Section 19. Interpretation according to usage. — An instrument may be construed according to Article 1773.

rticle 1773. A contract of partnership is void, whenever immovable property is contributed

usage, in order to determine its true character. (17) thereto, if an inventory of said property is not made, signed by the parties, and attached to the
public instrument.
Section 20. Witnesses; their qualifications. — Except as provided in the next succeeding section, all
persons who can perceive, and perceiving, can make their known perception to others, may be
witnesses.

Section 23. Disqualification by reason of death or insanity of adverse party. — Parties or assignor of
parties to a case, or persons in whose behalf a case is prosecuted, against an executor or
administrator or other representative of a deceased person, or against a person of unsound mind,
upon a claim or demand against the estate of such deceased person or against such person of
unsound mind, cannot testify as to any matter of fact occurring before the death of such deceased
person or before such person became of unsound mind. (20a)

Section 30. Admission by conspirator. — The act or declaration of a conspirator relating to the
conspiracy and during its existence, may be given in evidence against the co-conspirator after the
conspiracy is shown by evidence other than such act of declaration.

Article 1305. A contract is a meeting of minds between two persons whereby one binds himself,
with respect to the other, to give something or to render some service. (1254a)

Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions
as they may deem convenient, provided they are not contrary to law, morals, good customs, public
order, or public policy.

Article 1318. There is no contract unless the following requisites concur:

(1) Consent of the contracting parties;

(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established. (1261)

Article 749. In order that the donation of an immovable may be valid, it must be made in a public
document, specifying therein the property donated and the value of the charges which the donee
must satisfy.

The acceptance may be made in the same deed of donation or in a separate public document, but
it shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both instruments.

Article 1771. A partnership may be constituted in any form, except where immovable property or
real rights are contributed thereto, in which case a public instrument shall be necessary. (1667a)

Article 1772. Every contract of partnership having a capital of three thousand pesos or more, in
money or property, shall appear in a public instrument, which must be recorded in the Office of the
Securities and Exchange Commission.

Failure to comply with the requirements of the preceding paragraph shall not affect the liability of
the partnership and the members thereof to third persons. (n)
LEGFORMS – ADMISSIBILITY OF DOCS
G.R. No. L-46892 September 30, 1981
HEIRS OF AMPARO DEL ROSARIO, plaintiffs-appellees,
vs.
AURORA O. SANTOS, JOVITA SANTOS GONZALES, ARNULFO O. SANTOS, ARCHIMEDES O.
SANTOS, ERMELINA SANTOS RAVIDA, and ANDRES O. SANTOS, JR., defendants-appellants.
GUERRERO, J.:
The Court of Appeals, 1 in accordance with Section 31 of the Judiciary Act of 1948, as amended,
certified to Us the appeal docketed as CA-G.R. No. 56674-R entitled "Amparo del Rosario, plaintiff-
appellee, vs. Spouses Andres Santos and Aurora Santos, defendants-appellants," as only questions
of law are involved.
On January 14, 1974, Amparo del Rosario filed a complaint against the spouses Andres F. Santos and
Aurora O. Santos, for specific performance and damages allegedly for failure of the latter to execute
the Deed of Confirmation of Sale of an undivided 20,000 square meters of land, part of Lot 1, Psu-
206650, located at Barrio Sampaloc, Tanay, Rizal, in malicious breach of a Deed of Sale (Exhibit A or
1) dated September 28, 1964.
Amparo del Rosario died on Sept. 21, 1980 so that she is now substituted by the heirs named in her
will still undergoing probate proceedings. Andres F. Santos also died, on Sept. 5, 1980, and he is
substituted by the following heirs: Jovita Santos Gonzales, Arnulfo O. Santos, Archimedes O. Santos,
Germelina Santos Ravida, and Andres O. Santos, Jr.
The Deed of Sale (Exh. A or 1) is herein reproduced below:
DEED OF SALE
KNOW ALL MEN BY THESE PRESENTS:
I, ANDRES F. SANTOS, of legal age, married to Aurora 0. Santos, Filipino and resident cf San
Dionisio, Paranaque, Rizal, Philippines, for and in consideration of the sum of TWO THOUSAND (P
2,000.00) PESOS, Philippine Currency, the receipt whereof is hereby acknowledged, do hereby
SELLS, CONVEYS, and TRANSFERS (sic) unto Amparo del Rosario, of legal age, married to Fidel del
Rosario but with legal separation, Filipino and resident of San Dionisio, Paranaque, Rizal,
Philippines that certain 20,000 square meters to be segregated from Lot 1 of plan Psu-206650
along the southeastern portion of said lot, which property is more particularly described as
follows:
A parcel of land (Lot 1 as shown on plan Psu-206650, situated in the Barrio of Sampaloc,
Municipality of Tanay, Province of Rizal. Bounded on the SW., along lines 1-2-3, by Lot 80 of
Tanay Public Land Subdivision, Pls-39; on the NW., along lines 3-4-5, by Lot 2; and along lines
5-6-7-8-9-10-11, by Lot 6; on the NE., along lines 11-12-13, by Lot 3: and along lines 13-1415,
by Lot 4, all of plan Psu-206650; and on the SE., along line 15-1, by Lot 5 of plan Psu- 206650 ...
; containing an area of ONE HUNDRED EIGHTY ONE THOUSAND FOUR HUNDRED TWENTY
(181,420) SQUARE METERS. All points referred to are indicated on the plan and are marked on
the ground as follows: ...
of which above-described property, I own one-half (1/2) interest thereof being my attorney's fee,
and the said 20,000 square meters will be transferred unto the VENDEE as soon as the title
thereof has been released by the proper authority or authorities concerned:
That the parties hereto hereby agree that the VENDOR shall execute a Deed of Confirmation of
Deed of Sale in favor of the herein VENDEE as soon as the title has been released and the
subdivision plan of said Lot 1 has been approved by the Land Registration Commissioner.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of September, 1964, in the City
of Manila, Philippines.
s/ ANDRES F. SANTOS t/ ANDRES F. SANTOS
With My Marital Consent:
s/ Aurora O. Santos (Wife) t/ Aurora O. Santos (Wife)
SIGNED IN THE PRESENCE OF: s/ Felicitas C. Moro s/ Corona C. Venal
REPUBLIC OF THE PHILIPPINES) ) SS.
BEFORE ME, a Notary Public for and in Rizal, Philippines, personally appeared Andres F. Santos,
with Res. Cert. No. 4500027 issued at Paranaque, Rizal, on Jan. 9, 1964, B-0935184 issued at
Paranaque, Rizal on April 15, 1964, and Aurora 0. Santos, with Res. Cert. No. A-4500028 issued at
Paranaque, Rizal, on Jan. 9, 1964, giving her marital consent to this instrument, both of whom
are known to me and to me known to be the same persons who executed the foregoing
instruments and they acknowledged to me that the same is their free act and voluntary deed.
IN WITNESS WHEREOF, I have hereunto signed this instrument and affixed my notarial seal this
lst day of October, 1964, in Pasig, Rizal, Philippines.
Doc. No. 1792; Page No. 85; Book No. 19; Series of 1964.
s/ FLORENCIO LANDRITO t/ FLORENCIO LANDRITO
NOTARY PUBLIC Until December 31, 1965 2
Plaintiff claimed fulfillment of the conditions for the execution of the Deed of Confirmation of Sale,
namely: the release of the title of the lot and the approval of the subdivision plan of said lot by the
Land Registration Commission. She even enumerated the titles with their corresponding land areas
derived by defendants from the aforesaid lot, to wit:
(a) TCT 203580 — 30,205 sq. meters
(b) TCT 203581 — 19, 790 sq. meters
 (c) TCT 167568 — 40,775 sq. meters
In a motion to dismiss, defendants pleaded, inter alia, the defenses of lack of jurisdiction of the
court a quo over the subject of the action and lack of cause of action allegedly because there was
no allegation as to the date of the approval of the subdivision plan, no specific statement that the
titles therein mentioned were curved out of Lot I and no clear showing when the demands were
made on the defendants. They likewise set up the defense of prescription allegedly because the
deed of sale was dated September 28, 1964 and supposedly ratified October 1, 1964 but the
complaint was filed only on January 14, 1974, a lapse of more than nine years when it should have
been filed within five years from 1964 in accordance with Article 1149, New Civil Code.
Defendant also claimed that the demand set forth in the complaint has been waived, abandoned or
otherwise extinguished. It is alleged that the deed of sale was "only an accommodation graciously
extended, out of close friendship between the defendants and the plaintiff and her casual business
partner in the buy and sell of real estate, one Erlinda Cortez;" 3 that in order to allay the fears of
plaintiff over the non-collection of the debt of Erlinda Cortez to plaintiff in various sums exceeding
P 2,000.00, defendants, who were in turn indebted to Erlinda Cortez in the amount of P 2,000.00,
voluntarily offered to transfer to plaintiff their inexistent but expectant right over the lot in
question, the same to be considered as part payment of Erlinda Cortez' indebtedness; that as Erlinda
Cortez later on paid her creditor what was then due, the deed of sale had in effect been
extinguished. Defendants thereby characterized the said deed of sale as a mere tentative
agreement which was never intended nor meant to be ratified by and acknowledged before a notary
public. In fact, they claimed that they never appeared before Notary Public Florencio Landrito.
Finally, defendants alleged that the claim on which the action or suit is founded is unenforceable
under the statute of frauds and that the cause or object of the contract did not exist at the time of
the transaction.
After an opposition and a reply were filed by the respective parties, the Court a quo resolved to
deny the motion to dismiss of defendants. Defendants filed their answer with counterclaim
interposing more or less the same defenses but expounding on them further. In addition, they
claimed that the titles allegedly derived by them from Lot 1 of Annex A or I were cancelled and/or
different from said Lot I and that the deed of sale was simulated and fictitious, plaintiff having paid
no amount to defendants; and that the deed was entrusted to plaintiff's care and custody on the
condition that the latter; (a) would secure the written consent of Erlinda Cortez to Annex A or I as
part payment of what she owed to plaintiff; (b) would render to defendants true accounting of
collections made from Erlinda showing in particular the consideration of 2,000.00 of Annex A or I
duly credited to Erlinda's account. 4
Plaintiff filed a reply and answer to counterclaim and thereafter a motion for summary judgment
and/or judgment on the pleadings on the ground that the defenses of defendants fail to tender an
issue or the same do not present issues that are serious enough to deserve a trial on the merits, 5
submitting on a later date the affidavit of merits. Defendants filed their corresponding opposition
to the motion for summary judgment and/or judgment on the pleadings. Not content with the
pleadings already submitted to the Court, plaintiff filed a reply while defendants filed a
supplemental opposition.
With all these pleadings filed by the parties in support of their respective positions, the Court a quo
still held in abeyance plaintiff's motion for summary judgment or judgment on the pleadings
pending the pre-trial of the case. At the pre-trial, defendants offered by way of compromise to pay
plaintiff the sum of P2,000.00, the consideration stated in the deed of sale. But the latter rejected
the bid and insisted on the delivery of the land to her. Thus, the pre-trial proceeded with the
presentation by plaintiff of Exhibits A to Q which defendants practically admitted, adopted as their
own and marked as Exhibits 1 to 17. In addition, the latter offered Exhibit 18, which was their reply
to plaintiff's letter of demand dated December 21, 1973.
From the various pleadings filed in this case by plaintiff, together with the annexes and affidavits as
well as the exhibits offered in evidence at the pre-trial, the Court a quo found the following facts as
having been duly established since defendant failed to meet them with countervailing evidence:
In February, 1964, Teofilo Custodia owner of a parcel of unregistered land with an area of
approximately 220,000 square meters in Barrio Sampaloc, Tanay, Rizal, hired Attorney Andres F.
Santos "to cause the survey of the above-mentioned property, to file registration proceedings in
court, to appear and represent him in all government office relative thereto, to advance all
expenses for surveys, taxes to the government, court fees, registration fees ... up to the
issuance of title in the name" of Custodia. They agreed that after the registration of the title in
Custodio's name, and "after deducting all expenses from the total area of the property,"
Custodio would assign and deliver to Santos "one-half (1/2) share of the whole property as
appearing in the certificate of title so issued." Exh. B or 2).
On March 22, 1964, Custodio's land was surveyed under plan Psu-226650 (Exh. D or 4). It was
divided into six (6) lots, one of which was a road lot. The total area of the property as surveyed
was 211,083 square meters. The respective areas of the lots were as follows:
Lot 1 181,420 square meters
Lot 2 7,238 square meters
Lot 3 7,305 square meters
Lot 4 5,655 square meters
Lot 5 5,235 square meters
Road Lot 6 4,230 square meters
TOTAL 211,083 square meters
xxx xxx xxx
On December 27, 1965, a decree of registration No. N-108022 was issued in Land Registration
Case No. N-5023, of the Court of First Instance of Rizal, LRC Record No. N-27513, in favor of Teofilo
Custodia married to Miguela Perrando resident of Tanay, Rizal. On March 23, 1966, Original
Certificate of Title No. 5134 (Exh. Q or 17) was issued to Custodio for Lots 1, 2, 3, 4 and 5, Psu-
206650, with a total area of 206,853 square meters. The areas of the five (5) lots were as follows:
Lot 1 181,420 square
meters
Lot 2 7,238 square meters
Lot 3 7,305 square meters
Lot 4 5,655 square meters
Lot 5 5,235 square meters
In April to May, 1966, a consolidation-subdivision survey (LRC) Pcs-5273 (Exh. E or 5) was made
on the above lots converting them into six (6) new lots as follows:
 xxx xxx xxx (Exh. L or 12)
90,775 sq.m.
Lot 1 20,000 square meters
Lot 2 40,775 square meters plus one-half of the road lot, Lot 6, PCS-5273, with an area of 5,303 square meters, which is
Lot 3 50,000 square meters registered jointly in the name of Santos and Custodio (Exh. B & E) 6
Lot 4 40,775 square meters
Lot 5 50,000 square meters The court a quo thereupon concluded that there are no serious factual issues involved so the motion
Road Lot 6 5,303 square meters for summary judgment may be properly granted. Thereafter, it proceeded to dispose of the legal
TOTAL 206,853 square meters issues raised by defendants and rendered judgment in favor of plaintiff. The dispositive portion of
the decision states as follows:
On June 22, 1966, the consolidation-subdivision plan (LRC) Pcs-5273 (Exh. E or 5) was approved by
the Land Registration Commission and by the Court of First Instance of Rizal in an order dated July WHEREFORE, defendants Andres F. Santos and Aurora Santos are ordered to execute and convey
2, 1966 (Entry No. 61037 T-167561, Exh. Q). Upon its registration, Custodio's O.C.T. No. 5134 (Exh. to plaintiff Amparo del Rosario, within ten (10) days from the finality of this decision, 20,000
Q) was cancelled and TCT Nos. 167561, 167562, 167563, 167564 (Exh. G), 167565 (Exh. H and square meters of land to be taken from the southeastern portion of either Lot 4, Pcs-5273, which
167566 were issued for the six lots in the name of Custodio (Entry No. 61035, Exh. Q). has an area of 40,775 square meters, described in TCT No. 167568 (Exh. I or 9) of from their LOL
5-A. with an area of 30,205 square meters, described in TCI No. 203; O (Exh. K or 11). The expenses
On June 23, 1966, Custodio conveyed to Santos Lots 4 and 5, Pcs-5273 with a total area of 90,775 of segregating the 20,000 square meters portion shall be borne fqually by the parties. rhe
square meters (Exh. B or 2) described in Custodio's TCT No. 167564 (Exh. G or 7) and TCT No. 167565 expenses for the execution and registration of the sale shall be borne by the defendants (Art.
(Exh. H or 8), plus a one-half interest in the Road Lot No. 6, as payment of Santos' attorney's fees 1487, Civil Code). Since the defendants compelled the plaintiff to litigate and they failed to heed
and advances for the registration of Custodio's land. plainliff's just demand, they are further ordered to pay the plaintiff the sum of P2,000.00 as
attorney's fees and the costs of this action.
Upon registration of the deed of conveyance on July 5, 1966, Custodio's TCT Nos. 167564 and
167565 (Exhs. G and H) were cancelled. TCT No. 167568 (Exh. I or 9) for Lot 4 and TCT No. 167585 SO ORDERED. 7
(Exh. J or 10) for Lot 5 were issued to Santos.
Aggrieved by the aforesaid decision, the defendant's filed all appeal to the Court of Appeals
On September 2, 1967, Santos' Lot 5, with an area of 50,000 square meters was subdivided into two submitting for resolution seven assignments of errors, to wit:
(2) lots, designated as Lots 5-A and 5-B in the plan Psd-78008 (Exh. F or 6), with the following areas:
I. The lower court erred in depriving the appellants of their right to the procedural due process.
Lot 5-A 30,205 square meters
Lot 5-B 19,795 square meters II. The lower court erred in holding that the appellee's claim has not been extinguished.
TOTAL 50,000 square meters
III. The lower court erred in sustaining appellee's contention that there are no other unwritten
Upon registration of Psd-78008 on October 3, 1967, Santos' TCT No. 167585 (Exh. J) was cancelled conditions between the appellants and the appellee except those express in Exh. "1" or "A", and
and TCT No. 203578 for Lot 5- A and TCT No. 203579 for Lot 5-B were supposed to have been issued that Erlinda Cortez' conformity is not required to validate the appellants' obligation.
to Santos (See Entry 6311 in Exh. J or 10). Actually, TCT No. 203580 was issued for Lot 5-A (Exh. K or
1 1), and TCT No. 203581 for Lot 5-B (Exh. L or 12), both in the name of Andres F. Santos.
IV. The lower court erred in holding that Exh. "l" or "A" is not infirmed and expressed the true
intent of the parties.
Out of Custodio's original Lot 1, Psu-206650, with an area of 181,420 square meters, Santos was
given a total of 90,775 square meters, registered in his name as of October 3, 1967 under three (3)
V. The lower court erred in declaring that the appellants are co-owners of the lone registered
titles, namely:
owner Teofilo Custodia.

