Evidence

Law 126 Evidence
Prof. Avena
35. NOTARIAL DOCUMENTS
Republic of the Philippines

SUPREME COURT
Manila
EN BANC
A.M. No. P-08-2450
June 10, 2009
(Formerly OCA IPI No. 00-27-CA-P)
AURORA B. GO, Complainant,
vs.
MARGARITO A. COSTELO, JR., SHERIFF IV, REGIONAL TRIAL COURT,
BRANCH 11, CALUBIAN, LEYTE,Respondent.
DECISION
Per Curiam:
Before this Court is the affidavit-complaint1 dated June 19, 2003 filed by
complainant Aurora B. Go with the Office of the Court Administrator
(OCA), charging respondent Margarito A. Costelo, Jr., Sheriff IV of the
Regional Trial Court (RTC), Branch 11, Calubian, Leyte, with grave
misconduct, falsification and abuse of authority.
In her complaint, Go alleged that she executed a Deed of Absolute Sale in
favor of her sister Anita Conde over a parcel of land covered by Tax
Declaration No. ARP 09004-00109. On November 8, 2001, while the
complainant was in Taiwan, she received a call from Conde, who
informed her that respondent Sheriff was going to subject said parcel of
land to an auction sale on that same day, pursuant to a Writ of
Execution2 dated July 18, 2001 issued against complainant by the
Page 1 of 99
Municipal Trial Court in Cities (MTCC) of Cebu City in an ejectment

case.3Complainant advised Conde to avail herself of legal remedies such
as filing a third-party claim to prevent the auction, but despite proof of
ownership shown by Conde to respondent, the latter proceeded with the
sale.
Complainant further alleged that respondent Sheriff: (1) took advantage
of her absence from the Philippines and surreptitiously and hastily
proceeded with the auctioning of the real property; (2) persisted in
conducting the auction sale with patent partiality in favor of Doris
Sunbanon, the prevailing party in the ejectment case; (3) made it appear
that a person residing in the subject property received the notice of
auction by falsifying the signature of the alleged person in the
purportedly received copy of the notice, but such person was unknown
to complainant and Conde; (4) failed to make proper posting of the
notice of auction; (5) did not acknowledge the documents evidencing the
transfer of ownership of property from complainant to Conde, and said
that the Deed of Absolute Sale was "gawa-gawa" [simulated]; and (6)
falsified the entries in the Certificate of Sale by stating that it was
executed and notarized on November 8, 2001 by a certain Atty. Roberto
dela Pea when in truth a certified photocopy of the notarial book of
Atty. Dela Pea shows that no such document was notarized on said date
or immediately thereafter.
Also, complainant stated that it was doubtful whether respondent
actually conducted an auction sale on November 8, 2001, considering
that a strong typhoon hit Calubian from November 6 to 8, 2001, as a
result of which offices were closed. She further averred that, on the day
of the auction sale, Conde went to the Sheriffs Office, where she was told
by respondent that there would be no auction sale that day. Conde was
advised to bring the Deed of Sale and third-party claim to respondents
house, so that he could make a report to the MTCC, Branch 2, Cebu City
that Conde was the new owner of the property. When Conde brought the
required documents to respondents house, she learned that respondent
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still failed to report to the court her claim over the property. This
prompted Conde to file a Third-Party Claim4 on November 15, 2001
before the MTCC, Branch 2, Cebu City. However, when Conde went to
respondents office to deliver a photocopy of her third-party claim,
respondent showed her the Certificate of Sale5 in the name of Doris
Sunbanon, who was the highest bidder in the auction sale held on
November 8, 2001.
On the other hand, respondent filed his Comment6 dated September 9,
2003, wherein he denied that he committed irregularities in auctioning
the subject property, for a Levy on Execution had been made based on
the certified true copy of the tax declaration issued by the Municipal
Assessor of Calubian, Leyte and the same was duly annotated by the
Register of Deeds for the Province of Leyte. He claimed that, before
November 12, 2001, he had no knowledge that the property sold at
public auction was owned by a certain Anita Conde, and that the sole
basis of the Levy on Execution and the Sheriffs auction sale was the
mere fact that the declared owner of the property was complainant Go,
the losing party in the ejectment case. It was only when Conde filed her
third-party claim that respondent came to know that there was a thirdparty claimant over the property in question.
Respondent also denied having described the Deed of Absolute Sale as
"gawa-gawa." He averred that before he conducted the auction sale, he
sent a copy of the Notice of Sale on Execution of Real Property to the
complainant by registered mail, but it was returned with a notation
"party moved out" and marked "RTS" by the Calubian Post Office. He,
likewise, claimed that the auction sale had not been cancelled or
postponed due to inclement weather, and that he had the Certificate of
Sale duly notarized on November 8, 2001.
Respondent pointed out that the complainant executed the Deed of
Absolute Sale in favor of Conde on January 24, 2001, barely two months
after the Court of Appeals promulgated its decision in the ejectment case
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dated November 16, 2000 against complainant, which showed that the
complainant transferred her property to prevent the court from levying
the same.
On June 29, 2004, the OCA recommended that the complaint be referred
to Judge Alejandro Diongzon of the RTC of Calubian, Leyte on the ground
that the issues raised by the complainant could not be resolved on the
basis of the submitted pleadings and documents alone, and that a fullblown investigation was necessary,7 a recommendation that the Court
adopted in its Resolution8 dated October 20, 2004. However, on January
19, 2005, complainant filed with the OCA an Urgent Motion for
Inhibition9 of Judge Diongzon claiming that the latter would be partial in
handling the case, because said judge was the approving officer of the
Certificate of Sale. In a Resolution10 dated April 20, 2005, the Court
recalled its Resolution dated October 20, 2004 and, instead, directed
Judge Crisostomo Garrido of the RTC of Carigara, Leyte to conduct an
investigation and submit a report and recommendation thereon within
sixty (60) days from receipt of the Resolution.
On May 17, 2006, respondent filed before the Court a Motion11 praying
that the investigation of the case be returned to the RTC, Branch 11,
Calubian, Leyte on the ground that Judge Diongzon had already retired.
His motion was denied in a Memorandum12 of the OCA dated September
18, 2006.
In his Report and Recommendation13 dated February 20, 2007, Judge
Garrido found respondent to have acted without authority in conducting
a public auction sale of the subject property on execution, stating that:
Nowhere could be gleaned from the said order that Respondent Sheriff,
Costelo, Jr. was authorized to conduct public auction sale of the property
on execution. Neither was there any evidence presented that the Sheriff
of MTCC, Branch 2, Cebu City has delegated such authority to Sheriff
Costelo, Jr., to conduct a public auction sale of the property on execution.
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The Respondent Sheriff could have exercised prudence and restraint in

the performance of his duty. Instead of conducting [a] public auction sale
of the property on execution, he could have filed his return of the
property levied, to the MTCC, Branch 2, Cebu City for its sheriff to
conduct the public auction sale, pursuant to the provision of the 2nd
paragraph of Sec. [6] Rule 39, 1997 Rules of Civil Procedure. Blinded by
the expectation of sheriffs fees, the respondent sheriff had forgotten his
bounden duties and responsibilities as employee of the judiciary that
public office is a public trust.
The Certificate of Sale, Minutes of Auction Sale dated November 8, 2001,
are fictitious, fabricated and spurious documents, mere concoction of
facts to give a semblance of legality to the illegal acts of Sheriff Costelo,
Jr. This evaluation finds support from the Certification issued by the
Cebu PAGASA and the Philippine Coast Guard, Cebu Station, Cebu City,
viz:
CERTIFICATION Cebu PAGASA
On November 6, 7 & 8, 2001, Storm Signal No. 2, with heavy rains of
gusty winds of 54 to 65 kilometers per hour were raised over the entire
provinces of Cebu, Samar, Leyte, Dinagat Island, Bohol, Masbate and
Panay Island, with rough to very rough seas, with wave height of 3 to 5
meters.14
CERTIFICATION Philippine Coast Guard
On these three days that the typhoon battered these islands in the
Visayas, no vessels of 2000 gross tonnage and less were given clearance
to leave Cebu for Leyte, Samar and other Visayan islands.15
Evidence admissible when original document is a public record. When
the original of a document is in the custody of a public officer or is
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recorded in a public office, its contents may be proved by a certified copy

