finally, in civil cases, the party
having the burden of proof must establish his case by a preponderance of
evidence. 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. Preponderance 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.[29]
In the present case, petitioner
failed to overcome the burden of proving his claim by preponderance of evidence
that the questioned Deed is null and void.
As we mentioned earlier, the CA did not find any error on the part of
the trial courts appreciation of evidence, which found the Deed of Real Estate
Mortgage to be valid and supported by substantial consideration. The trial
court also found that since petitioner failed to pay his obligation despite
request for several extensions of time to pay his loan, the foreclosure sale of
the properties was therefore valid.
WHEREFORE,
the petition for review on certiorari is DENIED for utter lack of merit.
The Decision dated January 24, 2008, as well as the Resolution dated
April 22, 2008 of the Court of Appeals in CA-G.R. CV No. 86882 are AFFIRMED.
Costs
against petitioner.
SO ORDERED.
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MARTIN S. VILLARAMA,
JR. Associate Justice |
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WE
CONCUR: RENATO C. CORONA Chief Justice Chairperson |
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TERESITA J. LEONARDO-DE CASTRO Associate Justice |
LUCAS P. BERSAMIN Associate Justice |
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ESTELA M.
PERLAS-BERNABE Associate Justice |
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C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII
of the 1987 Constitution, 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.
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RENATO C. CORONA Chief Justice |
* Designated
additional member per Special Order No. 1203 dated February 17, 2012.
[1] Rollo, pp. 42-52. Penned by Associate Justice Myrna Dimaranan-Vidal with Associate Justices Jose L. Sabio, Jr. and Jose C. Reyes, Jr. concurring.
[2] Id. at 102-109. Penned by Judge Rolando G. How.
[3] Id. at 53.
[4] Records, Vol. I, pp. 2-7.
[5] Id. at 25-29.
[6] TSN, December 10, 2001, pp. 2-19.
[7] Exhibit F, records, Vol. III, p. 572.
[8] TSN, December 10, 2001, pp. 22-28.
[9] TSN, April 23, 2003, pp. 4-5, 18.
[10] Exhibit 12, records, Vol. III, p. 617.
[11] Exhibit 13, id. at 618.
[12] Exhibit 14, id. at 619.
[13] TSN, April 23, 2003, pp. 18-22.
[14] Supra note 2, at 109.
[15] Id. at 107-108.
[16] Id. at 108-109.
[17] CA rollo, pp. 50-51.
[18] Supra note 1, at 52.
[19] Id. at 48-51.
[20] Id. at 21-22.
[21] Santos v. Lumbao, G.R. No. 169129, March 28, 2007, 519 SCRA 408, 426-427.
[22] China Banking Corporation v. Lagon, G.R. No. 160843, July 11, 2006, 494 SCRA 560, 567.
[23] Records, Volume I, pp. 12-14.
[24] Sering v. Court of Appeals, 422 Phil. 467, 471 (2001).
[25] Ong v. Ong, G.R. No. 153206, October 23, 2006, 505 SCRA 76, 85.
[26] Ontimare, Jr. v. Elep, G.R. No. 159224, January 20, 2006, 479 SCRA 257, 265; Ramirez v. National Labor Relations Commission, G.R. No. 155150, August 29, 2006, 500 SCRA 104, 106.
[27] No. L-59952, August 31, 1984, 131 SCRA 585.
[28] Id. at 600.
[29] Eulogio v. Apeles, G.R. No. 167884, January 20, 2009, 576 SCRA 561, 571-572.