TCT No. 167585 for

VI. The lower court erred in ordering the appellants to execute and convey to the appellee 20,000
Lot 4 Pcs-5273 40,775 sq. m.
sq. m. of land to be taken from the southeastern portion of either their lot 4, Pcs-5273, which has
(Exh. J or 10)
an area of 40,775 sq.m., described in T.C.T. No. 167568 (Exh. 9 or 1), or from their lot No. 5-A,
TCT No. 203580 for
with an area of 30,205 sq.m. described in T.C.T. No. 203580 (Exh. 11 or K), the expenses of
Lot 5-A Psd-78008 30,205 sq. m.
segregation to be borne equally by the appellants and the appellee and the expenses of execution
(Exh. K or 11)
and registration to be borne by the appellants.
TCT No. 203581 for
Lot 5-B Psd-78008 19,795 sq. m.
 VII. Thelowercourterredinorderingtheappellantstopayto the appellee the sum of P2,000. 00 as
attorney's fee and costs. 8
The first four revolve on the issue of the propriety of the rendition of summary judgment by the
court a quo, which concededly is a question of law. The last three assail the summary judgment
itself. Accordingly, the Court of Appeals, with whom the appeal was filed, certified the records of
the case to this Court for final determination.
appellee in the amount of P14,160.00, the P2,000.00 intended to be paid by appellant included; and
(3) that said Erlinda decided to forego, renounce and refrain from collecting the P2,000.00 the
appellants owed her as a countervance reciprocity of the countless favors she also owes them.
Being conditions which alter and vary the terms of the deed of sale, such conditions cannot,
however, be proved by parol evidence in view of the provision of Section 7, Rule 130 of the Rules of
Court which states as follows:

For appellants herein, the rendition of summary judgment has deprived them of their right to Sec. 7. Evidence of written agreements when the terms of an agreement have been reduced to
procedural due process. They claim that a trial on the merits is indispensable in this case inasmuch writing, it is to be considered as containing all such terms, and, therefore, there can be, between
as they have denied under oath all the material allegations in appellee's complaint which is based the parties and their successors in interest, no evidence of the terms of the agreement other than
on a written instrument entitled "Deed of Sale", thereby putting in issue the due execution of said the contents of the writing, except in the following cases:
deed.
(a) Where a mistake or imperfection of the writing, or its failure to express the true intent and
Appellants in their opposition to the motion for summary judgment and/or judgment on the agreement of the parties, or the validity of the agreement is put in issue by the pleadings;
pleadings, however, do not deny the genuineness of their signatures on the deed of sale.
(b) When there is an intrinsic ambiguity in the writing. The term "agreement" includes wills."
(Par. 3 of said Motion, p. 101, Record on Appeal). They do not contest the words and figures in said
deed except in the acknowledgment portion thereof where certain words were allegedly cancelled The parol evidence rule forbids any addition to or contradiction of the terms of a written instrument
and changed without their knowledge and consent and where, apparently, they appeared before by testimony purporting to show that, at or before the signing of the document, other or different
Notary Public Florencio Landrito when, in fact, they claimed that they did not. In effect, there is an terms were orally agreed upon by the parties. 12
admission of the due execution and genuineness of the document because by the admission of the
due execution of a document is meant that the party whose signature it bears admits that
While it is true, as appellants argue, that Article 1306 of the New Civil Code provides that "the
voluntarily he signed it or that it was signed by another for him and with his authority; and the
contracting parties may establish such stipulations, clauses, terms and conditions as they may deem
admission of the genuineness of the document is meant that the party whose signature it bears
convenient, provided that they are not contrary to law, morals, good customs, public order, or
admits that at the time it was signed it was in the words and figures exactly as set out in the pleading
public policy" and that consequently, appellants and appellee could freely enter into an agreement
of the party relying upon it; and that any formal requisites required by law, such as swearing and
imposing as conditions thereof the following: that appellee secure the written conformity of Erlinda
acknowledgment or revenue stamps which it requires, are waived by him. 9
Cortez and that she render an accounting of all collections from her, said conditions may not be
proved as they are not embodied in the deed of sale.
As correctly pointed out by the court a quo, the alleged false notarization of the deed of sale is of
no consequence. For a sale of real property or of an interest therein to be enforceable under the
The only conditions imposed for the execution of the Deed of Confirmation of Sale by appellants in
Statute of Frauds, it is enough that it be in writing. 10 It need not be notarized. But the vendee may
favor of appellee are the release of the title and the approval of the subdivision plan. Thus,
avail of the right under Article 1357 of the New Civil Code to compel the vendor to observe the form
appellants may not now introduce other conditions allegedly agreed upon by them because when
required by law in order that the instrument may be registered in the Registry of Deeds. 11 Hence,
they reduced their agreement to writing, it is presumed that "they have made the writing the only
the due execution and genuineness of the deed of sale are not really in issue in this case.
repository and memorial of truth, and whatever is not found in the writing must be understood to
Accordingly, assigned error I is without merit.
have been waived and abandoned." 13

What appellants really intended to prove through the alleged false notarization of the deed of sale
Neither can appellants invoke any of the exceptions to the parol evidence rule, more particularly,
is the true import of the matter, which according to them, is a mere tentative agreement with
the alleged failure of the writing to express the true intent and agreement of the parties. Such an
appellee. As such, it was not intended to be notarized and was merely entrusted to appellee's care
exception obtains where the written contract is so ambiguous or obscure in terms that the
and custody in order that: first, the latter may secure the approval of one Erlinda Cortez to their
contractual intention of the parties cannot be understood from a mere reading of the instrument.
(appellants') offer to pay a debt owing to her in the amount of P2,000.00 to appellee instead of
In such a case, extrinsic evidence of the subject matter of the contract, of the relations of the parties
paying directly to her as she was indebted to appellee in various amounts exceeding P2,000.00; and
to each other, and of the facts and circumstances surrounding them when they entered into the.
second once the approval is secured, appellee would render an accounting of collections made from
contract may be received to enable the court to make a proper interpretation of the instrumental.
Erlinda showing in particular the consideration of P2,000.00 of the deed of sale duly credited to 14 In the case at bar, the Deed of Sale (Exh. A or 1) is clear, without any ambiguity, mistake or
Erlinda's account.
imperfection, much less obscurity or doubt in the terms thereof. We, therefore, hold and rule that
assigned errors III and IV are untenable.
According to appellants, they intended to prove at a full dress trial the material facts: (1) that the
aforesaid conditions were not fulfilled; (2) that Erlinda Cortez paid her total indebtedness to
According to the court a quo, "(s)ince Santos, in his Opposition to the Motion for Summary deed of sale in favor of appellee, the said sale may be valid as there can be a sale of an expected
Judgment failed to meet the plaintiff's evidence with countervailing evidence, a circumstance thing, in accordance with Art. 1461, New Civil Code, which states:
indicating that there are no serious factual issues involved, the motion for summary judgment may
properly be granted." We affirm and sustain the action of the trial court. Art. 1461. Things having a potential existence may be the object of the contract of sale.

Indeed, where a motion for summary judgment and/or judgment on the pleadings has been filed, The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that
as in this case, supporting and opposing affidavits shall be made on personal knowledge, shall set the thing will come into existence.
forth such facts as may be admissible in evidence, and shall show affirmatively that the affiant is
competent to testify as to the matters stated therein. Sworn or certified copies of all papers or parts
The sale of a vain hope or expectancy is void.
thereof referred to in the affidavit shall be attached thereto or served therewith. 15

Examining the pleadings, affidavits and exhibits in the records, We find that appellants have not
submitted any categorical proof that Erlinda Cortez had paid the P2,000.00 to appellee, hence,
appellants failed to substantiate the claim that the cause of action of appellee has been
extinguished. And while it is true that appellants submitted a receipt for P14,160.00 signed by
appellee, appellants, however, have stated in their answer with counterclaim that the P2,000.00
value of the property covered by the Deed of Sale, instead of being credited to Erlinda Cortez, was
conspicuously excluded from the accounting or receipt signed by appellee totalling P14,160.00. The
aforesaid receipt is no proof that Erlinda Cortez subsequently paid her P2,000.00 debt to appellee.
As correctly observed by the court a quo, it is improbable that Cortez would still pay her debt to
appellee since Santos had already paid it.
Appellants' claim that their P2,000.00 debt to Erlinda Cortez had been waived or abandoned is not
also supported by any affidavit, document or writing submitted to the court. As to their allegation
that the appellee's claim is barred by prescription, the ruling of the trial court that only seven years
and six months of the ten-year prescription period provided under Arts. 1144 and 155 in cases of
actions for specific performance of the written contract of sale had elapsed and that the action had
not yet prescribed, is in accordance with law and, therefore, We affirm the same.
In the case at bar, the expectant right came into existence or materialized for the appellants actually
derived titles from Lot I .
We further reject the contention of the appellants that the lower court erred in ordering the
appellants to execute and convey to the appellee 20,000 sq.m. of land to be taken from the
southeastern portion of either their Lot 4, Pcs-5273, which has an area of 40,775 sq.m., described
in T.C.T. No. 167568 (Exh. 9 or 1), or from their Lot No. 5-A, with an area of 30,205 sq.m. described
in T.C.T. No. 203580 (Exh. 11 or K), the expenses of segregation to be borne equally by the appellants
and the appellee and the expenses of execution and registration to be borne by the appellants.
Their argument that the southeastern portion of Lot 4 or Lot 5-A is no longer the southeastern
portion of the bigger Lot 1, the latter portion belonging to the lone registered owner, Teofilo
Custodia is not impressed with merit. The subdivision of Lot I between the appellants and Teofilo
Custodio was made between themselves alone, without the intervention, knowledge and consent
of the appellee, and therefore, not binding upon the latter. Appellants may not violate nor escape
their obligation under the Deed of Sale they have agreed and signed with the appellee b3 simply
subdividing Lot 1, bisecting the same and segregating portions to change their sides in relation to
the original Lot 1.

Finally, considering the trial court's finding that the appellants compelled the appellee to litigate
The action of the court a quo in rendering a summary judgment has been taken in faithful
and they failed to heed appellee's just demand, the order of the court awarding the sum of
compliance and conformity with Rule 34, Section 3, Rules of Court, which provides that "the
P2,000.00 as attorney's fees is just and lawful, and We affirm the same.
judgment sought shall be rendered forthwith if the pleadings, depositions, and admissions on file
together with the affidavits, show that, except as to the amount of damages, there is no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. WHEREFORE, IN VIEW OF THE FOREGOING, the judgment appealed from is hereby AFFIRMED in
" toto, with costs against the appellants.

Resolving assignments of errors, V, VI, and VII which directly assail the summary judgment, not the SO ORDERED.
propriety of the rendition thereof which We have already resolved to be proper and correct, it is
Our considered opinion that the judgment of the court a quo is but a logical consequence of the
failure of appellants to present any bona fide defense to appellee's claim. Said judgment is simply
the application of the law to the undisputed facts of the case, one of which is the finding of the
court a quo, to which We agree, that appellants are owners of one-half (1/2) interest of Lot I and,
therefore, the fifth assignment of error of appellants is without merit.