issued by the public officer in custody thereof. (emphasis theirs)
Obviously, it was impossible for the judgment creditor Doris Sunbanon
to be present in Leyte on November 6, 7 & 8, 2001, moreso, in Calubian,
Leyte attending a public auction sale on November 8, 2001 at the Office
of the Regional Trial Court, Branch 11, Calubian, Leyte, when all water
and air transportation facilities in Cebu were not given any clearance to
leave for Leyte and the other Visayan islands. Experience had taught us
that when PAGASA raises typhoon signal No. 2 over the provinces
affected, school classes and offices, both public and private, are
automatically suspended.
Judgment Creditor Doris U. Sunbanon was not presented in Court during
the hearing of this case, to corroborate the allegation of Respondent
Sheriff that she was present during the auction sale of the real property
on execution on November 8, 2001 in Calubian, Leyte, nor in the days
prior thereto. There was no evidence presented that indeed, Doris U.
Sunbanon was in Leyte on the aforesaid dates. Not even hotel bills,
receipts of her stay in Leyte or marine vessel or airplane tickets were
presented for her return trip to Cebu City from Leyte, after the
November 8, 2001 alleged auction sale, indicia of her absence in the
public auction sale of the real property on execution on November 8,
2001.
Neither any of the Court personnel of RTC Branch 11, Calubian, Leyte,
who were allegedly present and had signed the logbook on November 8,
2001 was presented in Court, to corroborate the testimony of Sheriff
Costelo, Jr., that indeed, they were holding office on November 8, 2001,
despite typhoon signal no. 2 in the provinces of Samar and Leyte,
indicative that the logbook allegedly signed by [the] Court employees is
spurious and of doubtful authenticity, unavailing and undeserving credit
for it can be easily accomplished to serve ones ulterior motive.
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The validity, genuineness, authenticity and due execution of the

Certificate of Sale issued by Respondent Sheriff Costelo, Jr., dated
November 8, 2001, was put in issue when Notary Public Roberto Dela
Pea of Calubian, Leyte, who allegedly notarized the Certificate of Sale
on November 8, 2001 was put to the witness stand. Roberto Dela Pea
denied that he notarized the alluded Certificate of Sale and that his
signature appearing on the acknowledgment portion of the said
document is fake, a product of falsification and forgery. The entries
denominated as Document 161, Page 37, Book 3, Series of 2000,
appearing on the Certificate of Sale were forged, falsified and fictitious
entries.
Document No. 161, Page No. 37, Book 3, Series of 2000 as entered in the
Notarial Register of Notary Public Roberto Dela Pea refers to a
document denominated as Cancellation and Discharge of Mortgage,
executed by and between Spouses Fileo and Angeles Arias, and Baruel
Rimandaman, Leonila B. Pepito and Alfredo Lagora, and not the
Certificate of Sale issued by the respondent sheriff.
Courts observation and examination of the said entries on page 37 of
the Notarial Register of Roberto Dela Pea, appears to be genuine and
authentic, without any erasure or alteration, written in freehand writing
and in chronological order of events, written in the middle portion of
page 37 of the notarial registry, indicative that the document entered
thereto is the true act of the notary public in recording his transaction
for the day, pursuant to his oath of office.
There is credence to the testimony of Roberto Dela Pea that the
Certificate of Sale issued by the respondent sheriff, was fictitious,
falsified and a product of forgery. Moreover, Roberto Dela Pea, being 70
years old and in the twilight of his life, testified clearly and in a
straightforward manner, relative to the entries on page 37 of his Notarial
Register. Other infirmities in the other pages in his Notarial Register
could only be attributed to old age.
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Sheriff Margarito Costelo, Jr. having acted without [any] authority to

conduct a public auction sale of the real property on execution, the
public auction sale is illegal, invalid and void ab initio. Under the rules,
supra, the public auction sale of the real property on execution shall only
be conducted at the office of the Clerk of Court, MTCC, Branch 2, Cebu
City, the Court which issued the Writ of Execution.
Judiciary officers must, at all times, be accountable to the people. They
serve with utmost degree of integrity, responsibility, loyalty and
efficiency in their duties. In the case at bar, respondent sheriff, Margarito
Costelo, Jr. has [been] remiss of his duties and must account to the
people who repose their trust on him. Such grave misconduct committed
by the respondent sheriff, deserves the highest degree of sanctions. The
respondent sheriff is a disgrace to the Judiciary.
WHEREFORE, premises considered, it is most respectfully
recommended:
1. That the public auction sale of real property on execution be
declared Null and Void;
2. That respondent MARGARITO COSTELO, JR., be dismissed
from the service for Grave Misconduct, Dishonesty and unfit of a
judicial officer (sic), with forfeiture of all benefits, except leave
credits, if any, with prejudice for re-employment in the
government or any agency and instrumentality thereof, including
government-owned and controlled corporations.
RESPECTFULLY RECOMMENDED.16
On March 22, 2007, respondent filed with the RTC of Carigara, Leyte, a
Motion for Reconsideration17 of the Report and Recommendation of
Judge Garrido; and on June 1, 2007, an Omnibus Supplemental Motion
for Reconsideration/Motion to Re-Open the Case and to Inhibit the
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Investigating Judge.18 He claimed that the penalty of dismissal from

service was too harsh, considering the circumstances of the case, and
submitted the following to support his motion: (1) affidavit19 of Roberto
dela Pea recanting his earlier affidavit and testimony that his signature
in the Certificate of Sale was falsified; (2) Daily Time Records20 of the
court employees of the RTC, Branch 11, Calubian, Leyte, showing perfect
attendance and no late days for the month of November 2001, except for
Utility Worker Elpidio Gudmalin, who filed a leave of absence from
November 13 to 15, 2001; (3) photocopy of the Order21 dated November
8, 2001 of the Investigating Judge during the hearing in Sp. Proc. No. 714,
to prove that the Investigating Judge himself conducted a hearing on
November 8, 2001; and (4) PNP Leyte Crime Laboratory Report dated
June 7, 2007, stating that the signature of Roberto dela Pea appearing
on the duplicate copy of the Sheriffs Certificate of Sale and his signature
duly submitted belonged to one and the same person.
In a Resolution dated August 6, 2007, the Court referred Judge Garridos
Report and Recommendation dated February 20, 2007 to the OCA for
evaluation, report and recommendation within 30 days from notice. On
March 12, 2008, the OCA submitted a Memorandum stating that:
We find no reason to disturb the findings of Judge Crisostomo Garrido.
During the course of the investigation, the Investigating Judge saw the
demeanor of the witnesses and he personally knows the conditions
prevailing in the area during the time that there was allegedly a typhoon.
Respondent had the opportunity to present transcripts of court hearing,
if any, on November 8, 2001. The belated submission of the joint
affidavit of his co-employees after learning that he would be dismissed
from the service can be taken as a mere act of saving respondent from
the recommended penalty of dismissal.
We are inclined to believe that the Daily Time Records submitted [for]
the month of November 2001 did not reflect the true attendance of court
employees. It would seem improbable that in a coastal town like
Page 5 of 99
Calubian, all the employees would register a perfect attendance with no

late despite hoisting of Storm Signal No. 2 in the province for 3 days. As
convincingly observed by the Investigating Judge, not one among the
court personnel who were allegedly present on November 8, 2001
testified during the investigation "indicative that the logbook signed by
the court employees is spurious and of doubtful authenticity x x x."
As to the affidavit of Notary Public Roberto Dela Pea recanting his
earlier testimony, the same hardly deserves credence. The Court has
invariably regarded affidavits of recantation as highly unreliable. As held
in People vs. Rojo (114 SCRA 304), an affidavit of retraction which
indicates it [to] be a mere afterthought has no probative value.
As to the PN[P] Crime Laboratory Report yielding a same signature
result, it must be noted that Roberto Dela Pea gave a specimen of his
signature only on 31 May 2007, after he has executed his affidavit
recanting his earlier testimony.
The rest of the alleged newly discovered evidence are obtainable at the
time the investigation was conducted. For an evidence to be considered
"newly discovered," it could not have been discovered prior to the trial
by the exercise of due diligence.
In view of the foregoing, it is respectfully recommended that the instant
case be redocketed as a regular administrative case and that, as
submitted by the Investigating Judge, respondent Sheriff Margarito A.
Costelo, Jr. be DISMISSED FROM THE SERVICE effective immediately
with forfeiture of all benefits except his accrued leave credits with
prejudice to reemployment in any branch or instrumentality of the
government, including government-owned or controlled corporations.
The Court agrees with the recommendation of the OCA affirming the
findings of Judge Garrido.
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In his Report, the Investigating Judge confirmed that respondent effected

a valid service of the Notice of Sale on the judgment debtor, herein
6,22
complainant, in accordance with Section