By the terms of the Deed of Sale itself, which We find genuine and not infirmed, appellants declared
themselves to be owners of one-half (1/2) interest thereof. But in order to avoid appellee's claim,
they now contend that Plan Psu-206650 where said Lot I appears is in the exclusive name of Teofilo
Custodio as the sole and exclusive owner thereof and that the deed of assignment of one-half (1/2)
interest thereof executed by said Teofilo Custodio in their favor is strictly personal between them.
Notwithstanding the lack of any title to the said lot by appellants at the time of the execution of the
LEGFORMS – ADMISSIBILITY OF DOCS
G.R. NO. 140608 September 23, 2004
PERMANENT SAVINGS AND LOAN BANK, petitioner,
vs.
MARIANO VELARDE, respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
In a complaint for sum of money filed before the Regional Trial Court of Manila (Branch 37),
docketed as Civil Case No. 94-71639, petitioner Permanent Savings and Loan Bank sought to recover
from respondent Mariano Velarde, the sum of ₱1,000,000.00 plus accrued interests and penalties,
based on a loan obtained by respondent from petitioner bank, evidenced by the following: (1)
promissory note dated September 28, 1983;1 (2) loan release sheet dated September 28, 1983;2 and
(3) loan disclosure statement dated September 28, 1983.3 Petitioner bank, represented by its
Deputy Liquidator after it was placed under liquidation, sent a letter of demand to respondent on
July 27, 1988, demanding full payment of the loan.4 Despite receipt of said demand letter,5
respondent failed to settle his account. Another letter of demand was sent on February 22, 1994, 6
and this time, respondent’s counsel replied, stating that the obligation "is not actually existing but
covered by contemporaneous or subsequent agreement between the parties …"7
In his Answer, respondent disclaims any liability on the instrument, thus:
2. The allegations in par. 2, Complaint, on the existence of the alleged loan of ₱1-Million, and the
purported documents evidencing the same, only the signature appearing at the back of the
promissory note, Annex "A" seems to be that of herein defendant. However, as to any liability
arising therefrom, the receipt of the said amount of P1-Million shows that the amount was
received by another person, not the herein defendant. Hence, no liability attaches and as further
stated in the special and affirmative defenses that, assuming the promissory note exists, it does
not bind much less is there the intention by the parties to bind the herein defendant. In other
words, the documents relative to the loan do not express the true intention of the parties. 8
Respondent’s Answer also contained a denial under oath, which reads:
I, MARIANO Z. VELARDE, of age, am the defendant in this case, that I caused the preparation of
the complaint and that all the allegations thereat are true and correct; that the promissory note
sued upon, assuming that it exists and bears the genuine signature of herein defendant, the same
does not bind him and that it did not truly express the real intention of the parties as stated in
the defenses; …9
During pre-trial, the issues were defined as follows:
1. Whether or not the defendant has an outstanding loan obligation granted by the plaintiff;
2. Whether or not the defendant is obligated to pay the loan including interests and attorney’s
fees;
3. Whether or not the defendant has really executed the Promissory Note considering the doubt
as to the genuineness of the signature and as well as the non-receipt of the said amount;
4. Whether or not the obligation has prescribed on account of the lapse of time from date of
execution and demand for enforcement; and
5. Whether or not the defendant is entitled to his counterclaim and other damages.10
On September 6, 1995, petitioner bank presented its sole witness, Antonio Marquez, the Assistant
Department Manager of the Philippine Deposit Insurance Corporation (PDIC) and the designated
Deputy Liquidator for petitioner bank, who identified the Promissory Note11 dated September 28,
1983, the Loan Release Sheet12 dated September 28, 1983, and the Disclosure Statement of Loan
Credit Transaction.13
After petitioner bank rested its case, respondent, instead of presenting evidence, filed with leave of
court his demurrer to evidence, alleging the grounds that:
(a) PLAINTIFF FAILED TO PROVE ITS CASE BY PREPONDERANCE OF EVIDENCE.
(b) THE CAUSE OF ACTION, CONCLUDING ARGUENTI THAT IT EXISTS, IS BARRED BY PRESCRIPTION
AND/OR LACHES.14
The trial court, in its Decision dated January 26, 1996, found merit in respondent’s demurrer to
evidence and dismissed the complaint including respondent’s counterclaims, without
pronouncement as to costs.15
On appeal, the Court of Appeals agreed with the trial court and affirmed the dismissal of the
complaint in its Decision16 dated October 27, 1999.17 The appellate court found that petitioner failed
to present any evidence to prove the existence of respondent’s alleged loan obligations, considering
that respondent denied petitioner’s allegations in its complaint. It also found that petitioner bank’s
cause of action is already barred by prescription. 18
Hence, the present petition for review on certiorari under Rule 45 of the Rules Court, with the
following assignment of errors:
4.1
THE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER FAILED TO ESTABLISH THE
GENUINENESS, DUE EXECUTION AND AUTHENTICITY OF THE SUBJECT LOAN DOCUMENTS.
4.2
THE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER’S CAUSE OF ACTION IS ALREADY
BARRED BY PRESCRIPTION AND OR LACHES.19
Before going into the merits of the petition, the Court finds it necessary to reiterate the well-settled
rule that only questions of law may be raised in a petition for review on certiorari under Rule 45 of
the Rules of Court, as "the Supreme Court is not a trier of facts." 20 It is not our function to review,
examine and evaluate or weigh the probative value of the evidence presented.21
There are, however, exceptions to the rule, e.g., when the factual inferences of the appellate court
are manifestly mistaken; the judgment is based on a misapprehension of facts; or the CA manifestly
overlooked certain relevant and undisputed facts that, if properly considered, would justify a
different legal conclusion.22 This case falls under said exceptions.
The pertinent rule on actionable documents is found in Rule 8, Section 7 of the Rules of Court which
provides that when the cause of action is anchored on a document, the genuineness or due
execution of the instrument shall be deemed impliedly admitted unless the defendant, under oath,
specifically denies them, and sets forth what he claims to be the facts.
It was the trial court’s opinion that:
The mere presentation of supposed documents regarding the loan, but absent the testimony of
a competent witness to the transaction and the documentary evidence, coupled with the denial
of liability by the defendant does not suffice to meet the requisite preponderance of evidence in
civil cases. The documents, standing alone, unsupported by independent evidence of their
existence, have no legal basis to stand on. They are not competent evidence. Such failure leaves
this Court without ample basis to sustain the plaintiff’s cause of action and other reliefs prayed
for. The loan document being challenged. (sic) Plaintiff did not exert additional effort to
strengthen its case by the required preponderance of evidence. On this score, the suit must be
dismissed.23
The Court of Appeals concurred with the trial court’s finding and affirmed the dismissal of the
complaint, viz.:
… The bank should have presented at least a single witness qualified to testify on the existence
and execution of the documents it relied upon to prove the disputed loan obligations of Velarde.
… This falls short of the requirement that (B)efore any private writing may be received in evidence,
its due execution and authenticity must be proved either: (a) By anyone who saw the writing
executed; (b) By evidence of the genuineness of the handwriting of the maker; or (c) By a
subscribing witness. (Rule 132, Sec. 21, Rules of Court) …
It is not true, as the Bank claims, that there is no need to prove the loan and its supporting papers
as Velarde has already admitted these. Velarde had in fact denied these in his responsive
pleading. And consistent with his denial, he objected to the presentation of Marquez as a witness
to identify the Exhibits of the Bank, and objected to their admission when these were offered as
evidence. Though these were grudgingly admitted anyway, still admissibility of evidence should
not be equated with weight of evidence. …24
A reading of respondent’s Answer, however, shows that respondent did not specifically deny that
he signed the loan documents. What he merely stated in his Answer was that the signature
appearing at the back of the promissory note seems to be his. Respondent also denied any liability
on the promissory note as he allegedly did not receive the amount stated therein, and the loan
documents do not express the true intention of the parties. 25 Respondent reiterated these
allegations in his "denial under oath," stating that "the promissory note sued upon, assuming that
it exists and bears the genuine signature of herein defendant, the same does not bind him and
that it did not truly express the real intention of the parties as stated in the defenses …"26
Respondent’s denials do not constitute an effective specific denial as contemplated by law. In the
early case of Songco vs. Sellner,27 the Court expounded on how to deny the genuineness and due
execution of an actionable document, viz.:
… This means that the defendant must declare under oath that he did not sign the document or
that it is otherwise false or fabricated. Neither does the statement of the answer to the effect
that the instrument was procured by fraudulent representation raise any issue as to its
genuineness or due execution. On the contrary such a plea is an admission both of the
genuineness and due execution thereof, since it seeks to avoid the instrument upon a ground not
affecting either.
In fact, respondent’s allegations amount to an implied admission of the due execution and
genuineness of the promissory note. The admission of the genuineness and due execution of a
document means that the party whose signature it bears admits that he voluntarily signed the
document or it was signed by another for him and with his authority; that at the time it was signed
it was in words and figures exactly as set out in the pleading of the party relying upon it; that the
document was delivered; and that any formalities required by law, such as a seal, an
acknowledgment, or revenue stamp, which it lacks, are waived by him.28 Also, it effectively
eliminated any defense relating to the authenticity and due execution of the document, e.g., that
the document was spurious, counterfeit, or of different import on its face as the one executed by
the parties; or that the signatures appearing thereon were forgeries; or that the signatures were
unauthorized.29
Clearly, both the trial court and the Court of Appeals erred in concluding that respondent specifically
denied petitioner’s allegations regarding the loan documents, as respondent’s Answer shows that
he failed to specifically deny under oath the genuineness and due execution of the promissory note
and its concomitant documents. Therefore, respondent is deemed to have admitted the loan
documents and acknowledged his obligation with petitioner; and with respondent’s implied
admission, it was not necessary for petitioner to present further evidence to establish the due
execution and authenticity of the loan documents sued upon.
While Section 22, Rule 132 of the Rules of Court requires that private documents be proved of their
due execution and authenticity before they can be received in evidence, i.e., presentation and
examination of witnesses to testify on this fact; in the present case, there is no need for proof of
execution and authenticity with respect to the loan documents because of respondent’s implied
admission thereof.30
Respondent claims that he did not receive the net proceeds in the amount of ₱988,333.00 as stated
in the Loan Release Sheet dated September 23, 1983.31 The document, however, bears respondent’s
signature as borrower.32 Res ipsa loquitur.33 The document speaks for itself. Respondent has already
impliedly admitted the genuineness and due execution of the loan documents. No further proof is
necessary to show that he undertook the obligation with petitioner. "A person cannot accept and
reject the same instrument."34
The Court also finds that petitioner’s claim is not barred by prescription.
Petitioner’s action for collection of a sum of money was based on a written contract and prescribes
after ten years from the time its right of action arose.35 The prescriptive period is interrupted when
there is a written extrajudicial demand by the creditors.36 The interruption of the prescriptive period
by written extrajudicial demand means that the said period would commence anew from the receipt
of the demand.37
Thus, in the case of The Overseas Bank of Manila vs. Geraldez,38 the Court categorically stated that
the correct meaning of interruption as distinguished from mere suspension or tolling of the
prescriptive period is that said period would commence anew from the receipt of the demand. In
said case, the respondents Valenton and Juan, on February 16, 1966, obtained a credit
accommodation from the Overseas Bank of Manila in the amount of ₱150,000.00. Written
extrajudicial demands dated February 9, March 1 and 27, 1968, November 13 and December 8,
1975 and February 7 and August 27, 1976 were made upon the respondents but they refused to
pay. When the bank filed a case for the recovery of said amount, the trial court dismissed the same
on the ground of prescription as the bank's cause of action accrued on February 16, 1966 (the date
of the manager's check for ₱150,000.00 issued by the plaintiff bank to the Republic Bank) and the
complaint was filed only on October 22, 1976. Reversing the ruling of the trial court, the Court ruled:
An action upon a written contract must be brought within ten years from the time the right of
action accrues (Art. 1144[1], Civil Code). "The prescription of actions is interrupted when they are
filed before the court, when there is a written extrajudicial demand by the creditors, and when
there is any written acknowledgment of the debt by the debtor" (Art. 1155, Ibid, applied in
Gonzalo Puyat & Sons, Inc. vs. City of Manila, 117 Phil. 985, 993; Philippine National Bank vs.
Fernandez, L-20086, July 10, 1967, 20 SCRA 645, 648; Harden vs. Harden, L-22174, July 21, 1967,
20 SCRA 706, 711).
A written extrajudicial demand wipes out the period that has already elapsed and starts anew the
prescriptive period. Giorgi says: "La interrupcion difiere de la suspension porque borra el tiempo
transcurrido anteriormente y obliga a la prescripcion a comenzar de nuevo" (9 Teoria de las
Obligaciones, 2nd Ed., p. 222). "La interrupcion . . . quita toda eficacia al tiempo pasado y abre
camino a un computo totalmente nuevo, que parte del ultimo momento del acto interruptivo,
precisamente, como si en aquel momento y no antes hubiese nacido el credito" (8 Giorgi, ibid pp.
390-2).
…
That same view as to the meaning of interruption was adopted in Florendo vs. Organo, 90 Phil.
483, 488, where it ruled that the interruption of the ten-year prescriptive period through a judicial
demand means that "the full period of prescription commenced to run anew upon the cessation
of the suspension". "When prescription is interrupted by a judicial demand, the full time for the
prescription must be reckoned from the cessation of the interruption" (Spring vs. Barr, 120 So.
256 cited in 54 C.J.S. 293, note 27). That rule was followed in Nator and Talon vs. CIR, 114 Phil.
661, Sagucio vs. Bulos, 115 Phil. 786 and Fulton Insurance Co. vs. Manila Railroad Company, L-
24263, November 18, 1967, 21 SCRA 974, 981.
… 37) dated January 26, 1996, and the Court of Appeals dated October 27, 1999 are SET ASIDE.
Interruption of the prescriptive period as meaning renewal of the original term seems to be the
basis of the ruling in Ramos vs. Condez, L-22072, August 30, 1967, 20 SCRA 1146, 1151. In that
case the cause of action accrued on June 25, 1952. There was a written acknowledgment by the
vendors on November 10, 1956 of the validity of the deed of sale.
… Costs against respondent.
In National Marketing Corporation vs. Marquez, L-25553, January 31, 1969, 26 SCRA 722, it appears
that Gabino Marquez executed on June 24, 1950 a promissory note wherein he bound himself to
pay to the Namarco ₱12,000 in installments within the one-year period starting on June 24, 1951
and ending on June 25, 1952. After making partial payments on July 7, 1951 and February 23, 1952,
Marquez defaulted.
His total obligation, including interest, as of October 31, 1964, amounted to ₱19,990.91. Written
demands for the payment of the obligation were made upon Marquez and his surety on March 22,
1956, February 16, 1963, June 10, September 18 and October 13, 1964. Marquez did not make any
further payment.
The Namarco sued Marquez and his surety on December 16, 1964. They contended that the action
had prescribed because the ten-year period for suing on the note expired on June 25, 1962. That
contention was not sustained. It was held that the prescriptive period was interrupted by the
written demands, copies of which were furnished the surety.
Respondent’s obligation under the promissory note became due and demandable on October 13,
1983. On July 27, 1988, petitioner’s counsel made a written demand for petitioner to settle his
obligation. From the time respondent’s obligation became due and demandable on October 13,
1983, up to the time the demand was made, only 4 years, 9 months and 14 days had elapsed. The
prescriptive period then commenced anew when respondent received the demand letter on August
5, 1988.39 Thus, when petitioner sent another demand letter on February 22, 1994,40 the action still
had not yet prescribed as only 5 years, 6 months and 17 days had lapsed. While the records do not
show when respondent received the second demand letter, nevertheless, it is still apparent that
petitioner had the right to institute the complaint on September 14, 1994, as it was filed before the
lapse of the ten-year prescriptive period.
Lastly, if a demurrer to evidence is granted but on appeal the order of dismissal is reversed, the
movant shall be deemed to have waived the right to present evidence.41 The movant who presents
a demurrer to the plaintiff’s evidence retains the right to present their own evidence, if the trial
court disagrees with them; if the trial court agrees with them, but on appeal, the appellate court
disagrees with both of them and reverses the dismissal order, the defendants lose the right to
present their own evidence. The appellate court shall, in addition, resolve the case and render
judgment on the merits, inasmuch as a demurrer aims to discourage prolonged litigations.42 Thus,
respondent may no longer offer proof to establish that he has no liability under the loan documents
sued upon by petitioner.
The promissory note signed and admitted by respondent provides for the loan amount of
₱1,000,000.00, to mature on October 13, 1983, with interest at the rate of 25% per annum. The
note also provides for a penalty charge of 24% per annum of the amount due and unpaid, and 25%
attorney’s fees. Hence, respondent should be held liable for these sums.
WHEREFORE, the petition is GRANTED. The Decisions of the Regional Trial Court of Manila (Branch
Respondent is ordered to pay One Million Pesos (₱1,000,000.00) plus 25% interest and 24% penalty
charge per annum beginning October 13, 1983 until fully paid, and 25% of the amount due as
attorney’s fees.
SO ORDERED.
LEGFORMS – ADMISSIBILITY OF DOCS
G.R. No. 129416 November 25, 2004
ZENAIDA B. TIGNO, IMELDA B. TIGNO and ARMI B. TIGNO, petitioners,
vs.
SPOUSES ESTAFINO AQUINO and FLORENTINA AQUINO and the HONORABLE COURT OF
APPEALS, respondents.
DECISION
TINGA, J.:
The controversy in the present petition hinges on the admissibility of a single document, a deed of
sale involving interest over real property, notarized by a person of questionable capacity. The
assailed ruling of the Court of Appeals, which overturned the findings of fact of the Regional Trial
Court, relied primarily on the presumption of regularity attaching to notarized documents with
respect to its due execution. We conclude instead that the document has not been duly notarized
and accordingly reverse the Court of Appeals.
The facts are as follow:
On 11 January 1980, respondent spouses Estafino and Florentina Aquino (the Aquinos) filed a
complaint for enforcement of contract and damages against Isidro Bustria (Bustria).1 The complaint
sought to enforce an alleged sale by Bustria to the Aquinos of a one hundred twenty thousand
(120,000) square meter fishpond located in Dasci, Pangasinan. The property was not registered
either under the Land Registration Act or under the Spanish Mortgage Law, though registrable
under Act No. 3344.2 The conveyance was covered by a Deed of Sale dated 2 September 1978.
Eventually, Bustria and the Aquinos entered into a compromise agreement, whereby Bustria agreed
to recognize the validity of the sale, and the Aquinos in turn agreed to grant to Bustria the right to
repurchase the same property after the lapse of seven (7) years.
Upon submission, the Court of First Instance of Pangasinan, Branch VII, approved and incorporated
the compromise agreement in a Decision which it rendered on 7 September 1981.
Bustria died in October of 1986.3 On 1 December 1989, petitioner Zenaida B. Tigno (Tigno), in
substitution of her deceased father Isidro Bustria,4 attempted to repurchase the property by filing a
Motion for Consignation. She deposited the amount of Two Hundred Thirty Thousand Pesos
(P200,000.00) with the trial court, now Regional Trial Court (RTC), Branch 55 at Alaminos,
Pangasinan. On 18 December 1989, the Aquinos filed an opposition, arguing that the right to
repurchase was not yet demandable and that Tigno had failed to make a tender of payment. In an
Order dated 10 October 1999, the RTC denied the Motion for Consignation.5
In June of 1991, Tigno filed a Motion for a Writ of Execution, which was likewise opposed by the
Aquinos, and denied by the RTC. Then, on 6 September 1991, Tigno filed an action for Revival of
Judgment,6 seeking the revival of the decision in Civil Case No. A-1257, so that it could be executed
accordingly.7 The Aquinos filed an answer, wherein they alleged that Bustria had sold his right to
repurchase the property to them in a deed of sale dated 17 October 1985.8
Among the witnesses presented by the Aquinos during trial were Jesus De Francia (De Francia), the
instrumental witness to the deed of sale, and former Judge Franklin Cariño (Judge Cariño), who
notarized the same. These two witnesses testified as to the occasion of the execution and signing
of the deed of sale by Bustria. Thereafter, in their Formal Offer of Documentary Evidence, the
Aquinos offered for admission as their Exhibit No. "8," the deed of sale (Deed of Sale)9 purportedly
executed by Bustria. The admission of the Deed of Sale was objected to by Tigno on the ground that
it was a false and fraudulent document which had not been acknowledged by Bustria as his own;
and that its existence was suspicious, considering that it had been previously unknown, and not
even presented by the Aquinos when they opposed Tigno's previous Motion for Consignation. 10
In an Order dated 6 April 1994, the RTC refused to admit the Deed of Sale in evidence. 11 A Motion
for Reconsideration praying for the admission of said exhibit was denied in an Order dated 27 April
1994.12
Then, on 18 August 1994, a Decision was rendered by the RTC in favor of Tigno. The RTC therein
expressed doubts as to the authenticity of the Deed of Sale, characterizing the testimonies of De
Francia and Cariño as conflicting.13 The RTC likewise observed that nowhere in the alleged deed of
sale was there any statement that it was acknowledged by Bustria;14 that it was suspicious that
Bustria was not assisted or represented by his counsel in connection with the preparation and
execution of the deed of sale15 or that Aquino had raised the matter of the deed of sale in his
previous Opposition to the Motion for Consignation.16 The RTC then stressed that the previous
Motion for Execution lodged by Tigno had to be denied since more than five (5) years had elapsed
from the date the judgment in Civil Case No. A-1257 had become final and executory; but the
judgment could be revived by action such as the instant complaint. Accordingly, the RTC ordered
the revival of the judgment dated 7 September 1981 in Civil Case No. A-1257.17
The Aquinos interposed an appeal to the Court of Appeals. 18 In the meantime, the RTC allowed the
execution pending appeal of its Decision. 19 On 23 December 1996, the Court of Appeals Tenth
Division promulgated a Decision20 reversing and setting aside the RTC Decision. The appellate court
ratiocinated that there were no material or substantial inconsistencies between the testimonies of
Cariño and De Francia that would taint the document with doubtful authenticity; that the absence
of the acknowledgment and substitution instead of a jurat did not render the instrument invalid;
and that the non-assistance or representation of Bustria by counsel did not render the document
null and ineffective.21 It was noted that a notarized document carried in its favor the presumption
of regularity with respect to its due execution, and that there must be clear, convincing and more
than merely preponderant evidence to contradict the same. Accordingly, the Court of Appeals held
that the RTC erred in refusing to admit the Deed of Sale, and that the document extinguished the
right of Bustria's heirs to repurchase the property.
After the Court of Appeals denied Tigno's Motion for Reconsideration,22 the present petition was
filed before this Court. Tigno imputes grave abuse of discretion and misappreciation of facts to the
Court of Appeals when it admitted the Deed of Sale. He also argues that the appellate court should
have declared the Deed of Sale as a false, fraudulent and unreliable document not supported by any
consideration at all.
The general thrusts of the arguments posed by Tigno are factually based. As such, they could
normally lead to the dismissal of this Petition for Review. However, while this Court is not ordinarily
a trier of facts,23 factual review may be warranted in instances when the findings of the trial court
and the intermediate appellate court are contrary to each other.24 Moreover, petitioner raises a
substantial argument regarding the capacity of the notary public, Judge Cariño, to notarize the
document. The Court of Appeals was unfortunately silent on that matter, but this Court will take it
up with definitiveness.
The notarial certification of the Deed of Sale reads as follows:
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES)
PROVINCE OF PANGASINAN ) S.S.
MUNICIPALITY OF ALAMINOS )
SUBSCRIBED AND SWORN TO before me this 17th day of October 1985 at Alaminos, Pangasinan
both parties known to me to be the same parties who executed the foregoing instrument.
FRANKLIN CARIÑO
Ex-Officio Notary Public
Judge, M.T.C.
Alaminos, Pangasinan
There are palpable errors in this certification. Most glaringly, the document is certified by way of a
jurat instead of an acknowledgment. A jurat is a distinct creature from an acknowledgment. An
acknowledgment is the act of one who has executed a deed in going before some competent officer
or court and declaring it to be his act or deed; while a jurat is that part of an affidavit where the
officer certifies that the same was sworn before him.25 Under Section 127 of the Land Registration
Act,26 which has been replicated in Section 112 of Presidential Decree No. 1529, 27 the Deed of Sale
should have been acknowledged before a notary public.28
But there is an even more substantial defect in the notarization, one which is determinative of this
petition. This pertains to the authority of Judge Franklin Cariño to notarize the Deed of Sale.
It is undisputed that Franklin Cariño at the time of the notarization of the Deed of Sale, was a sitting
judge of the Metropolitan Trial Court of Alaminos.29 Petitioners point out, citing Tabao v. Asis,30 that
municipal judges may not undertake the preparation and acknowledgment of private documents,
contracts, and other acts of conveyance which bear no relation to the performance of their
functions as judges.31 In response, respondents claim that the prohibition imposed on municipal
court judges from notarizing documents took effect only in December of 1989, or four years after
the Deed of Sale was notarized by Cariño.32
Respondent's contention is erroneous. Municipal Trial Court (MTC) and Municipal Circuit Trial Court
(MCTC) judges are empowered to perform the functions of notaries public ex officio under Section
76 of Republic Act No. 296, as amended (otherwise known as the Judiciary Act of 1948) and Section
242 of the Revised Administrative Code.33 However, as far back as 1980 in Borre v. Moya,34 the Court
explicitly declared that municipal court judges such as Cariño may notarize only documents
connected with the exercise of their official duties. 35 The Deed of Sale was not connected with any
official duties of Judge Cariño, and there was no reason for him to notarize it. Our observations as
to the errant judge in Borre are pertinent in this case, considering that Judge Cariño identified
himself in the Deed of Sale as "Ex-Officio Notary Public, Judge, MTC:"
[A notary ex officio] should not compete with private law practitioners or regular notaries in
transacting legal conveyancing business.
In the instant case, it was not proper that a city judge should notarize documents involving private
transactions and sign the document in this wise: "GUMERSINDO ARCILLA, Notary Public Ex-Officio,
City Judge" (p. 16, Rollo, Annex D of Complaint). In doing so, he obliterated the distinction between
a regular notary and a notary ex officio.36
There are possible grounds for leniency in connection with this matter, as Supreme Court Circular
No. I-90 permits notaries public ex officio to perform any act within the competency of a regular
notary public provided that certification be made in the notarized documents attesting to the lack
of any lawyer or notary public in such municipality or circuit. Indeed, it is only when there are no
lawyers or notaries public that the exception applies. 37 The facts of this case do not warrant a
relaxed attitude towards Judge Cariño's improper notarial activity. There was no such certification
in the Deed of Sale. Even if one was produced, we would be hard put to accept the veracity of its
contents, considering that Alaminos, Pangasinan, now a city,38 was even then not an isolated
backwater town and had its fair share of practicing lawyers.
There may be sufficient ground to call to task Judge Cariño, who ceased being a judge in 1986, for
his improper notarial activity. Perhaps though, formal sanction may no longer be appropriate
considering Judge Cariño's advanced age, assuming he is still alive. 39 However, this Decision should
again serve as an affirmation of the rule prohibiting municipal judges from notarizing documents
not connected with the exercise of their official duties, subject to the exceptions laid down in
Circular No. 1-90.
Most crucially for this case, we should deem the Deed of Sale as not having been notarized at all.
The validity of a notarial certification necessarily derives from the authority of the notarial officer.
If the notary public does not have the capacity to notarize a document, but does so anyway, then
the document should be treated as unnotarized. The rule may strike as rather harsh, and perhaps
may prove to be prejudicial to parties in good faith relying on the proferred authority of the notary
public or the person pretending to be one. Still, to admit otherwise would render merely officious
the elaborate process devised by this Court in order that a lawyer may receive a notarial
commission. Without such a rule, the notarization of a document by a duly appointed notary public
will have the same legal effect as one accomplished by a non-lawyer engaged in pretense.
The notarization of a document carries considerable legal effect. Notarization of a private document
converts such document into a public one, and renders it admissible in court without further proof
of its authenticity.40 Thus, notarization is not an empty routine; to the contrary, it engages public
interest in a substantial degree and the protection of that interest requires preventing those who
are not qualified or authorized to act as notaries public from imposing upon the public and the
courts and administrative offices generally.41
On the other hand, what then is the effect on the Deed of Sale if it was not notarized? True enough,
from a civil law perspective, the absence of notarization of the Deed of Sale would not necessarily
invalidate the transaction evidenced therein. Article 1358 of the Civil Code requires that the form
of a contract that transmits or extinguishes real rights over immovable property should be in a public
document, yet it is also an accepted rule that the failure to observe the proper form does not render
the transaction invalid. Thus, it has been uniformly held that the form required in Article 1358 is not
essential to the validity or enforceability of the transaction, but required merely for convenience.42
We have even affirmed that a sale of real property though not consigned in a public instrument or
formal writing, is nevertheless valid and binding among the parties, for the time-honored rule is that
even a verbal contract of sale or real estate produces legal effects between the parties.43
Still, the Court has to reckon with the implications of the lack of valid notarization of the Deed of
Sale from the perspective of the law on evidence. After all, the case rests on the admissibility of the
Deed of Sale.
Clearly, the presumption of regularity relied upon by the Court of Appeals no longer holds true since
the Deed of Sale is not a notarized document. Its proper probative value is governed by the Rules
of Court. Section 19, Rule 132 states:
Section 19. Classes of documents.—For the purpose of their presentation in evidence,
documents are either public or private.
Public documents are:
(a) 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;
(b) Documents acknowledged before a notary public except last wills and testaments; and
(c) Public records, kept in the Philippines, of private documents required by law to be entered
therein.
All other writings are private. (Emphasis supplied.)
The Deed of Sale, invalidly notarized as it was, does not fall under the enumeration of public
documents; hence, it must be considered a private document. The nullity of the alleged or
attempted notarization performed by Judge Cariño is sufficient to exclude the document in question
from the class of public documents. Even assuming that the Deed of Sale was validly notarized, it
would still be classified as a private document, since it was not properly acknowledged, but merely
subscribed and sworn to by way of jurat.