Rule 13 of the Rules of Civil
Procedure. The Notice of Sale on Execution of Real Property was
likewise duly published for three (3) consecutive weeks by the Sunday
Punch, a newspaper of regional circulation in Leyte and Samar, from
October 15 to 21, 22 to 28 and October 29 to November 4, 2001, as
evidenced by the Affidavit of Publication23 executed by its publisher,
Danilo Silvestrece.
However, respondent had no authority to conduct the public auction sale
of the property in question. Neither was there any evidence to show that
the Sheriff of the MTCC, Branch 2, Cebu City, delegated such authority to
respondent. The Order dated September 25, 2001 of Presiding Judge
Anatalio S. Necesario of the MTCC, Branch 2, Cebu City, clearly provided
that the power and authority given to respondent was only to levy on the
property, as quoted:
ORDER
Acting on the Amended Motion filed by plaintiff-movant for being welltaken and meritorious, the same is hereby granted.
The deficiency judgment in the amount of P143,294.39 is supported by
the sheriffs return of the Writ of Execution already attached to the
expediente of the case.
WHEREFORE, the Deputy Sheriff of this Court (Court) or the Deputy
Sheriff of the Regional Trial Court of Calubian, Leyte is hereby
authorized to levy on the property of the defendants situated in
Calubian, Leyte for the full satisfaction of the deficiency judgment up to
the extent of the sum of P143,294.39 exclusive of costs.
Page 6 of 99
SO ORDERED.24
Even assuming that respondent was given the authority to hold an
auction sale, the complainant was able to establish during the
investigation that the former did not actually conduct a public auction
sale of the property on execution, in violation of paragraphs (c) and (d)
of Section 15, Rule 39 of the Rules of Civil Procedure, quoted as follows:
Sec. 15. Notice of Sale of Property on Execution. Before the sale of
property on execution, notice thereof must be given as follows:
xxxx
(c) In case of real property, by posting for twenty (20) days in
the three (3) public places abovementioned, a similar notice
particularly describing the property and stating where the
property is to be sold, and if the assessed value of the property
exceeds fifty thousand (P50,000.00) pesos, by publishing a copy
of the notice once a week for two (2) consecutive weeks in one
newspaper selected by raffle, whether in English, Filipino, or any
major regional language published, edited and circulated or, in
the absence thereof, having general circulation in the province or
city;
(d) In all cases, written notice of the sale shall be given to the
judgment obligor, at least three (3) days before the sale, except
as provided in paragraph (a) hereof where notice shall be given
at any time before the sale, in the same manner as personal
service of pleadings and other papers as provided by section 6 of
Rule 13.
The notice shall specify the place, date and exact time of the sale which
should not be earlier than nine oclock in the morning and not later than
two oclock in the afternoon. The place of the sale may be agreed upon
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by the parties. In the absence of such agreement, the sale of real

property or personal property not capable of manual delivery shall be
held in the office of the clerk of court of the Regional Trial Court or the
Municipal Trial Court which issued the writ or which was designated by
the appellate court. In the case of personal property capable of manual
delivery, the sale shall be held in the place where the property is
located.25
The fact that a public auction sale could not have possibly taken place on
November 8, 2001 is corroborated by the Certifications of Cebu PAGASA
and the Philippine Coast Guard that there was a typhoon on the date of
sale. Moreover, no evidence was presented in court to prove that
Sunbanon was at the auction sale. Neither did any of the court personnel
of the RTC, Branch 11, Calubian, Leyte, testify that they held office during
the storm on November 8, 2001.
Respondents belated submission of evidence, which was done only after
the investigation had been completed, does not merit probative value, as
the same was a mere afterthought. It has been consistently held that an
affidavit of recantation is unreliable and deserves scant consideration,
since the asserted motives for the repudiation are commonly held
suspect, and the veracity of the statements made in the affidavit of
repudiation are frequently and deservedly subject to serious
doubt.26 Moreover, the OCA observed that the Daily Time Record
appeared to be altered or falsified, as it was shown that there was no
work on November 8, 2001 due to the inclement weather, but
respondent was indicated as purportedly present.
In Malabanan v. Metrillo,27 the Court defined misconduct as a
transgression of some established and definite rule of action, a forbidden
act, a dereliction of duty, unlawful behavior; willful in character,
improper or wrong behavior, while "gross" has been defined as "out of
all measure beyond allowance; flagrant; shameful; such conduct as is not
to be excused." As a sheriff and officer charged with the dispensation of
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justice, respondents conduct and behavior must be circumscribed with

the heavy burden of responsibility.28 In the present case, by the very
nature of their functions, sheriffs, like respondent, are called upon to
discharge their duties with care and utmost diligence and, above all, to
be above suspicion. Instead of following what the MTCC directed in its
Order, respondent conducted a public auction sale when in fact he had
no authority to do so and even falsified a Certificate of Sale. Having been
in the service for 17 years, respondent should have taken the rules by
heart, for it is expected that someone as considerably experienced as he
is would know the proper procedure for disposing of property at a
public auction sale.
Notably, while the Investigating Judge concluded that the Certificate of
Sale and Minutes of Auction Sale were fictitious, fabricated and spurious
documents, he found respondent liable for gross misconduct and
dishonesty without mentioning his findings as to respondents acts of
falsification and abuse of public authority. In the Courts assessment of
the records, however, it finds that respondent was likewise liable for
falsification of an official document when he falsified the Certificate of
Sale and Minutes of Public Auction Sale, and abuse of public authority
when he disposed of the property by auction sale instead of levying the
same, as he was directed to do in the Order of the MTCC judge.1aVVphi1
Respondents acts are clearly in violation of Canon IV of the Code of
Conduct for Court Personnel,29 the pertinent provisions of which state:
Sec. 1. Court personnel shall at all times perform official duties
properly and with diligence, and to commit themselves
exclusively to the business and responsibilities of their office
during working hours.
Sec. 3. Court personnel shall not alter, falsify, destroy or mutilate
any record within their control. This provision does not prohibit
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amendment, correction or expungement of records or

documents pursuant to a court order.
Sec. 6. Court personnel shall expeditiously enforce rules and
implement orders of the court within the limits of their
authority.
The Uniform Rules on Administrative Cases in the Civil
Service30 likewise provides that grave misconduct is punishable by
dismissal from the service under Section 52-A(3), Rule IV thereof, while
falsification of official document is also punishable by dismissal from the
service under Section 52-A(6) thereof.
In Padua v. Paz,31 the Court found respondent sheriff liable for grave
misconduct and falsification of public document and, accordingly,
dismissed him from the service when the latter committed perjury and
gave false testimony. In the present case, respondents act of conducting
a public auction sale, which amounted to grave misconduct, and his
falsification of the Certificate of Sale and the Minutes of Auction Sale are
in flagrant disregard of the law and deserve the supreme penalty of
dismissal.
The Court has consistently held that sheriffs play a significant role in the
administration of justice, for they are primarily responsible for the
execution of a final judgment, which is "the fruit and end of the suit, and
is the life of the law." Thus, sheriffs are expected to show a high degree
of professionalism in performing their duties. As officers of the court,
they are expected to uphold the norm of public accountability and to
avoid any kind of behavior that would diminish or even just tend to
diminish the faith of the people in the Judiciary.32 Herein respondent
failed to abide by these postulates.
Let this case serve as a warning to all court personnel that the Court, in
the exercise of its administrative supervision over all courts and their
Page 8 of 99
personnel, will not hesitate to enforce the full extent of the law in
disciplining and purging from the Judiciary all those who are not
befitting the integrity and dignity of the institution, even if such
enforcement would lead to the maximum penalty of dismissal from the
service despite their length of service.
WHEREFORE, respondent Sheriff Margarito A. Costelo, Jr. is found
GUILTY of grave misconduct, grave abuse of authority, and falsification
of official document; and is DISMISSED from the service with forfeiture
of all benefits and privileges, except accrued leave credits, if any, and
with prejudice to re-employment in any branch or agency of the
government, including government-owned or controlled corporations.
This Decision shall take effect immediately.
SO ORDERED.
REYNATO S. PUNO
Chief Justice
LEONARDO A. QUISUMBING
Associate Justice
CONSUELO YNARESSANTIAGO
Associate Justice
ANTONIO T. CARPIO
Associate Justice
RENATO C. CORONA
Associate Justice
On official leave
CONCHITA CARPIO
MORALES*
Associate Justice
MINITA V. CHICO NAZARIO

Associate Justice
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PRESBITERO J. VELASCO, JR.

Associate Justice
TERESITA J. LEONARDO-DE
CASTRO
Associate Justice
DIOSDADO M. PERALTA
Associate Justice
ANTONIO EDUARDO B.
NACHURA
Associate Justice
ARTURO D. BRION
Associate Justice
LUCAS P. BERSAMIN
Associate Justice
Id. at 71-83.
10
Id. at 80.
11
Id. at 156-158.
12
Rollo, Vol. II, pp. 31-32.
13
Rollo, Vol. I, pp. 228-241.
14
Id. at 43-44.
15
Id. at 46.
16
Id. at 238-241.
17
Id. at 242-245.
18
Rollo (Vol. II), pp. 35-46.
19
Id. at 58.
20
Id. at 48-52.
21
Id. at 55.
Footnotes
*
On official leave.
Rollo, Vol. I, pp. 8-13.
Id. at 187-189.
Docketed as Civil Case No. R-36953, entitled "Doris Sunbanon v.

Aurora Go."
3
Rollo, Vol. I, p. 15.
Id. at 16.
Id. at 26-28.
Id. at 46-49.
Id. at 50.
Page 9 of 99
Sec. 6. Personal service. Service of the papers may be made

by delivering personally a copy of the party or his counsel, or by
leaving it in his office with his clerk or with a person having
charge thereof, if no person is found in his office, or his office is
not known, or he has no office, then by leaving the copy, between
the hours of eight in the morning and six in the evening, at the
partys or counsels residence, if known, with a person of
sufficient age and discretion then residing therein.
22
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23
Rollo, Vol. I, p. 35
24
Id. at 237-238.
25
Emphasis supplied.
Firaza v. People of the Philippines, G.R. No. 154721, March 22,

2007, 518 SCRA 681, 692-693.
26
27
A.M. No. P-04-1875, February 6, 2008, 544 SCRA 1, 7.
Vilar v. Angel, A.M. P-06-2276, February 5, 2007, 514 SCRA

147, 153, citing Civil Service Commission v. Cortez, 430 SCRA
593 (2004).
28
29
A.M. No. 03-06-13-SC effective June 1, 2004.
Promulgated by the Civil Service Commission through

Resolution No. 99-1936 dated August 31, 1999 and implemented
by Memorandum Circular No. 19, series of 1999.
30
31
A.M. No. P-00-1445, April 30, 2003, 402 SCRA 21.
Flores v. Marquez, A.M. P-06-2277, December 6, 2006, 510

SCRA 35, 44.
32
Page 10 of 99
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SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 172671
April 16, 2009
MARISSA R. UNCHUAN, Petitioner,

vs.
ANTONIO J.P. LOZADA, ANITA LOZADA and THE REGISTER OF
DEEDS OF CEBU CITY, Respondents.
DECISION
QUISUMBING, J.:
For review are the Decision1 dated February 23, 2006 and
Resolution2 dated April 12, 2006 of the Court of Appeals in CA-G.R. CV.
No. 73829. The appellate court had affirmed with modification the
Order3 of the Regional Trial Court (RTC) of Cebu City, Branch 10
reinstating its Decision4 dated June 9, 1997.
The facts of the case are as follows:
Sisters Anita Lozada Slaughter and Peregrina Lozada Saribay were the
registered co-owners of Lot Nos. 898-A-3 and 898-A-4 covered by
Transfer Certificates of Title (TCT) Nos. 532585 and 532576 in Cebu City.
The sisters, who were based in the United States, sold the lots to their
nephew Antonio J.P. Lozada (Antonio) under a Deed of Sale7 dated March
11, 1994. Armed with a Special Power of Attorney8 from Anita, Peregrina
went to the house of their brother, Dr. Antonio Lozada (Dr. Lozada),
located at 4356 Faculty Avenue, Long Beach California.9 Dr. Lozada
Page 11 of 99
agreed to advance the purchase price of US$367,000 or P10,000,000 for

Antonio, his nephew. The Deed of Sale was later notarized and
authenticated at the Philippine Consuls Office. Dr. Lozada then
forwarded the deed, special power of attorney, and owners copies of the
titles to Antonio in the Philippines. Upon receipt of said documents, the
latter recorded the sale with the Register of Deeds of Cebu. Accordingly,
TCT Nos. 12832210 and 12832311 were issued in the name of Antonio
Lozada.
Pending registration of the deed, petitioner Marissa R. Unchuan caused
the annotation of an adverse claim on the lots. Marissa claimed that
Anita donated an undivided share in the lots to her under an
unregistered Deed of Donation12 dated February 4, 1987.
Antonio and Anita brought a case against Marissa for quieting of title
with application for preliminary injunction and restraining order.
Marissa for her part, filed an action to declare the Deed of Sale void and
to cancel TCT Nos. 128322 and 128323. On motion, the cases were
consolidated and tried jointly.
At the trial, respondents presented a notarized and duly authenticated
sworn statement, and a videotape where Anita denied having donated
land in favor of Marissa. Dr. Lozada testified that he agreed to advance
payment for Antonio in preparation for their plan to form a corporation.
The lots are to be eventually infused in the capitalization of Damasa
Corporation, where he and Antonio are to have 40% and 60% stake,
respectively. Meanwhile, Lourdes G. Vicencio, a witness for respondents
confirmed that she had been renting the ground floor of Anitas house
since 1983, and tendering rentals to Antonio.
For her part, Marissa testified that she accompanied Anita to the office of
Atty. Cresencio Tomakin for the signing of the Deed of Donation. She
allegedly kept it in a safety deposit box but continued to funnel monthly
rentals to Peregrinas account.
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A witness for petitioner, one Dr. Cecilia Fuentes, testified on Peregrinas

medical records. According to her interpretation of said records, it was
physically impossible for Peregrina to have signed the Deed of Sale on
March 11, 1994, when she was reported to be suffering from edema.
Peregrina died on April 4, 1994.
In a Decision dated June 9, 1997, RTC Judge Leonardo B. Caares
disposed of the consolidated cases as follows:
WHEREFORE, judgment is hereby rendered in Civil Case No. CEB-16145,
to wit:
1. Plaintiff Antonio J.P. Lozada is declared the absolute owner of
the properties in question;
2. The Deed of Donation (Exh. "9") is declared null and void, and
Defendant Marissa R. Unchuan is directed to surrender the
original thereof to the Court for cancellation;
3. The Register of Deeds of Cebu City is ordered to cancel the
annotations of the Affidavit of Adverse Claim of defendant
Marissa R. Unchuan on TCT Nos. 53257 and 53258 and on such
all other certificates of title issued in lieu of the aforementioned
certificates of title;
4. Defendant Marissa R. Unchuan is ordered to pay Antonio J.P.
Lozada and Anita Lozada Slaughter the sum of P100,000.00 as
moral damages; exemplary damages of P50,000.00; P50,000.00
for litigation expenses and attorneys fees of P50,000.00; and
5. The counterclaims of defendant Marissa R. Unchuan [are]
DISMISSED.
In Civil Case No. CEB-16159, the complaint is hereby DISMISSED.
Page 12 of 99
In both cases, Marissa R. Unchuan is ordered to pay the costs of suit.