Being a private document, the Deed of Sale is now subject to the requirement of proof under Section
20, Rule 132, 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 Deed of Sale was offered in evidence as authentic by the Aquinos, who likewise insist that its
enforceability militates against Tigno's claim. Correspondingly, the burden falls upon the Aquinos
to prove its authenticity and due execution. The Court of Appeals clearly erred in not appreciating
the Deed of Sale as a private document and in applying the presumption of regularity that attaches
only to duly notarized documents, as distinguished from private documents.
Did the RTC err then in refusing to admit the Deed of Sale? We hold that it did not. Section 20, Rule
132 provides ample discretion on the trier of fact before it may choose to receive the private
document in evidence. The RTC wisely refused to admit the Deed of Sale, taking great lengths as it
did to explain its doubts as to its veracity. The RTC was not convinced of the proffered proof by the
Aquinos, and the exercise of its sound discretion as the primary trier of fact warrants due respect.
The most telling observation of the RTC relates to the fact that for the very first time respondents
alleged the existence of the Deed of Sale when they filed their answer to petitioner's current action
to revive judgment.44 Prior to the initiation of the present action, Tigno had tried to operationalize
and implement the Compromise Agreement through two judicial means: consignation and
execution of judgment. The Aquinos duly opposed these prior attempts of the petitioner to exercise
the right to repurchase, but they did not raise then the claim that such right to repurchase was
already extinguished by the Deed of Sale. Tigno attempted to exercise the right to repurchase only
a few years after the execution of the Deed of Sale to which respondents themselves were
signatories. Thus, it is incredulous that the Aquinos did not invoke the Deed of Sale when they
opposed in court petitioner's successive attempts at consignation and execution of judgment. The
Deed of Sale, if in existence and valid, would have already precluded Tigno's causes of action for
either consignation or execution of judgment. The only believable conclusion, as drawn by the RTC,
was that the Deed of Sale had yet to be created when petitioner moved in 1990 for consignation
and execution of judgment—an existential anomaly if we were to agree with the respondents that
such document had been signed and notarized back in 1985.
The dubiousness in origin of the Deed of Sale is not alleviated by the other observations of the RTC.
It also pointed to certain incredible aspects in the Aquinos' tale of events. It noted that no receipts
were ever presented by the respondents to evidence actual payment of consideration by them to
Bustria, despite the allegation of the respondents that the amount was covered by seven (7)
receipts.45 The Aquinos claimed that Bustria kept all the receipts, an assertion which the RTC found
as unbelievable, citing ordinary human nature to ask for receipts for significant amounts given and
to keep the same.46 In itself, the absence of receipts, or any proof of consideration, would not be
conclusive since consideration is always presumed. However, given the totality of the circumstances
surrounding this case, the absence of such proof further militates against the claims of the Aquinos.
We can appreciate in a similar vein the observation of the Court of Appeals that Bustria did not
bother to seek his lawyer's assistance as regards the execution of the Deed of Sale, considering that
the subject property had previously been fiercely litigated. Although the Court of Appeals was
correct in ruling that the document would not be rendered null or ineffective due to the lack of
assistance of counsel, the implausibility of the scenario strikes as odd and therefore reinforces the
version found by the RTC as credible.
The Court likewise has its own observations on the record that affirm the doubts raised by the Court
of Appeals. Isidro Bustria, who would die in 1986, was already ninety-three (93) years old when he
allegedly signed the Deed of Sale in 1985. Still, the Aquinos asserted before the RTC that Bustria
traveled unaccompanied from his home in Dasol, Pangasinan, passing through two towns to
Alaminos, to execute the Deed of Sale. Without discrediting the accomplishments of nonagenarians
capable of great physical feats, it should be acknowledged as a matter of general assumption that
persons of Bustria's age are typically sedentary and rarely so foolhardy as to insist on traveling
significant distances alone.
Also of note is the fact that there are glaring differences as to the alleged signature of Bustria on
the Deed of Sale and as it otherwise appears on the judicial record. Bustria's signature in the 1981
Compromise Agreement is noticeably shaky which is not surprising, considering that it was
subscribed when Bustria was eighty-nine (89) years old. However, Bustria's signature on the Deed
of Sale, which if genuine was affixed when he was already ninety-three (93) years old, is remarkably
steady in its strokes. There are also other evident differences between Bustria's signature on the
Deed of Sale and on other documents on the record.
Admittedly, these doubts cast above arise in chief from an appreciation of circumstantial evidence.
These have to be weighed against the findings of the Court of Appeals that the fact that Bustria
signed the Deed of Sale was established by the respective testimonies of witnesses De Francia and
Judge Cariño. In its own appreciation of these testimonies, the RTC alluded to notable
inconsistencies in their testimonies. As a final measure of analysis, the Court shall now examine
whether the appellate court was in error in reversing the conclusion of the RTC on these
testimonies.
The inconsistencies cited by the RTC were that De Francia testified that Judge Cariño himself
prepared and typed the Deed of Sale in his office, where the document was signed, 47 while Judge
Cariño testified that he did not type the Deed of Sale since it was already prepared when the parties
arrived at his office for the signing.48 On this point, the Court of Appeals stated with utter
nonchalance that a perusal of the record revealed no material or substantial inconsistencies
between the testimonies of Judge Cariño and De Francia.
Strangely, the appellate court made no comment as to the inconsistency pointed out by the RTC as
to who prepared the Deed of Sale. If the only point of consideration was the due execution of the
Deed of Sale, then the Court of Appeals should have properly come out with its finding. Other
variances aside, there are no contradictions in the testimonies of Judge Cariño and De Francia on
the question of whether or not Bustria signed the Deed of Sale.
However, as earlier established, the Deed of Sale is a private document. Thus, not only the due
execution of the document must be proven but also its authenticity. This factor was not duly
considered by the Court of Appeals. The testimonies of Judge Cariño and De Francia now become
material not only to establish due execution, but also the authenticity of the Deed of Sale. And on
this point, the inconsistencies pointed out by the RTC become crucial.
The matter of authenticity of the Deed of Sale being disputed, the identity of the progenitor of this
all-important document is a material evidentiary point. It is disconcerting that the very two
witnesses of the respondent offered to prove the Deed of Sale, flatly contradict each other on the
basis of their own personal and sensory knowledge. Worse, the purported author of the Deed of
Sale disavowed having drafted the document, notwithstanding the contrary testimony grounded on
personal knowledge by the documentary witness.
Establishing the identity of the person who wrote the Deed of Sale would not ordinarily be necessary
to establish the validity of the transaction it covers. However, since it is the authenticity of the
document itself that is disputed, then the opposing testimonies on that point by the material
witnesses properly raises questions about the due execution of the document itself. The
inconsistencies in the testimonies of Judge Cariño and De Francia are irreconcilable. It is not possible
to affirm the testimony of either without denigrating the competence and credibility of the other
as a witness. If Judge Cariño was truthful in testifying that he did not write the Deed of Sale, then
doubt can be cast as to the reliability of the notarial witness De Francia. It takes a leap of
imagination, a high level of gumption, and perverse deliberation for one to erroneously assert,
under oath and with particularities, that a person drafted a particular document in his presence.
However, if we were to instead believe De Francia, then the integrity of the notary public, Judge
Cariño, would be obviously compromised. Assuming that Judge Cariño had indeed authored the
Deed of Sale, it would indeed be odd that he would not remember having written the document
himself yet sufficiently recall notarizing the same. If his testimony as to authorship of the document
is deemed as dubious, then there is all the reason to make a similar assumption as to his testimony
on the notarization of the Deed of Sale.
These inconsistencies are not of consequence because there is need to indubitably establish the
author of the Deed of Sale. They are important because they cast doubt on the credibility of those
witnesses of the Aquinos, presented as they were to attest to the due execution and authenticity of
the Deed of Sale. The Court of Appeals was clearly in error in peremptorily disregarding this
observation of the RTC.
As a result, we are less willing than the Court of Appeals to impute conclusive value to the
testimonies of de Francia and Judge Cariño. The totality of the picture leads us to agree with the
trial court that the Deed of Sale is ineluctably dubious in origin and in execution. The Court deems
as correct the refusal of the RTC to admit the Deed of Sale, since its due execution and authenticity
have not been proven. The evidence pointing to the non-existence of such a transaction is so clear
and convincing that it is sufficient even to rebut the typical presumption of regularity arising from
the due execution of notarial documents. However, for the reasons stated earlier, the Deed of Sale
is ineluctably an unnotarized document. And the lower court had more than sufficient basis to
conclude that it is a spurious document.
Since the validity of the Deed of Sale has been successfully assailed, Tigno's right to repurchase was
not extinguished at the time of the filing of the Petition for revival of judgment, as correctly
concluded by the RTC. The Court of Appeals being in error when it concluded otherwise, the
reinstatement of the RTC Decision is warranted.
WHEREFORE, the Petition is GRANTED. The assailed Decision dated 23 December 1996 and
Resolution dated 9 June 1997 of the Court of Appeals in CA-G.R. CV No. 49879 is REVERSED, and the
Decision dated 18 August 1994 of the Regional Trial Court of Alaminos, Pangasinan, Branch 55, in
Civil Case No. A-1918 is REINSTATED. Costs against respondents.
SO ORDERED.
LEGFORMS – VALIDITY OF CONTRACTS
G.R. No. 148280 July 10, 2007
LORETA AGUSTIN CHONG, also known as LORETA GARCIA AGUSTIN, Petitioner,
vs.
THE HONORABLE COURT OF APPEALS, SPOUSES PEDRO and ROSITA DE GUZMAN and FORTUNE
DEVELOPMENT CORPORATION, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the September 14, 2000 Decision1 of the Court of
Appeals in CA-G.R. CV No. 47487, which affirmed the August 8, 1994 Decision2 of the Regional Trial
Court of Manila, Branch 7 in Civil Case No. 89-50138 dismissing petitioner’s complaint, and ordering
her to pay ₱50,000.00 as moral damages, ₱10,000.00 as attorney’s fees and costs of the suit, as well
as the May 28, 2001 Resolution which denied petitioner’s motion for reconsideration.
On August 25, 1989, petitioner Loreta Agustin Chong filed a Complaint3 for annulment of contracts
and recovery of possession against respondent-spouses Pedro and Rosita de Guzman, and Fortune
Development Corporation before the Regional Trial Court of Manila.
Petitioner alleged that she is the common-law wife of Augusto Chong; that on February 13, 1980,
she bought a parcel of land (subject lot) from respondent corporation as evidenced by Contract to
Sell No. 195, particularly described as follows:
"A parcel of land (Lot 1 Block 4, of the consolidation-subdivision plan (LRC) Pcs-18730, being a
portion of the consolidation of Lot 4522 and 4524, Parañaque Cadastre, Lots 1 & 2 (LRC) Psd-
169203) L.R.C. Rec. Nos. N-27442, N-27463, N-13960), situated in the Barrio of San Dionisio,
Province of Rizal, containing an area of TWO HUNDRED SIXTY SIX (266) square meters, more or less."
She further alleged that by virtue of a special power of attorney she executed in favor of Augusto,
the latter sold the subject lot to respondent-spouses under the Transfer of Rights and Assumption
of Obligation dated January 30, 1984 allegedly for ₱80,884.95 which petitioner or Augusto never
received, thus, said sale is null and void for lack of consideration; and that despite repeated
demands, respondent-spouses refused to turn over the possession of the subject lot to petitioner.
Petitioner likewise denied selling the house constructed on the subject lot to respondent-spouses
for ₱25,000.00, claiming that she could not have executed the Deed of Sale because at the time it
was allegedly notarized on February 24, 1987, she was working in Hong Kong as a domestic helper.
Thus, said sale is void for being a forgery. Petitioner alleged that despite repeated demands,
respondent-spouses refused to surrender the possession of the aforesaid house.
Petitioner also claimed that she is the owner of a house located at 1191 P. Zapanta, Singalong,
Manila; that without her knowledge and consent, respondent-spouses rented said house to other
persons and collected rent; and that despite repeated demands, respondent-spouses refused to
return the possession of the house as well as the rentals collected therefrom.
Petitioner prayed that the Transfer of Rights and Assumption of Obligation as well as the Deed of
Sale be declared null and void; that respondent-spouses be ordered to turn over the possession of
the houses and lots in Parañaque and Singalong to petitioner; and that respondents indemnify her
for actual, moral and exemplary damages as well as attorney’s fees.
Respondent-spouses moved to dismiss4 the complaint for failure to state a cause of action but it
was denied by the trial court. On December 11, 1989, respondent-spouses filed their Answer5 to
the Complaint while respondent corporation failed to file its answer within the reglementary period
hence, it was declared in default.
During the pre-trial, respondent-spouses orally moved for leave of court to file an amended answer
which was granted. On May 18, 1990, respondent-spouses filed their Amended Answer with
Counterclaim.6 Petitioner filed a Motion to Strike Out Amended Answer 7 alleging that no prior
written motion for leave to file amended answer was filed in violation of Section 3, Rule 10 of the
Rules of Court and that the amended answer contained substantial amendments, but same was
denied by the trial court in an Order8 dated July 16, 1990.
In their amended answer, respondent-spouses asserted that the Transfer of Rights and Assumption
of Obligation was supported by sufficient consideration; that they paid ₱125,000.00, and not
₱25,000.00 as alleged by petitioner, for the house on the subject lot; that the Deed of Sale over the
house constructed on the subject lot was signed by petitioner on February 22, 1987 while she was
still in the country but it was notarized only on February 24, 1987 or after she had left to work
abroad; that petitioner failed to allege or submit any actionable document to prove her claim of
ownership; that the house located in Singalong is owned by respondent-spouses; and that
petitioner’s complaint is malicious and baseless which entitles them to actual, moral, exemplary and
nominal damages, as well as attorney’s fees.
After trial on the merits, the trial court rendered a Decision finding thus:
The Court is convinced that the document entitled Transfer of Rights and Assumption of Obligation
is sufficiently supported by valuable consideration. The evidence presented by the [respondent-
spouses] has shown that for the house and lot [respondent-spouses] paid almost ₱480,000.00 and
this definitely is more than sufficient compensation for the house and lot in question. The Court
believes, considering the evidence on record, that [petitioner] on February 22, 1987 received the
amount of ₱25,000.00 from Pedro de Guzman before she left for Hongkong. Unfortunately, the
document was not notarized on that day but two days thereafter. The Court also believes that it
was the [respondent- spouses] who paid the sum of ₱105,000.00, the obligation of Augusto Chong
and [petitioner] to Rosario Cabelin and as a consequence, all the documents pertaining thereto
were given to the [respondent-spouses] by Rosario Cabelin. The Court also notes that [petitioner]
and Augusto Chong could not even agree as to who was indebted to Rosario Cabelin. [Petitioner]
tried to deny that she was indebted to Rosario Cabelin while Augusto Chong claimed that it was
[petitioner] who was indebted to Rosario.
The Court, therefore, considering those inconsistencies of the [petitioner] and her paramour refuses
to believe their testimonies.
On the other hand, the Court finds the testimony of [respondent Pedro de Guzman] and his
witnesses to be believable and consistent with the evidence received by it.