SO ORDERED.13
On motion for reconsideration by petitioner, the RTC of Cebu City,
Branch 10, with Hon. Jesus S. dela Pea as Acting Judge, issued an
Order14 dated April 5, 1999. Said order declared the Deed of Sale void,
ordered the cancellation of the new TCTs in Antonios name, and
directed Antonio to pay Marissa P200,000 as moral damages, P100,000
as exemplary damages, P100,000 attorneys fees and P50,000 for
expenses of litigation. The trial court also declared the Deed of Donation
in favor of Marissa valid. The RTC gave credence to the medical records
of Peregrina.
Respondents moved for reconsideration. On July 6, 2000, now with Hon.
Soliver C. Peras, as Presiding Judge, the RTC of Cebu City, Branch 10,
reinstated the Decision dated June 9, 1997, but with the modification
that the award of damages, litigation expenses and attorneys fees were
disallowed.
Petitioner appealed to the Court of Appeals. On February 23, 2006 the
appellate court affirmed with modification the July 6, 2000 Order of the
RTC. It, however, restored the award of P50,000 attorneys fees
and P50,000 litigation expenses to respondents.
Thus, the instant petition which raises the following issues:
I.
WHETHER THE COURT OF APPEALS ERRED AND VIOLATED
PETITIONERS RIGHT TO DUE PROCESS WHEN IT FAILED TO RESOLVE
PETITIONERS THIRD ASSIGNED ERROR.
II.
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WHETHER THE HONORABLE SUPREME COURT MAY AND SHOULD

REVIEW THE CONFLICTING FACTUAL FINDINGS OF THE HONORABLE
REGIONAL TRIAL COURT IN ITS OWN DECISION AND RESOLUTIONS ON
THE MOTIONS FOR RECONSIDERATION, AND THAT OF THE
HONORABLE COURT OF APPEALS.
III.
WHETHER THE HONORABLE COURT OF APPEALS ERRED IN HOLDING
THAT PETITIONERS CASE IS BARRED BY LACHES.
IV.
WHETHER THE HONORABLE COURT OF APPEALS ERRED IN HOLDING
THAT THE DEED OF DONATION EXECUTED IN FAVOR OF PETITIONER
IS VOID.
V.
WHETHER THE HONORABLE COURT OF APPEALS ERRED IN NOT
HOLDING THAT ANITA LOZADAS VIDEOTAPED STATEMENT IS
HEARSAY.15
Simply stated, the issues in this appeal are: (1) Whether the Court of
Appeals erred in upholding the Decision of the RTC which declared
Antonio J.P. Lozada the absolute owner of the questioned properties; (2)
Whether the Court of Appeals violated petitioners right to due process;
and (3) Whether petitioners case is barred by laches.
Petitioner contends that the appellate court violated her right to due
process when it did not rule on the validity of the sale between the
sisters Lozada and their nephew, Antonio. Marissa finds it anomalous
that Dr. Lozada, an American citizen, had paid the lots for Antonio. Thus,
she accuses the latter of being a mere dummy of the former. Petitioner
Page 13 of 99
begs the Court to review the conflicting factual findings of the trial and
appellate courts on Peregrinas medical condition on March 11, 1994
and Dr. Lozadas financial capacity to advance payment for Antonio.
Likewise, petitioner assails the ruling of the Court of Appeals which
nullified the donation in her favor and declared her case barred by
laches. Petitioner finally challenges the admissibility of the videotaped
statement of Anita who was not presented as a witness.
On their part, respondents pray for the dismissal of the petition for
petitioners failure to furnish the Register of Deeds of Cebu City with a
copy thereof in violation of Sections 316 and 4,17 Rule 45 of the Rules. In
addition, they aver that Peregrinas unauthenticated medical records
were merely falsified to make it appear that she was confined in the
hospital on the day of the sale. Further, respondents question the
credibility of Dr. Fuentes who was neither presented in court as an
expert witness18 nor professionally involved in Peregrinas medical care.
Further, respondents impugn the validity of the Deed of Donation in
favor of Marissa. They assert that the Court of Appeals did not violate
petitioners right to due process inasmuch as it resolved collectively all
the factual and legal issues on the validity of the sale.
Faithful adherence to Section 14,19 Article VIII of the 1987 Constitution is
indisputably a paramount component of due process and fair play. The
parties to a litigation should be informed of how it was decided, with an
explanation of the factual and legal reasons that led to the conclusions of
the court.20
In the assailed Decision, the Court of Appeals reiterates the rule that a
notarized and authenticated deed of sale enjoys the presumption of
regularity, and is admissible without further proof of due execution. On
the basis thereof, it declared Antonio a buyer in good faith and for value,
despite petitioners contention that the sale violates public policy. While
it is a part of the right of appellant to urge that the decision should
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directly meet the issues presented for resolution,21 mere failure by the
appellate court to specify in its decision all contentious issues raised by
the appellant and the reasons for refusing to believe appellants
contentions is not sufficient to hold the appellate courts decision
contrary to the requirements of the law22 and the Constitution.23 So long
as the decision of the Court of Appeals contains the necessary findings of
facts to warrant its conclusions, we cannot declare said court in error if
it withheld "any specific findings of fact with respect to the evidence for
the defense."24 We will abide by the legal presumption that official duty
has been regularly performed,25 and all matters within an issue in a case
were laid down before the court and were passed upon by it.26
In this case, we find nothing to show that the sale between the sisters
Lozada and their nephew Antonio violated the public policy prohibiting
aliens from owning lands in the Philippines. Even as Dr. Lozada
advanced the money for the payment of Antonios share, at no point
were the lots registered in Dr. Lozadas name. Nor was it contemplated
that the lots be under his control for they are actually to be included as
capital of Damasa Corporation. According to their agreement, Antonio
and Dr. Lozada are to hold 60% and 40% of the shares in said
corporation, respectively. Under Republic Act No. 7042,27 particularly
Section 3,28 a corporation organized under the laws of the Philippines of
which at least 60% of the capital stock outstanding and entitled to vote
is owned and held by citizens of the Philippines, is considered a
Philippine National. As such, the corporation may acquire disposable
lands in the Philippines. Neither did petitioner present proof to belie
Antonios capacity to pay for the lots subjects of this case.
Petitioner, likewise, calls on the Court to ascertain Peregrinas physical
ability to execute the Deed of Sale on March 11, 1994. This essentially
necessitates a calibration of facts, which is not the function of this
Court.29Nevertheless, we have sifted through the Decisions of the RTC
and the Court of Appeals but found no reason to overturn their factual
findings. Both the trial court and appellate court noted the lack of
Page 14 of 99
substantial evidence to establish total impossibility for Peregrina to

execute the Deed of Sale.
In support of its contentions, petitioner submits a copy of Peregrinas
medical records to show that she was confined at the Martin Luther
Hospital from February 27, 1994 until she died on April 4, 1994.
However, a Certification30 from Randy E. Rice, Manager for the Health
Information Management of the hospital undermines the authenticity of
said medical records. In the certification, Rice denied having certified or
having mailed copies of Peregrinas medical records to the Philippines.
As a rule, a document to be admissible in evidence, should be previously
authenticated, that is, its due execution or genuineness should be first
shown.31 Accordingly, the unauthenticated medical records were
excluded from the evidence. Even assuming that Peregrina was confined
in the cited hospital, the Deed of Sale was executed on March 11, 1994, a
month before Peregrina reportedly succumbed to Hepato Renal Failure
caused by Septicemia due to Myflodysplastic Syndrome.32 Nothing in the
records appears to show that Peregrina was so incapacitated as to
prevent her from executing the Deed of Sale. Quite the contrary, the
records reveal that close to the date of the sale, specifically on March 9,
1994, Peregrina was even able to issue checks33 to pay for her attorneys
professional fees and her own hospital bills. At no point in the course of
the trial did petitioner dispute this revelation.
Now, as to the validity of the donation, the provision of Article 749 of the
Civil Code is in point:
art. 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.
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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.
When the law requires that a contract be in some form in order that it
may be valid or enforceable, or that a contract be proved in a certain
way, that requirement is absolute and indispensable.34 Here, the Deed of
Donation does not appear to be duly notarized. In page three of the deed,
the stamped name of Cresencio Tomakin appears above the words
Notary Public until December 31, 1983 but below it were the
typewritten words Notary Public until December 31, 1987. A closer
examination of the document further reveals that the
number 7 in 1987and Series of 1987 were merely superimposed.35 This
was confirmed by petitioners nephew Richard Unchuan who testified
that he saw petitioners husband write 7 over 1983 to make it appear
that the deed was notarized in 1987. Moreover, a Certification36 from
Clerk of Court Jeoffrey S. Joaquino of the Notarial Records Division
disclosed that the Deed of Donation purportedly identified in Book No. 4,
Document No. 48, and Page No. 35 Series of 1987 was not reported and
filed with said office. Pertinent to this, the Rules require a party
producing a document as genuine which has been altered and appears to
have been altered after its execution, in a part material to the question in
dispute, to account for the alteration. He may show that the alteration
was made by another, without his concurrence, or was made with the
consent of the parties affected by it, or was otherwise properly or
innocently made, or that the alteration did not change the meaning or
language of the instrument. If he fails to do that, the document shall, as in
this case, not be admissible in evidence.371avvphi1
Remarkably, the lands described in the Deed of Donation are covered by
TCT Nos. 7364538 and 73646,39 both of which had been previously
cancelled by an Order40 dated April 8, 1981 in LRC Record No. 5988. We
find it equally puzzling that on August 10, 1987, or six months after
Anita supposedly donated her undivided share in the lots to petitioner,
Page 15 of 99
the Unchuan Development Corporation, which was represented by

petitioners husband, filed suit to compel the Lozada sisters to surrender
their titles by virtue of a sale. The sum of all the circumstances in this
case calls for no other conclusion than that the Deed of Donation
allegedly in favor of petitioner is void. Having said that, we deem it
unnecessary to rule on the issue of laches as the execution of the deed
created no right from which to reckon delay in making any claim of
rights under the instrument.
Finally, we note that petitioner faults the appellate court for not
excluding the videotaped statement of Anita as hearsay evidence.
Evidence is hearsay when its probative force depends, in whole or in
part, on the competency and credibility of some persons other than the
witness by whom it is sought to be produced. There are three reasons
for excluding hearsay evidence: (1) absence of cross-examination; (2)
absence of demeanor evidence; and (3) absence of oath.41 It is a
hornbook doctrine that an affidavit is merely hearsay evidence where its
maker did not take the witness stand.42 Verily, the sworn statement of
Anita was of this kind because she did not appear in court to affirm her
averments therein. Yet, a more circumspect examination of our rules of
exclusion will show that they do not cover admissions of a party;43 the
videotaped statement of Anita appears to belong to this class. Section 26
of Rule 130 provides that "the act, declaration or omission of a party as
to a relevant fact may be given in evidence against him. It has long been
settled that these admissions are admissible even if they are
hearsay.44Indeed, there is a vital distinction between admissions against
interest and declaration against interest. Admissions against interest are
those made by a party to a litigation or by one in privity with or
identified in legal interest with such party, and are admissible whether
or not the declarant is available as a witness. Declaration against interest
are those made by a person who is neither a party nor in privity with a
party to the suit, are secondary evidence and constitute an exception to
the hearsay rule. They are admissible only when the declarant is
unavailable as a witness.45 Thus, a mans acts, conduct, and
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declaration, wherever made, if voluntary, are admissible against him, for

the reason that it is fair to presume that they correspond with the truth,
and it is his fault if they do not.46However, as a further qualification,
object evidence, such as the videotape in this case, must be
authenticated by a special testimony showing that it was a faithful
reproduction.47 Lacking this, we are constrained to exclude as evidence
the videotaped statement of Anita. Even so, this does not detract from
our conclusion concerning petitioners failure to prove, by preponderant
evidence, any right to the lands subject of this case.
Anent the award of moral damages in favor of respondents, we find no
factual and legal basis therefor. Moral damages cannot be awarded in the
absence of a wrongful act or omission or fraud or bad faith. When the
action is filed in good faith there should be no penalty on the right to
litigate. One may have erred, but error alone is not a ground for moral
damages.48 The award of moral damages must be solidly anchored on a
definite showing that respondents actually experienced emotional and
mental sufferings. Mere allegations do not suffice; they must be
substantiated by clear and convincing proof.49 As exemplary damages
can be awarded only after the claimant has shown entitlement to moral
damages,50 neither can it be granted in this case.
Page 16 of 99
WE CONCUR:
CONCHITA CARPIO MORALES
Associate Justice
DANTE O. TINGA
Associate Justice

Associate Justice
ARTURO D. BRION
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of
the Courts Division.
Associate Justice
Chairperson
CERTIFICATION
WHEREFORE, the instant petition is DENIED. The Decision dated

February 23, 2006, and Resolution dated April 12, 2006 of the Court of
Appeals in CA-G.R. CV. No. 73829 are AFFIRMED with MODIFICATION.
The awards of moral damages and exemplary damages in favor of
respondents are deleted. No pronouncement as to costs.
SO ORDERED.
Associate Justice
Chairperson
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
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Footnotes
Rollo, pp. 35-51. Penned by Associate Justice Pampio A.
Abarintos, with Associate Justices Enrico A. Lanzanas and
Apolinario D. Bruselas, Jr. concurring.
1
Id. at 62-63.
Id. at 173-176. Dated July 6, 2000. Penned by Judge Soliver C.

Peras.
Page 17 of 99
SEC. 3. Docket and other lawful fees; proof of service of

petition. Unless he has theretofore done so, the petitioner shall
pay the corresponding docket and other lawful fees to the clerk
of court of the Supreme Court and deposit the amount of P500.00
for costs at the time of the filing of the petition. Proof of service of
a copy thereof on the lower court concerned and on the adverse
party shall be submitted together with the petition. (Emphasis
supplied.)
16
Id. at 95-155. Penned by Judge Leonardo B. Caares.
Records, Vol. I, pp. 355-358.
Id. at 351-354.
Id. at 347-350.
Records, Vol. II, pp. 187-188.
TSN, August 19, 1996, p. 8.
10
Records, Vol. I, p. 278.
11
Id. at 279.
12
Id. at 344-346.
13
Rollo, pp. 154-155.
14
15
Id. at 156-172.
Id. at 235-236.
SEC. 4. Contents of petition. The petition shall be filed in

eighteen (18) copies, with the original copy intended for the
court being indicated as such by the petitioner, and shall (a) state
the full name of the appealing party as the petitioner and the
adverse party as respondent, without impleading the lower
courts or judges thereof either as petitioners or respondents; (b)
indicate the material dates showing when notice of the judgment
or final order or resolution subject thereof was received, when a
motion for new trial or reconsideration, if any, was filed and
when notice of the denial thereof was received; (c) set forth
concisely a statement of the matters involved, and the reasons or
arguments relied on for the allowance of the petition; (d) be
accompanied by a clearly legible duplicate original, or a certified
true copy of the judgment or final order or resolution certified by
the clerk of court of the court a quo and the requisite number of
plain copies thereof, and such material portions of the record as
would support the petition; and (e) contain a sworn certification
against forum shopping as provided in the last paragraph of
section 2, Rule 42.
17
18
TSN, April 25, 1996, p. 6.
Sec. 14. No decision shall be rendered by any court without

expressing therein clearly and distinctly the facts and the law on
which it is based.
19
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Yao v. Court of Appeals, G.R. No. 132428, October 24, 2000, 344
SCRA 202, 219.
outstanding and entitled to vote is owned and held by

citizens of the Philippines.
20
21
Id. at 218.
22
Rules of Court, Rule 36, Sec. 1

SECTION 1. Rendition of judgments and final orders.A
judgment or final order determining the merits of the
case shall be in writing personally and directly prepared
by the judge, stating clearly and distinctly the facts and
the law on which it is based, signed by him, and filed with
the clerk of the court.
J. G. Bernas, Constitutional Structure and Powers of

Government Notes and Cases Part I 632 (3rd ed., 2005).
23
24
25
26
Twin Towers Condominium Corporation v. Court of Appeals, G.R.

No. 123552, February 27, 2003, 398 SCRA 203, 222.
29
30
Records, Vol. II, pp. 375-376.
31
S. A.F. Apostol, Essentials of Evidence 438 (1991).
32
Records, Vol. II, p. 320.
33
Id. at 238-241.
34
Civil Code, Art. 1356.
35
Records, Vol. II, p. 357.
36
Id. at 248.
37
Rules of Court, Rule 132, Sec. 31.
38
Records, Vol. I, p. 295.
39
Id. at 296.
40
Id. at 408-418.
Id.
Rules of Court, Rule 131, Sec.3, par. (m).
Rules of Court, Rule 131, Sec.3, par. (o).
An Act to Promote Foreign Investments, Prescribe the

Procedures for Registering Enterprises Doing Business in the
Philippines, and for Other Purposes, approved on June 13, 1991.
Page 18 of 99
27
28
sec. 3. Definitions.As used in this Act:

(a) the term "Philippine National" shall mean a citizen of
the Philippines or a domestic partnership or association
wholly owned by citizens of the Philippines; or a
corporation organized under the laws of the Philippines
of which at least sixty percent (60%) of the capital stock
Estrada v. Desierto, G.R. Nos. 146710-15 & 146738, April 3,

2001, 356 SCRA 108, 128.
41
People v. Quidato, Jr., G.R. No. 117401, October 1, 1998, 297