It is clear from the aforementioned discussion that [petitioner] has failed to prove by a
preponderance of evidence her causes of action against [respondents]. On the other hand,
[respondents] have shown the baselessness of the complaint filed by [petitioner].
WHEREFORE, premises considered, judgment is rendered for [respondents] by dismissing the
complaint and sentencing [petitioner] to pay the [respondents] ₱50,000.00 as moral damages plus
₱10,000.00 as attorney’s fees, plus costs of suit.9
Petitioner appealed to the Court of Appeals which rendered the assailed Decision affirming in toto
the decision of the trial court.
Hence, the instant petition.
Petitioner raises four issues, to wit: (1) whether the trial court erred in admitting respondent-
spouses’ amended answer in violation of Section 3, Rule 10 of the Rules of Court, (2) whether
petitioner was deprived of due process when during the pre-trial, respondent-spouses failed and
refused to furnish her copies of the documents that they intended to present, in violation of Section
6, Rule 18 of the Rules of Court, (3) whether the trial court erred in not finding that the Transfer of
Rights and Assumption of Obligation dated January 30, 1984 was void or, in the alternative,
unenforceable as against petitioner.
Petitioner claims that the trial court erred in granting respondent-spouses’ oral manifestation or
motion for leave to file an amended answer. She argues that respondent-spouses should have filed
a written motion for leave to file an amended answer, pursuant to Section 3,10 Rule 10 of the Rules
of Court. She argues that the purpose of the rule is to help the trial court determine whether the
proposed amendments constitute substantial amendments to their original answer and whether
the motion is intended to delay the proceedings, as well as to give the adverse party an opportunity
to be heard.
The contention lacks merit.
The trial court allowed respondent-spouses to amend their answer after it observed that their
original answer merely contained specific denials without clearly setting forth, as far as practicable,
the truth of the matter upon which they rely to support such denial as required under Section 10, 11
Rule 8 of the Rules of Court. Further, after denying the material allegations in the Complaint,
respondent-spouses merely stated in their original answer that "[a]ll other arguments embodied in
[their prior] motion to dismiss are reiterated as part of the special and affirmative defenses
herein."12 Under these conditions, the trial court justifiably deemed it necessary for respondent-
spouses to amend their answer in order to sufficiently clarify the issues to be tried and thereby
expedite the proceedings. In granting respondent-spouses’ motion to file an amended answer, the
trial court acted within its discretion pursuant to Section 2, Rule 18 of the Rules of Court:
SEC. 2. Nature and purpose. – The pre-trial is mandatory. The court shall consider:
xxxx
(c) The necessity or desirability of amendments to the pleadings;
Trial court allowed the filing of an amended answer to avoid multiplicity of suits, to determine the
real controversies between the parties and to decide the case on the merits without unnecessary
delay, all of which form the bases for the liberality of the rule in allowing amendments to
pleadings.13 This was in consonance with the basic tenet that the Rules of Court shall be liberally
construed to promote the just, speedy and inexpensive disposition of every action.14
Petitioner next asserts that during the pre-trial, respondent-spouses did not furnish her with copies
of the documents that they intended to present, in violation of Section 6,15 Rule 18 of the Rules of
Court. Petitioner claims that she was denied due process and that the trial court gave respondent-
spouses undue advantage during the trial of this case.
Petitioner’s contention lacks merit.
The records show that respondent-spouses’ Pre-Trial Brief16 dated April 10, 1990 enumerated the
documents to be presented during the trial as well as the purposes of their presentation. Although
copies of the documents enumerated therein were not attached to the Pre-Trial Brief, they were
nonetheless previously attached to respondent-spouses’ Motion To Dismiss17 dated September 8,
1989, Reply18 to petitioner’s opposition to the motion to dismiss dated September 25, 1989, and
Amended Answer With Counterclaim19 dated May 11, 1990, all of which were copy furnished to
petitioner. During trial, petitioner was afforded every opportunity to examine respondent-spouses’
documentary evidence, and to controvert the same. Petitioner even cross-examined respondent-
spouses on these documents at length and challenged their validity during the presentation of both
her evidence-in-chief and rebuttal evidence. Consequently, petitioner can not now claim that she
was denied due process and that she was unable to adequately prosecute her case.
Petitioner’s main contention rests on the alleged nullity or, in the alternative, unenforceability of
the Transfer of Rights and Assumption of Obligation dated January 30, 1984.
We agree with the findings of the lower courts that the parties voluntarily executed the Transfer of
Rights and Assumption of Obligation dated January 30, 1984 and that the same was supported by
valuable consideration. The evidence on record sufficiently established that on February 13, 1980,
petitioner bought the subject lot from respondent corporation under Contract to Sell No. 195 and
thereafter, began paying the stipulated monthly installments thereon. On April 18, 1983, she
executed a Special Power of Attorney20 in favor of Augusto Chong, granting the latter the power to
"mortgage, encumber, sell and dispose the property (subject lot) under such terms and conditions
which my said attorney (Augusto) may deem acceptable x x x" and "pay any/all my valid obligations
to the proper person/s x x x."21 On July 1, 1983, one Rosario Cabelin filed a complaint for sum of
money against petitioner and Augusto with the Regional Trial Court of Pasay City which was
docketed as Civil Case No. 1102-P. Under threat of preliminary attachment, petitioner, who was
then working as a domestic helper in Hong Kong, sought the assistance of respondent-spouses to
settle the case. Subsequently, Rosario, Augusto and petitioner, with Augusto acting as petitioner’s
attorney-in-fact, entered into a Compromise Agreement22 dated July 25, 1983 wherein petitioner
and Augusto agreed to pay the amount of ₱55,000.00 to Rosario. To guarantee the payment of the
remaining balance of the debt in the amount of ₱105,000.00, Augusto, again acting as petitioner’s
attorney-in-fact, executed a Deed of Sale with Right to Repurchase23 dated July 25, 1983 over the
subject lot in favor of Rosario in consideration of the aforesaid sum. In addition, Augusto,
respondent-spouses, Gualberto and Fe Arceta jointly and severally promised to pay the aforesaid
sum on or before July 24, 1984 under a Promissory Note24 dated July 24, 1983.
Sometime in December 1983, Rosario demanded payment of the remaining balance of the debt.
Respondent-spouses agreed to pay Rosario the amount of ₱105,000.00 provided petitioner will
transfer her rights over the subject lot to them. Thus, after respondent-spouses had paid Rosario,
Augusto, acting under the aforementioned Special Power of Attorney, executed a Transfer of Rights
and Assumption of Obligation25 dated January 30, 1984 in favor of respondent-spouses and with
the conformity of respondent corporation. Correspondingly, Rosario executed a Quitclaim26 in favor
of Augusto releasing him from the aforementioned Deed of Sale with Right to Repurchase and
Promissory Note. Thereafter, respondent-spouses paid the remaining monthly installments and
transferred the title over the subject lot in their names as evidenced by Transfer Certificate of Title
No. 129227 issued on January 21, 1988.
Petitioner asserts, however, that the Transfer of Rights and Assumption of Obligation is null and
void because it lacked valuable consideration. She claims that she executed the Special Power of
Attorney in favor of Augusto with the understanding that the subsequent transfer of the subject lot
to respondent-spouses would be merely simulated ("kunwarian").28 She claims that respondent-
spouses and her nieces enticed her into executing the Special Power of Attorney because Augusto
might sell the subject lot while petitioner is abroad and use the proceeds thereof to support his
children with his legal wife.29 Thus, petitioner agreed to execute the Special Power of Attorney in
favor of Augusto for the sole purpose of transferring the subject lot in the name of respondent-
spouses through a simulated sale.
We are not persuaded.
If petitioner believes that Augusto would appropriate the property during her absence, then she
should not have executed the Special Power of Attorney in his favor authorizing him to dispose of
the subject lot. If it was truly her intention to prevent Augusto from disposing the subject lot, then
she could have simply retained the rights over the subject lot in her name or directly transferred
the same to the name of respondent- spouses before she left for Hong Kong. Notably, when
petitioner was presented as a witness during the presentation of her rebuttal evidence, she claimed
that she executed the Special Power of Attorney to help her nieces, Gualberto and Fe Arceta, secure
a loan for the purported repair of the latter’s duplex house.30 Augusto was allegedly appointed as
petitioner’s attorney-in-fact so that the former could act as a co-maker of the loan.31 Unfortunately
for petitioner, these inconsistencies cast doubt on her credibility.
Petitioner’s claim that Augusto was not empowered to dispose of the subject lot in order to pay off
an alleged debt she owed to Rosario, is not worthy of belief. The clear and unmistakable tenor of
the Special Power of Attorney reveals that petitioner specifically authorized Augusto to sell the
subject lot and to settle her obligations to third persons. The Special Power of Attorney is a duly
notarized document and, as such, is entitled, by law, to full faith and credit upon its face. 32
Notarization vests upon the document the presumption of regularity unless it is impugned by
strong, complete and conclusive proof.33 Rather than challenging its validity, petitioner admitted in
open court that she signed the Special Power of Attorney with a full appreciation of its contents34
and without reservation.35
Petitioner likewise admitted that Rosario was her creditor when she was first presented as a witness
during the reception of evidence.36 Even petitioner’s own witness, Augusto, testified that petitioner
was indebted to Rosario due to a failed business venture involving a store in Baclaran, Manila. 37 In
her Letter38 dated February 6, 1984 to respondent- spouses, petitioner, likewise, admitted that she
was indebted to Rosario and sought the assistance of respondent-spouses to help pay off her debts.
In fine, the evidence on record sufficiently established that petitioner’s rights over the subject lot
were validly transferred to respondent-spouses in consideration of the latter’s payment of
petitioner’s debts to Rosario. When Augusto executed the Transfer of Rights and Assumption of
Obligations on behalf of petitioner, he was acting within his powers under the Special Power of
Attorney for valuable consideration. In a contract of agency, the agent acts in representation or in
behalf of another with the consent of the latter,39 and the principal is bound by the acts of his agent
for as long as the latter acts within the scope of his authority. 40 Hence, the Transfer of Rights and
Assumption of Obligations is valid and binding between the parties.
Lastly, petitioner impugns the jurisdiction of the Pasay City RTC in Civil Case No. 1102-P on the
ground that it never acquired jurisdiction over her person because summons were allegedly not
properly served on her, and that she never authorized Augusto to enter into the compromise
agreement in said case on her behalf. According to petitioner, she was in Hong Kong when the
collection suit was filed by Rosario against her and Augusto. In short, she assails the validity of the
judgment based on compromise agreement since the proceedings in Civil Case No. 1102-P were
presumably terminated after the parties entered into a Compromise Agreement dated July 25,
1983. She posits that all the documents signed by Augusto on her behalf, specifically, the
Compromise Agreement dated July 25, 1983, Deed of Sale with Right to Repurchase dated July 25,
1983, and Transfer of Rights and Assumption of Obligation dated January 30, 1984, are
unenforceable as against her.
Petitioner’s contention must likewise fail.
A judgment based on a compromise agreement is a judgment on the merits wherein the parties
have validly entered into stipulations and the evidence was duly considered by the trial court that
approved the agreement.41 It is immediately executory and not appealable unless set aside on
grounds of nullity under Article 203842 of the Civil Code,43 and has the effect of a judgment of the
court.44 Further, well-entrenched is the rule that a party may attack the validity of a final and
executory judgment through three ways:
The first is by petition for relief from judgment under Rule 38 of the Revised Rules of Court, when
judgment has been taken against the party through fraud, accident, mistake or excusable
negligence, in which case the petition must be filed within sixty (60) days after the petitioner learns
of the judgment, but not more than six (6) months after such judgment was entered. The second is
by direct action to annul and enjoin the enforcement of the judgment. This remedy presupposes
that the challenged judgment is not void upon its face, but is entirely regular in form, and the alleged
defect is one which is not apparent upon its face or from the recitals contained in the judgment. x x
x ‘under accepted principles of law and practice, long recognized in American courts, the proper
remedy in such case, after the time for appeal or review has passed, is for the aggrieved party to
bring an action enjoining the judgment, if not already carried into effect; or if the property has
already been disposed of, he may institute suit to recover it.’ The third is either a direct action, as
certiorari, or by a collateral attack against the challenged judgment (which is) void upon its face, or
that the nullity of the judgment is apparent by virtue of its own recitals. As aptly explained by Justice
Malcolm in his dissent in Banco Español-Filipino v. Palanca, supra, ‘A judgment which is void upon
its face, and which requires only an inspection of the judgment roll to demonstrate its want of
vitality is a dead limb upon the judicial tree, which should be lopped off, if the power so to do exists.’
In the case at bar, the want of jurisdiction of the Pasay RTC in Civil Case No. 1102-P due to the
alleged non-service of summons has not been established by petitioner. The judgment based on
compromise agreement made therein was likewise not established as being void upon its face.
Except for the self-serving allegation that she was in Hong Kong when the collection suit was filed,
petitioner did not present competent proof to prove that she was not properly served with
summons. Even if it were true that she was abroad when the collection suit was filed against her,
summons could still be served through extraterritorial service under Section 1645 in relation to
Section 15,46 of Rule 14 of the Rules of Court. Undeniably, the Pasay City RTC in Civil Case No. 1102-
P enjoys the presumption of regularity in the conduct of its official duties which was not fully
rebutted by petitioner.
Petitioner bewails that the records of Civil Case No. 1102-P was destroyed due to a fire that gutted
the Pasay City Hall Building on January 18, 1992 as evidenced by a Certification47 dated November
6, 2001 issued by the Office of the Clerk of Court, RTC, Pasay City. However, petitioner was not
without recourse considering that she could have filed a petition for the reconstitution of the
records of said case, and thereafter, sought the annulment of the judgment therein, if warranted.
The procedure for the reconstitution of records could have been done either under Act No. 3110,48
which is the general law that governs the reconstitution of judicial records, or under Section 5(h) 49
of Rule 135 of the Rules of Court which recognizes the inherent power of the courts to reconstitute
at any time the records of their finished cases.50 Since petitioner failed to avail of the proper
remedies before the proper forum, we cannot rule on, much less disturb, the validity of the
proceedings before the Pasay City RTC in Civil Case No. 1102-P.
At any rate, whether or not petitioner was properly served with summons in Civil Case No. 1102-P,
and that Augusto was not authorized to enter into the Compromise Agreement dated July 25, 1983
on her behalf, will not affect the outcome of this case. There is sufficient evidence on record to
establish that petitioner impliedly ratified the compromise agreement as well as the other
documents executed pursuant thereto. Implied ratification may take various forms such as by
silence or acquiescence; by acts showing approval or adoption of the contract; or by acceptance
and retention of benefits flowing therefrom.51
In the instant case, petitioner claimed that she learned of the transfer of the subject lot to
respondent-spouses as part of the settlement in the collection suit in May 1985;52 however, she did
not take steps to immediately assail the alleged unauthorized transfer of the same. She failed to