SCRA 1, 8.
42
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43
Estrada v. Desierto, supra at 131.
44
Id.
II F. D. Regalado, Remedial Law Compendium 491 (6th Revised

ed. 1989).
45
46
United States v. Ching Po, 23 Phil. 578, 583 (1912).
47
S. A.F. Apostol, Essentials of Evidence 63 (1991).
Filinvest Credit Corporation v. Mendez, No. L-66419, July 31,

1987, 152 SCRA 593, 601.
48
Quezon City Government v. Dacara, G.R. No. 150304, June 15,

2005, 460 SCRA 243, 256.
49
50
Id. at 257.
Page 19 of 99
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SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 162886
August 11, 2008
HEIRS OF THE DECEASED SPOUSES VICENTE S. ARCILLA and JOSEFA

ASUNCION ARCILLA, namely: Aida Arcilla Alandan, Rene A. Arcilla,
Oscar A. Arcilla, Sarah A. Arcilla, and Nora A. Arcilla, now deceased
and substituted by her son Sharmy Arcilla, represented by their
attorney-in-fact, SARAH A. ARCILLA, petitioners,
vs.
MA. LOURDES A. TEODORO, respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court assailing the September 12, 2003 Decision1 of the
Court of Appeals (CA) and its Resolution2 dated March 24, 2004 in CAG.R. SP No. 72032.
The facts of the case are as follows:
On December 19, 1995, Ma. Lourdes A. Teodoro (respondent) initially
filed with the Regional Trial Court (RTC) of Virac, Catanduanes an
application for land registration of two parcels of land located at
Barangay San Pedro, Virac, Catanduanes. The lots, with an aggregate
area of 284 square meters, are denominated as Lot Nos. 525-A and 525B, Csd.-05-010483-D of the Virac Cadastre. Respondent alleged that, with
the exception of the commercial building constructed thereon, she
Page 20 of 99
purchased the subject lots from her father, Pacifico Arcilla (Pacifico), as
shown by a Deed of Sale3 dated December 9, 1966, and that, prior
thereto, Pacifico acquired the said lots by virtue of the partition of the
estate of his father, Jose Arcilla evidenced by a document entitled
Extrajudicial Settlement of Estate.4 Respondent also presented as
evidence an Affidavit of Quit-Claim5 in favor of Pacifico, executed by
herein petitioners as Heirs of Vicente Arcilla (Vicente), brother of
Pacifico.
On February 7, 1996, the case was transferred to the Municipal Trial
Court (MTC) of Virac, Catanduanes in view of the expanded jurisdiction
of said court as provided under Republic Act No. 7691.6
In their Opposition dated August 19, 1996, petitioners contended that
they are the owners pro-indiviso of the subject lots including the building
and other improvements constructed thereon by virtue of inheritance
from their deceased parents, spouses Vicente and Josefa Arcilla; contrary
to the claim of respondent, the lots in question were owned by their
father, Vicente, having purchased the same from a certain Manuel
Sarmiento sometime in 1917; Vicente's ownership is evidenced by
several tax declarations attached to the record; petitioners and their
predecessors-in-interest had been in possession of the subject lots since
1906. Petitioners moved to dismiss the application of respondent and
sought their declaration as the true and absolute owners pro-indiviso of
the subject lots and the registration and issuance of the corresponding
certificate of title in their names.
Subsequently, trial of the case ensued.
On March 20, 1998, herein respondent filed a Motion for
Admission7 contending that through oversight and inadvertence she
failed to include in her application, the verification and certificate
against forum shopping required by Supreme Court (SC) Revised
Circular No. 28-91 in relation to SC Administrative Circular No. 04-94.
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Petitioners filed a Motion to Dismiss Application8 on the ground that

respondent should have filed the certificate against forum shopping
simultaneously with the petition for land registration which is a
mandatory requirement of SC Administrative Circular No. 04-94 and that
any violation of the said Circular shall be a cause for the dismissal of the
application upon motion and after hearing.
Page 21 of 99
Aggrieved by the RTC Decision, petitioners filed a Petition for

Review14 with the CA. On September 12, 2003, the CA promulgated its
presently assailed Decision dismissing the Petition. Petitioners filed a
Motion for Reconsideration but the same was denied by the CA in its
Resolution15 dated March 24, 2004.
Hence, the herein petition based on the following grounds:
Opposing the motion to dismiss, respondents asserted that the

petitioners' Motion to Dismiss Application was filed out of time;
respondent's failure to comply with SC Administrative Circular No. 0494 was not willful, deliberate or intentional; and the Motion to Dismiss
was deemed waived for failure of petitioners to file the same during the
earlier stages of the proceedings.
On July 19, 1999, the MTC issued an Order9 denying petitioners' Motion
to Dismiss Application.
On June 25, 2001, the MTC rendered a
of which reads as follows:
Decision10
the dispositive portion
NOW THEREFORE, and considering all the above premises, the

Court finds and so holds that Applicant MA. LOURDES A.
TEODORO, having sufficient title over this land applied for
hereby renders judgment, which should be, as it is hereby
CONFIRMED and REGISTERED in her name.
IT IS SO ORDERED.11
Herein petitioners then filed an appeal with the Regional Trial Court of
Virac, Catanduanes. In its Decision12 dated February 22, 2002, the RTC,
Branch 43, of Virac, Catanduanes dismissed the appeal for lack of merit
and affirmed in toto the Decision of the MTC. Petitioners filed a Motion
for Reconsideration but it was denied by the RTC in its Order13 of July 22,
2002.
A. The Honorable Court of Appeals did not rule in accordance

with the prevailing rules and jurisprudence when it held that the
belated filing, after more than two (2) years and three (3)
months from the initial application for land registration, of a
sworn certification against forum shopping in Respondent's
application for land registration, constituted substantial
compliance with SC Admin. Circular No. 04-94.
B. The Honorable Court of Appeals did not rule in accordance
with prevailing laws and jurisprudence when it held that the
certification of non-forum shopping subsequently submitted by
respondent does not require a certification from an officer of the
foreign service of the Philippines as provided under Section 24,
Rule 132 of the Rules of Court.
C. The Honorable Court of Appeals did not rule in accordance
with prevailing laws and jurisprudence when it upheld the
decisions of the Regional Trial Court (RTC) and Municipal Trial
Court (MTC) that the lots in question were not really owned by
Petitioners' father Vicente S. Arcilla, contrary to the evidence
presented by both parties.
D. The Honorable Court of Appeals did not rule in accordance
with prevailing laws and jurisprudence when it sustained the
decision of the RTC which affirmed in toto the decision of the
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MTC and in not reversing the same and rendering judgment in

favor of Petitioners.16
In their Memorandum, petitioners further raise the following issue:
Whether or not the Supreme Court may inquire into conclusions of facts
made by the Honorable Court of Appeals in the instant Petition.17
The Courts Ruling
The petition is bereft of merit.
The CA ruled correctly when it held that the belated filing of a
sworn certification of non-forum shopping was substantial
compliance with SC Administrative Circular No. 04-94.
Under the attendant circumstances in the present case, the Court cannot
uphold petitioners contention that respondent's delay of more than two
years and three months in filing the required certificate of non-forum
shopping may not be considered substantial compliance with the
requirements of SC Administrative Circular No. 04-94 and Section 5,
Rule 7 of the Rules of Court; that respondent's reasons of oversight and
inadvertence do not constitute a justifiable circumstance that could
excuse her non-compliance with the mandatory requirements of the
above-mentioned Circular and Rule; that subsequent compliance with
the requirement does not serve as an excuse for a party's failure to
comply in the first instance.
Section 5, Rule 7, of the Rules of Court provides:
Sec. 5. Certification against forum shopping. The plaintiff or
principal party shall certify under oath in the complaint or other
initiatory pleading asserting a claim for relief, or in a sworn
certification annexed thereto and simultaneously filed therewith:
Page 22 of 99
(a) that he has not theretofore commenced any action or filed