adequately explain why she waited four years later or until 1989 to file the subject complaint to
annul the aforesaid documents. More importantly, instead of asserting her rights over the subject
lot after discovering the alleged fraudulent and unauthorized transfer of the same to respondent-
spouses in May 1985, petitioner subsequently sold the house constructed on the subject lot also to
respondent-spouses on February 22, 1987 for the sum of ₱25,000.00. This act runs counter to the
reaction of one who discovers that his or her property has been fraudulently conveyed in favor of
another. Indubitably, this act only fortifies the previous finding that petitioner has authorized and
consented to, or, at the very least, ratified the sale of the subject lot to respondent-spouses to pay
off her debts to Rosario.
Petitioner alleges that the Deed of Sale53 dated February 24, 1987 is a forgery. She denies having
signed the aforesaid deed and claims that on February 24, 1987, the date when the deed was
allegedly notarized, she was in Hong Kong working as a domestic helper.
The trial court and the Court of Appeals found otherwise. They gave credence to the claim of
respondent Pedro de Guzman that petitioner signed the Deed of Sale and received the ₱25,000.00
consideration therefor on February 22, 1987 or two days before she left for Hong Kong. However,
the deed was notarized only on February 24, 1987 as admitted by respondent Pedro de Guzman.
The Court of Appeals noted that even a cursory examination of the signature appearing on the Deed
of Sale would show that it was written by one and the same hand that signed the Contract to Sell
which petitioner admits contained her signature.54 In addition, Augusto admitted that he signed the
deed as evidenced by the signature in the portion of the deed where he gave his marital consent to
the sale.55 Further, as per the request of petitioner in a Letter56 dated February 22, 1987,
respondent- spouses gave petitioner’s son and sister the sum of ₱122,000.00 as additional
consideration for the house built on the subject lot. Thereafter, petitioner’s son and sister signed
an Annotation57 dated March 20, 1987 in said Letter acknowledging receipt of the aforesaid
sum.1avvphi1
It was established that petitioner received valuable consideration for the sale of the house on the
subject lot. Concededly, the notarization of the deed was defective as respondent Pedro de Guzman
himself admitted that the deed was notarized only two days after petitioner had signed the deed
and at which time she was already in Hong Kong. In short, petitioner did not appear before the
notary public in violation of the Notarial Law58 which requires that the party acknowledging must
appear before the notary public or any other person authorized to take acknowledgments of
instruments or documents.59 Nevertheless, the defective notarization of the deed does not affect
the validity of the sale of the house. Although Article 135860 of the Civil Code states that the sale of
real property must appear in a public instrument, the formalities required by this article is not
essential for the validity of the contract but is simply for its greater efficacy or convenience, or to
bind third persons,61 and is merely a coercive means granted to the contracting parties to enable
them to reciprocally compel the observance of the prescribed form.62 Consequently, the private
conveyance of the house is valid between the parties.63
Based on the foregoing, we are satisfied that the sale of the subject lot and the house built thereon
was made for valuable consideration and with the consent of petitioner. Consequently, we affirm
the findings of the lower courts which upheld the validity of the transfer of petitioner’s rights over
the subject lot as well as the sale of the house built thereon in favor of respondent-spouses.
Anent petitioner’s claim that she is the owner of another house located at 1191 P. Zapanta,
Singalong, Manila, the same must similarly fail. Aside from the self-serving statement that she owns
the house, petitioner merely presented a Metropolitan Waterworks and Sewerage System Official
Water Receipt64 dated December 7, 1979, a water installation Receipt65 dated August 22, 1979, and
a Manila Electric Company (Meralco) Warrant66 to purchase a stock of Meralco Securities
Corporation dated December 24, 1975, all in her name, to establish her claim. Suffice it to state,
petitioner’s evidence does not meet the quantum of proof necessary to establish that she is the
rightful owner of the aforesaid house. At best, they prove that she resided in the aforesaid house
sometime in the 1970s or long before she filed the subject complaint on August 25, 1989. Basic is
the rule that in civil cases, the burden of proof is on the plaintiff to establish her case by a
preponderance of evidence. If she claims a right granted or created by law, she must prove her claim
by competent evidence. She must rely on the strength of her own evidence and not on the weakness
of that of her opponent.67 This, petitioner failed to do.
WHEREFORE, the petition is DENIED. The September 14, 2000 Decision of the Court of Appeals in
CA-G.R. CV No. 47487 which affirmed the August 8, 1994 Decision of the Regional Court of Manila,
Branch 7, in Civil Case No. 89-50138, dismissing the complaint, and ordering petitioner to pay
₱50,000.00 as moral damages, ₱10,000.00 as attorney’s fees and costs of the suit, and its May 28,
2001 Resolution denying petitioner’s motion for reconsideration, are AFFIRMED.
Costs against petitioner.
SO ORDERED.
LEGFORMS – DONATION OF IMMOVABLE PROPERTY
G.R. No. 132681 December 3, 2001
RICKY Q. QUILALA, petitioner,
vs.
GLICERIA ALCANTARA, LEONORA ALCANTARA, INES REYES and JOSE REYES, respondent.
YNARES-SANTIAGO, J.:
On February 20, 1981, Catalina Quilala executed a "Donation of Real Property Inter Vivos" in favor
of Violeta Quilala over a parcel of land located in Sta. Cruz, Manila, containing an area of 94 square
meters, and registered in her name under Transfer Certificate of Title No. 17214 of the Register of
Deeds for Manila.
The "Donation of Real Property Inter Vivos" consists of two pages. The first page contains the deed
of donation itself, and is signed on the bottom portion by Catalina Quilala as donor, Violeta Quilala
as donee, and two instrumental witnesses.1 The second page contains the Acknowledgment, which
states merely that Catalina Quilala personally appeared before the notary public and acknowledged
that the donation was her free and voluntary act and deed. There appear on the left-hand margin
of the second page the signatures of Catalina Quilala and one of the witnesses, and on the right-
hand margin the signatures of Violeta Quilala and the other witness.2 The Acknowledgment reads:
REPUBLIC OF THE PHILIPPINES )
QUEZON CITY ) S.S.
Before Me, a Notary Public, for and in the City of Quezon, Philippines, this 20th day of Feb. 1981,
personally appeared CATALINA QUILALA, with Residence Certificate No. 19055265 issued at
Quezon City on February 4, 1981, known to me and to me known to be the same person who
executed the foregoing instruments and acknowledged to me that the same is her own free and
voluntary act and deed.
I hereby certify that this instrument consisting of two (2) pages, including the page on which this
acknowledgment is written, has been signed by CATALINA QUILALA and her instrumental
witnesses at the end thereof and on the left-hand margin of page 2 and both pages have been
sealed with my notarial seal.
In witness whereof, I have hereunto set my hand, in the City of Quezon, Philippines, this 20th day
of Feb., 1981.
(SGD.) NOTARY PUBLIC
Until December 31, 1981
(illegible)
DOC NO. 22;
PAGE NO. 6;
BOOK NO. XV;
SERIES OF 1981.
The deed of donation was registered with the Register of Deeds and, in due course, TCT No. 17214
was cancelled and TCT No. 143015 was issued in the name of Violeta Quilala.
On November 7, 1983, Catalina Quilala died. Violeta Quilala likewise died on May 22, 1984.
Petitioner Ricky Quilala alleges that he is the surviving son of Violeta Quilala.
Meanwhile, respondents Gliceria Alcantara, Leonora Alcantara, Ines Reyes and Juan Reyes, claiming
to be Catalina's only surviving relatives within the fourth civil degree of consanguinity, executed a
deed of extrajudicial settlement of estate, dividing and adjudicating unto themselves the above-
described property.
On September 13, 1984, respondents instituted against petitioner and Guillermo T. San Pedro, the
Registrar of Deeds of Manila, an action for the declaration of nullity of the donation inter vivos, and
for the cancellation of TCT No. 143015 in the name of Violeta Quilala. The case was docketed as Civil
Case No. 84-26603 of the Regional Trial Court of Manila, Branch 17. Subsequently, respondents
withdrew their complaint as against Guillermo T. San Pedro and he was dropped as a party-
defendant.
The trial court found that the deed of donation, although signed by both Catalina and Violeta, was
acknowledged before a notary public only by the donor, Catalina. Consequently, there was no
acceptance by Violeta of the donation in a public instrument, thus rendering the donation null and
void. Furthermore, the trial court held that nowhere in Catalina's SSS records does it appear that
Violeta was Catalina's daughter. Rather, Violeta was referred to therein as an adopted child, but
there was no positive evidence that the adoption was legal. On the other hand, the trial court found
that respondents were first cousins of Catalina Quilala. However, since it appeared that Catalina
died leaving a will, the trial court ruled that respondents' deed of extrajudicial settlement can not
be registered. The trial court rendered judgment as follows:
WHEREFORE, judgment is hereby rendered in favor of plaintiffs Gliceria Alcantara, Leonarda
Alcantara, Ines Reyes and Juan Reyes and against defendant Ricky A. Quilala, as follows:
1. Declaring null and void the deed of donation of real property inter vivos executed on
February 20, 1981 by Catalina Quilala in favor of Violeta Quilala (Exhs. A as well as 11 and 11-
A.);
2. Ordering the Register of Deeds of Manila to cancel Transfer Certificate of Title No. 143015 in
the name of Violeta Quilala and to issue a transfer certificate of title in the name of the Estate
of Catalina Quilala;.
3. Dismissing the complaint insofar as it seeks the registration of the deed of extrajudicial
settlement (Exhs. B and B-1,) and the issuance by the Register of Deeds of Manila of a transfer
certificate of title in the names of the plaintiffs; and
4. Dismissing the counterclaim of defendant Ricky A. Quilala.
No costs.
SO ORDERED.3
Petitioner appealed the aforesaid decision. On July 30, 1997, the Court of Appeals rendered a
decision affirming with modification the decision of the trial court by dismissing the complaint for
lack of cause of action without prejudice to the filing of probate proceedings of Catalina's alleged
last will and testament.4
WHEREFORE, the appealed decision is hereby AFFIRMED with the following MODIFICATION:
 (3) DISMISSING the complaint for lack of cause of action without prejudice to the filing of the
necessary probate proceedings by the interested parties so as not to render nugatory the right of
the lawful heirs.
Petitioner filed a motion for reconsideration, which the Court of Appeals denied on February 11,
1998.5 Hence, this petition for review, raising the following assignment of errors:
A. THE COURT OF APPEALS ERRED IN RULING THAT THE DEED OF DONATION OF REAL PROPERTY
INTER-VIVOS IS NOT REGISTRABLE.
B. THE COURT OF APPEALS ERRED ON UPHOLDING THE LOWER COURT'S RULING THAT VIOLETA
QUILALA IS NOT THE DAUGHTER OF CATALINA QUILALA.6
The principal issue raised is the validity of the donation executed by Catalina in favor of Violeta.
Under Article 749 of the Civil Code, the donation of an immovable must be made in a public
instrument in order to be valid,7 specifying therein the property donated and the value of the
charges which the donee must satisfy. As a mode of acquiring ownership, donation results in an
effective transfer of title over the property from the donor to the donee,8 and is perfected from the
moment the donor knows of the acceptance by the donee, 9 provided the donee is not disqualified
or prohibited by law from accepting the donation. Once the donation is accepted, it is generally
considered irrevocable,10 and the donee becomes the absolute owner of the property. 11 The
acceptance, to be valid, must be made during the lifetime of both the donor and the donee.12 It may
be made in the same deed or in a separate public document,13 and the donor must know the
acceptance by the donee.14
In the case at bar, the deed of donation contained the number of the certificate of title as well as
the technical description of the real property donated. It stipulated that the donation was made for
and in consideration of the "love and affection which the DONEE inspires in the DONOR, and as an
act of liberality and generosity."15 This was sufficient cause for a donation. Indeed, donation is
legally defined as "an act of liberality whereby a person disposes gratuitously of a thing or right in
favor of another, who accepts it."16
The donee's acceptance of the donation was explicitly manifested in the penultimate paragraph of
the deed, which reads:
That the DONEE hereby receives and accepts the gift and donation made in her favor by the
DONOR and she hereby expresses her appreciation and gratefulness for the kindness and
generosity of the DONOR.17
Below the terms and stipulations of the donation, the donor, donee and their witnesses affixed their
signature. However, the Acknowledgment appearing on the second page mentioned only the donor,
Catalina Quilala. Thus, the trial court ruled that for Violeta's failure to acknowledge her acceptance
before the notary public, the same was set forth merely on a private instrument, i.e., the first page
of the instrument. We disagree.
The pertinent provision is Section 112, paragraph 2 of Presidential Decree No. 1529, which states:
Deeds, conveyances, encumbrances, discharges, powers of attorney and other voluntary
instruments, whether affecting registered or unregistered land, executed in accordance with law
in the form of public instruments shall be registrable: Provided, that, every such instrument shall
be signed by person or persons executing the same in the presence of at least two witnesses who
shall likewise sign thereon, and shall be acknowledged to be the free act and deed of the person
or persons executing the same before a notary public or other public officer authorized by law to
take acknowledgment. Where the instrument so acknowledged consists of two or more pages
including the page whereon acknowledgment is written, each page of the copy which is to be
registered in the office of the Register of Deeds, or if registration is not contemplated, each page
of the copy to be kept by the notary public, except the page where the signatures already appear
at the foot of the instrument shall be signed on the left margin thereof by the person or persons
executing the instrument and their witnesses, and all the pages sealed with the notarial seal, and
this fact as well as the number of pages shall be stated in the acknowledgment. Where the
instrument acknowledged relates to a sale, transfer, mortgage or encumbrance of two or more
parcels of land, the number thereof shall likewise be set forth in said acknowledgment." (italics
supplied).
As stated above, the second page of the deed of donation, on which the Acknowledgment appears,
was signed by the donor and one witness on the left-hand margin, and by the donee and the other
witness on the right hand margin. Surely, the requirement that the contracting parties and their
witnesses should sign on the left-hand margin of the instrument is not absolute. The intendment of
the law merely is to ensure that each and every page of the instrument is authenticated by the
parties. The requirement is designed to avoid the falsification of the contract after the same has
already been duly executed by the parties. Hence, a contracting party affixes his signature on each
page of the instrument to certify that he is agreeing to everything that is written thereon at the time
of signing.
Simply put, the specification of the location of the signature is merely directory. The fact that one
of the parties signs on the wrong side of the page does not invalidate the document. The purpose
of authenticating the page is served, and the requirement in the above-quoted provision is deemed
substantially complied with.
In the same vein, the lack of an acknowledgment by the donee before the notary public does not
also render the donation null and void. The instrument should be treated in its entirety. It cannot
be considered a private document in part and a public document in another part. The fact that it
was acknowledged before a notary public converts the deed of donation in its entirety a public
instrument. The fact that the donee was not mentioned by the notary public in the acknowledgment
is of no moment. To be sure, it is the conveyance that should be acknowledged as a free and
voluntary act. In any event, the donee signed on the second page, which contains the
Acknowledgment only. Her acceptance, which is explicitly set forth on the first page of the notarized
deed of donation, was made in a public instrument.
It should be stressed that this Court, not being a trier of facts, can not make a determination of
whether Violeta was the daughter of Catalina, or whether petitioner is the son of Violeta. These
issues should be ventilated in the appropriate probate or settlement proceedings affecting the
respective estates of Catalina and Violeta. Suffice it to state that the donation, which we declare
herein to be valid, will still be subjected to a test on its inofficiousness under Article 771,18 in relation
to Articles 752, 911 and 912 of the Civil Code. Moreover, property donated inter vivos is subject to
collation after the donor's death,19 whether the donation was made to a compulsory heir or a
stranger,20 unless there is an express prohibition if that had been the donor's intention.21
WHEREFORE, in view of the foregoing, the petition is GRANTED. The appealed decision of the Court
of Appeals , is REVERSED and SET ASIDE, and a new judgment is rendered dismissing Civil Case No.
84-26603.
SO ORDERED.
LEGFORMS – DONATION OF IMMOVABLE
G.R. No. 160488 September 3, 2004
FELOMINA1 ABELLANA, petitioner,
vs.
SPOUSES ROMEO PONCE and LUCILA PONCE and the REGISTER OF DEEDS of BUTUAN CITY,
respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari assailing the June 16, 2003 decision2 of the Court of Appeals
in CA-G.R. CV No. 69213, which reversed and set aside the August 28, 2000 decision3 of the Regional
Trial Court of Butuan City, Branch 2, in Civil Case No. 4270.
The facts as testified to by petitioner Felomina Abellana are as follows:
On July 15, 1981, Felomina, a spinster, pharmacist and aunt of private respondent Lucila Ponce,
purchased from the late Estela Caldoza-Pacres a 44,2974 square meter agricultural lot5 with the
intention of giving said lot to her niece, Lucila. Thus, in the deed of sale, 6 the latter was designated
as the buyer of Lot 3, Pcs-10-000198, covered by Original Certificate of Title No. P-27, Homestead
Patent No. V-1551 and located at Los Angeles, Butuan City.7 The total consideration of the sale was
P16,500.00, but only P4,500.00 was stated in the deed upon the request of the seller. 8
Subsequently, Felomina applied for the issuance of title in the name of her niece. On April 28, 1992,
Transfer Certificate of Title (TCT) No. 28749 over the subject lot was issued in the name of Lucila.10
Said title, however, remained in the possession of Felomina who developed the lot through Juanario
Torreon11 and paid real property taxes thereon.12
The relationship between Felomina and respondent spouses Romeo and Lucila Ponce, however,
turned sour. The latter allegedly became disrespectful and ungrateful to the point of hurling her
insults and even attempting to hurt her physically. Hence, Felomina filed the instant case for
revocation of implied trust to recover legal title over the property.13
Private respondent spouses Lucila, also a pharmacist, and Romeo, a marine engineer, on the other
hand, claimed that the purchase price of the lot was only P4,500.00 and that it was them who paid
the same. The payment and signing of the deed of sale allegedly took place in the office of Atty.
Teodoro Emboy in the presence of the seller and her siblings namely, Aquilino Caldoza and the late
Lilia Caldoza.14
A year later, Juanario approached Lucila and volunteered to till the lot, to which she agreed. 15 In
1987, the spouses consented to Felomina’s proposal to develop and lease the lot. They, however,
shouldered the real property taxes on the lot, which was paid through Felomina. In 1990, the
spouses demanded rental from Felomina but she refused to pay because her agricultural endeavor
was allegedly not profitable.16
When Lucila learned that a certificate of title in her name had already been issued, she confronted
Felomina who claimed that she already gave her the title. Thinking that she might have misplaced
the title, Lucila executed an affidavit of loss which led to the issuance of another certificate of title
in her name.17
On August 28, 2000, the trial court rendered a decision holding that an implied trust existed
between Felomina and Lucila, such that the latter is merely holding the lot for the benefit of the
former. It thus ordered the conveyance of the subject lot in favor of Felomina. The dispositive
portion thereof, reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered declaring, directing and ordering that:
a) An implied trust was created with plaintiff as trustor and private defendant Lucila A. Ponce
married to private defendant Engr. Romeo D. Ponce as trustee pursuant to Article 1448 of the
New Civil Code;
b) The implied trust, having been created without the consent of the trustee and without any
condition, is revoked;
c) The private defendants, who are spouses, execute the necessary deed of conveyance in favor
of the plaintiff of the land, covered by and embraced in TCT NO. T-2874, in controversy and in
the event private defendants refuse to execute the deed of conveyance, the public defendant
City Register of Deeds of Butuan to cancel TCT No. T-2874 and issue a new one in lieu thereof
in the name of the plaintiff;
d) The private defendants spouses to pay jointly and severally plaintiff the sum of PhP25,000.00
as attorney’s fees and PhP4,000.00 as expenses of litigation;
e) The dismissal of the counterclaim of private defendants spouses[;] and
f) The private defendants to pay the costs.
SO ORDERED.18
Private respondent spouses appealed to the Court of Appeals which set aside the decision of the
trial court ruling that Felomina failed to prove the existence of an implied trust and upheld
respondent spouses’ ownership over the litigated lot. The appellate court further held that even
assuming that Felomina paid the purchase price of the lot, the situation falls within the exception
stated in Article 1448 of the Civil Code which raises a disputable presumption that the property was
purchased by Felomina as a gift to Lucila whom she considered as her own daughter. The decretal
portion thereof, states –
WHEREFORE, premises considered, the appealed decision of the Regional Trial Court, Branch 2,
Butuan City, in Civil Case No. 4270, is hereby REVERSED AND SET ASIDE. A new one is heretofore
rendered dismissing the complaint below of plaintiff-appellee, F[e]lomina Abellana.
SO ORDERED.19
Felomina filed a motion for reconsideration but the same was denied.20 Hence, the instant petition.
The issue before us is: Who, as between Felomina and respondent spouses, is the lawful owner of
the controverted lot? To resolve this issue, it is necessary to determine who paid the purchase price
of the lot.
After a thorough examination of the records and transcript of stenographic notes, we find that it
was Felomina and not Lucila who truly purchased the questioned lot from Estela. The positive and
consistent testimony of Felomina alone, that she was the real vendee of the lot, is credible to
debunk the contrary claim of respondent spouses. Indeed, the lone testimony of a witness, if
credible, is sufficient as in the present case.21 Moreover, Aquilino Caldoza, brother of the vendor
and one of the witnesses22 to the deed of sale, categorically declared that Felomina was the buyer
and the one who paid the purchase price to her sister, Estela.23
Then too, Juanario, who was allegedly hired by Lucila to develop the lot, vehemently denied that he
approached and convinced Lucila to let him till the land. According to Juanario, he had never spoken
to Lucila about the lot and it was Felomina who recruited him to be the caretaker of the litigated
property.24
The fact that it was Felomina who bought the lot was further bolstered by her possession of the
following documents from the time of their issuance up to the present, to wit: (1) the transfer
certificate of title25 and tax declaration in the name of Lucila;26 (2) the receipts of real property taxes
in the name of Felomina Abellana for the years 1982-1984, 1992-1994 and 1995;27 and (3) the survey
plan of the lot.28
Having determined that it was Felomina who paid the purchase price of the subject lot, the next
question to resolve is the nature of the transaction between her and Lucila.
It appears that Felomina, being of advanced age29 with no family of her own, used to purchase
properties and afterwards give them to her nieces. In fact, aside from the lot she bought for Lucila
(marked as Exhibit "R-2"), she also purchased 2 lots, one from Aquilino Caldoza (marked as Exhibit
"R-1") and the other from Domiciano Caldoza (marked as Exhibit "R-3"), which she gave to Zaida
Bascones (sister of Lucila), thus:
Q I am showing to you again Exhibit R, according to you[,] you bought Exhibits R-1, R-2 and R-3,
do you remember that?
A Yes sir.
xxx xxx xxx
Q Aquilin[o] Caldoza conveyed this land in Exhibit R-1 to you?
A Yes, sir.
Q Is this now titled in your name?
A No. I was planning to give this land to my nieces. One of which [was] already given to Mrs.
[Lucila] Ponce.
Q I am talking only about this lot in Exhibit R-1[.]
A Not in my name.
Q In whose name was this lot in Exhibit R-1 now?
A In the name of Zaida Bascones.
Q Who prepared the deed of sale?
A At the start it was in the name of Rudy [Torreon].30 Because Rudy [Torreon] knew that there is
some trouble already about that lot he made a deed of sale to the name of Zaida Bascones, which
I planned to give that land to her (sic).
Q As regards Exhibit R-1, you bought it actually?
A Yes, sir.
Q But the … original deed of sale was in the name of Rudolfo [Torreon]?
A Yes, sir.
Q And later on Rudolfo [Torreon] again transferred it to Zaida Bascones?
A Yes, sir.31
Likewise, in the case of Lucila, though it was Felomina who paid for the lot, she had Lucila designated
in the deed as the vendee thereof and had the title of the lot issued in Lucila’s name. It is clear
therefore that Felomina donated the land to Lucila. This is evident from her declarations, viz:
Witness
A In 1981 there was a riceland offered so I told her that I will buy that land and I will give to her
later (sic), because since 1981 up to 1992 Mrs. Lucila Ponce has no job.
Q Where is the land located?
A In Los Angeles, Butuan City.
Q Who was the owner of this land?
A The owner of that land is Mrs. Estela Caldoza-Pacr[e]s.
The husband is Pacr[e]s.
xxx xxx xxx
Q What did you do with this land belonging to Mrs. Estela-Caldoza- Pacr[e]s?
A I paid the lot, then worked the lot, since at the start of my buying the lot until now (sic).
Q You said that you told Lucila Ponce that you would give the land to her later on, what did you
do in connection with this intention of yours to give the land to her?
A So I put the name of the title in her name in good faith (sic).
Q You mean to tell the court that when you purchased this land located at Los Angeles, Butuan
City, the instrument of sale or the deed of sale was in the name of Lucila Ponce?
A Yes, sir.32
xxx xxx xxx
Q Did you not ask your adviser Rudolfo [Torreon] whether it was wise for you to place the
property in the name of Lucila Ponce when you are the one who is the owner?
A Because we have really the intention to give it to her.33
Generally, contracts are obligatory in whatever form they may have been entered into, provided all
the essential requisites for their validity are present. When, however, the law requires that a
contract be in some form in order that it may be valid, that requirement is absolute and
indispensable. Its non-observance renders the contract void and of no effect.34 Thus, under Article
749 of the Civil Code –
Article 749. In order that the donation of an immovable property may be valid, it must be made
in a public document, specifying therein the property donated and the value of the charges which
the donee must satisfy.
The acceptance may be made in the same deed of donation or in a separate public document, but
it shall not take effect unless it is done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both instruments.
In the instant case, what transpired between Felomina and Lucila was a donation of an immovable
property which was not embodied in a public instrument as required by the foregoing article. Being
an oral donation, the transaction was void.35 Moreover, even if Felomina enjoyed the fruits of the
land with the intention of giving effect to the donation after her demise, the conveyance is still a
void donation mortis causa, for non-compliance with the formalities of a will.36 No valid title passed
regardless of the intention of Felomina to donate the property to Lucila, because the naked intent
to convey without the required solemnities does not suffice for gratuitous alienations, even as
between the parties inter se.37 At any rate, Felomina now seeks to recover title over the property
because of the alleged ingratitude of the respondent spouses.
Unlike ordinary contracts (which are perfected by the concurrence of the requisites of consent,
object and cause pursuant to Article 131838 of the Civil Code), solemn contracts like donations are
perfected only upon compliance with the legal formalities under Articles 74839 and 749.40 Otherwise
stated, absent the solemnity requirements for validity, the mere intention of the parties does not
give rise to a contract. The oral donation in the case at bar is therefore legally inexistent and an
action for the declaration of the inexistence of a contract does not prescribe.41 Hence, Felomina can
still recover title from Lucila.
Article 144842 of the Civil Code on implied trust finds no application in the instant case. The concept
of implied trusts is that from the facts and circumstances of a given case, the existence of a trust
relationship is inferred in order to effect the presumed intention of the parties. 43 Thus, one of the
recognized exceptions to the establishment of an implied trust is where a contrary intention is
proved,44 as in the present case. From the testimony of Felomina herself, she wanted to give the lot
to Lucila as a gift. To her mind, the execution of a deed with Lucila as the buyer and the subsequent
issuance of title in the latter’s name were the acts that would effectuate her generosity. In so
carrying out what she conceived, Felomina evidently displayed her unequivocal intention to transfer
ownership of the lot to Lucila and not merely to constitute her as a trustee thereof. It was only when
their relationship soured that she sought to revoke the donation on the theory of implied trust,
though as previously discussed, there is nothing to revoke because the donation was never
perfected.
In declaring Lucila as the owner of the disputed lot, the Court of Appeals applied, among others, the
second sentence of Article 1448 which states –
"x x x However, if the person to whom the title is conveyed is a child, legitimate or illegitimate, of
the one paying the price of the sale, no trust is implied by law, it being disputably presumed that
there is a gift in favor of the child."
Said presumption also arises where the property is given to a person to whom the person paying
the price stands in loco parentis or as a substitute parent.45
The abovecited provision, however, is also not applicable here because, first, it was not established
that Felomina stood as a substitute parent of Lucila; and second, even assuming that she did, the
donation is still void because the transfer and acceptance was not embodied in a public instrument.
We note that said provision merely raised a presumption that the conveyance was a gift but nothing
therein exempts the parties from complying with the formalities of a donation. Dispensation of such
solemnities would give rise to anomalous situations where the formalities of a donation and a will
in donations inter vivos, and donations mortis causa, respectively, would be done away with when
the transfer of the property is made in favor of a child or one to whom the donor stands in loco
parentis. Such a scenario is clearly repugnant to the mandatory nature of the law on donation.
While Felomina sought to recover the litigated lot on the ground of implied trust and not on the
invalidity of donation, the Court is clothed with ample authority to address the latter issue in order
to arrive at a just decision that completely disposes of the controversy.46 Since rules of procedure
are mere tools designed to facilitate the attainment of justice, they must be applied in a way that
equitably and completely resolve the rights and obligations of the parties. 47
As to the trial court’s award of attorney’s fees and litigation expenses, the same should be deleted
for lack of basis. Aside from the allegations in the complaint, no evidence was presented in support
of said claims. The trial court made these awards in the dispositive portion of its decision without
stating any justification therefor in the ratio decidendi. Their deletion is therefore proper.48
Finally, in deciding in favor of Felomina, the trial court ordered respondent spouses to execute a
deed of sale over the subject lot in favor of Felomina in order to effect the transfer of title to the
latter. The proper remedy, however, is provided under Section 10 (a), Rule 39 of the Revised Rules
of Civil Procedure which provides that "x x x [i]f real or personal property is situated within the
Philippines, the court in lieu of directing a conveyance thereof may by an order divest the title of
any party and vest it in others, which shall have the force and effect of a conveyance executed in
due form of law."
WHEREFORE, in view of all the foregoing, the petition is GRANTED and the June 16, 2003 decision
of the Court of Appeals in CA-G.R. CV No. 69213 is REVERSED and SET ASIDE. The August 28, 2000
decision of the Regional Trial Court of Butuan City, Branch 2, in Civil Case No. 4270, is REINSTATED
with the following MODIFICATIONS:
(1) Declaring petitioner Felomina Abellana as the absolute owner of Lot 3, Pcs-10-000198;
(2) Ordering the Register of Deeds of Butuan City to cancel TCT No. T-2874 in the name of
respondent Lucila Ponce and to issue a new one in the name of petitioner Felomina Abellana; and
(3) Deleting the awards of attorney’s fees and litigation expenses for lack of basis.
No pronouncement as to costs.
SO ORDERED.