any claim involving the same issues in any court, tribunal or
quasi-judicial agency and, to the best of his knowledge, no such
other action or claim is pending therein; (b) if there is such other
pending action or claim, a complete statement of the present
status thereof; and (c) if he should thereafter learn that the same
or similar action or claim has been filed or is pending, he shall
report that fact within five (5) days therefrom to the court
wherein his aforesaid complaint or initiatory pleading has been
filed.
Failure to comply with the foregoing requirements shall not be
curable by mere amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion and after
hearing. The submission of a false certification or noncompliance with any of the undertakings therein shall constitute
indirect contempt of court, without prejudice to the
corresponding administrative and criminal actions. If the acts of
the party or his counsel clearly constitute willful and deliberate
forum shopping, the same shall be ground for summary
dismissal with prejudice and shall constitute direct contempt as
well as a cause for administrative sanctions.
This Rule was preceded by Circular No. 28-91, which originally required
the certification of non-forum shopping for petitions filed with this Court
and the CA; and SC Administrative Circular No. 04-94, which extended
the certification requirement for civil complaints and other initiatory
pleadings filed in all courts and other agencies.
In Gabionza v. Court of Appeals,18 this Court has held that Circular No. 2891 was designed to serve as an instrument to promote and facilitate the
orderly administration of justice and should not be interpreted with
such absolute literalness as to subvert its own ultimate and legitimate
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objective or the goal of all rules of procedure which is to achieve

substantial justice as expeditiously as possible.19 The same guideline still
applies in interpreting what is now Section 5, Rule 7 of the 1997 Rules of
Civil Procedure.20
The Court is fully aware that procedural rules are not to be belittled or
simply disregarded, for these prescribed procedures insure an orderly
and speedy administration of justice.21 However, it is equally settled that
litigation is not merely a game of technicalities.22 Rules of procedure
should be viewed as mere tools designed to facilitate the attainment of
justice.23 Their strict and rigid application, which would result in
technicalities that tend to frustrate rather than promote substantial
justice, must always be eschewed.24 Even the Rules of Court reflect this
principle.25
Moreover, the emerging trend in our jurisprudence is to afford every
party-litigant the amplest opportunity for the proper and just
determination of his cause free from the constraints of technicalities.26
It must be kept in mind that while the requirement of the certificate of
non-forum shopping is mandatory, nonetheless the requirement must
not be interpreted too literally and thus defeat the objective of
preventing the undesirable practice of forum shopping.27 In Uy v. Land
Bank of the Philippines,28 the Court ruled, thus:
The admission of the petition after the belated filing of the
certification, therefore, is not unprecedented. In those cases
where the Court excused non-compliance with the requirements,
there were special circumstances or compelling reasons making
the strict application of the rule clearly unjustified. In the case at
bar, the apparent merits of the substantive aspects of the case
should be deemed as a "special circumstance" or "compelling
reason" for the reinstatement of the petition. x x x29
Page 23 of 99
Citing De Guia v. De Guia30 the Court, in Estribillo v. Department of

Agrarian Reform,31 held that even if there was complete non-compliance
with the rule on certification against forum-shopping, the Court may still
proceed to decide the case on the merits pursuant to its inherent power
to suspend its own rules on grounds of substantial justice and apparent
merit of the case.
In the instant case, the Court finds that the lower courts did not commit
any error in proceeding to decide the case on the merits, as herein
respondent was able to submit a certification of non-forum shopping.
More importantly, the apparent merit of the substantive aspect of the
petition for land registration filed by respondent with the MTC coupled
with the showing that she had no intention to violate the Rules with
impunity, as she was the one who invited the attention of the court to
the inadvertence committed by her counsel, should be deemed as special
circumstances or compelling reasons to decide the case on the merits.
In addition, considering that a dismissal contemplated under Rule 7,
Section 5 of the Rules of Court is, as a rule, a dismissal without prejudice,
and since there is no showing that respondent is guilty of forum
shopping, to dismiss respondent's petition for registration would entail a
tedious process of re-filing the petition, requiring the parties to resubmit the pleadings which they have already filed with the trial court,
and conducting anew hearings which have already been done, not to
mention the expenses that will be incurred by the parties in re-filing of
pleadings and in the re-conduct of hearings. These would not be in
keeping with the judicial policy of just, speedy and inexpensive
disposition of every action and proceeding.32
The certification of non-forum shopping executed in a foreign
country is not covered by Section 24, Rule 132 of the Rules of Court.
There is no merit to petitioners contentions that the verification and
certification subsequently submitted by respondent did not state the
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country or city where the notary public exercised her notarial functions;
and that the MTC simply concluded, without any basis, that said notary
public was from Maryland, USA; that even granting that the verification
and certification of non-forum shopping were notarized in the USA, the
same may not be deemed admissible for any purpose in the Philippines
for failure to comply with the requirement of Section 24, Rule 132 of the
Rules of Court that the notarized document must be accompanied by a
certificate issued by an officer in the foreign service of the Philippines
who is stationed in the country in which a record of the subject
document is kept, proving or authenticating that the person who
notarized the document is indeed authorized to do so and has custody of
the same.
The Court agrees with the disquisition of the CA, to wit:
From the foregoing provision [referring to Section 24, Rule 132,
Rules of Court], it can be gathered that it does not include
documents acknowledged before [a] notary public abroad. For
foreign public documents to be admissible for any purpose here
in our courts, the same must be certified by any officer of the
Philippine legation stationed in the country where the
documents could be found or had been executed. However, after
judicious studies of the rule, Sec. 24, Rule 132 of the 1997 Rules
of Court basically pertains to written official acts, or records of
the official of the sovereign authority, official bodies and
tribunals, and public officers, whether of the Philippines, or of a
foreign country. This is so, as Sec. 24, Rule 132 explicitly refers
only to paragraph (a) of Sec. 19. If the rule comprehends to cover
notarial documents, the rule could have included the same. Thus,
petitioners-oppositors' contention that the certificate of forum
shopping that was submitted was defective, as it did not bear the
certification provided under Sec. 24, Rule 132 of the Rules of
Court, is devoid of any merit. What is important is the fact that
the respondent-applicant certified before a commissioned officer
Page 24 of 99
clothed with powers to administer oath that [s]he has not and
will not commit forum shopping.33
The ruling of the Court in Lopez v. Court of Appeals,34 cited by petitioners,
is inapplicable to the present case because the Rules of Evidence which
were in effect at that time were the old Rules prior to their amendment
in 1989. The rule applied in Lopez, which was decided prior to the
effectivity of the amended Rules of Evidence,35 was Section 25, Rule 132,
to wit:
Sec. 25. Proof of public or official record An official record or
an entry therein, when admissible for any purpose, may be
evidenced by an official publication thereof or by a copy attested
by the officer having the legal custody of the record, or by his
deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the custody. If
the office in which the record is kept is in a foreign country,
the certificate may be made by a secretary of embassy or
legation, consul general, consul, vice consul, or consular
agent or by any officer in the foreign service of the
Philippines stationed in the foreign country in which the
record is kept, and authenticated by the seal of his office.
(Emphasis supplied)
When the Rules of Evidence were amended in 1989, Section 25, Rule 132
became Section 24, Rule 132; and the amendment consisted in the
deletion of the introductory phrase "An official record or an entry
therein," which was substituted by the phrase "The record of public
documents referred to in paragraph (a) of Section 19."
Thus, Section 24, Rule 132 of the Rules of Court now reads as follows:
Sec. 24. Proof of official record. - The record of public
documents referred to in paragraph (a) of Section 19, when
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admissible for any purpose, may be evidenced by an official

publication thereof or by a copy attested by the officer having
legal custody of the record, or by his deputy, and accompanied, if
the record is not kept in the Philippines, with a certificate that
such officer has the custody. If the office in which the record is
kept is in a foreign country, the certificate may be made by a
secretary of the embassy or legation, consul general, consul, vice
consul or consular agent or by any officer in the foreign service
of the Philippines stationed in the foreign country in which the
record is kept, and authenticated by the seal of his office.
(Emphasis supplied)
Section 19(a) of the same Rule provides:
Sec. 19. Classes of documents. - For the purpose of their
presentation in evidence, documents are either public or private.
Page 25 of 99
enumerated in Section 19(a), to wit: written official acts or records of

the official acts of the sovereign authority, official bodies and tribunals,
and public officers of the Philippines or of a foreign country. The Court
agrees with the CA that had the Court intended to include notarial
documents as one of the public documents contemplated by the
provisions of Section 24, it should not have specified only the documents
referred to under paragraph (a) of Section 19.
In Lopez, the requirements of then Section 25, Rule 132 were made
applicable to all public or official records without any distinction
because the old rule did not distinguish. However, in the present rule, it
is clear under Section 24, Rule 132 that its provisions shall be made
applicable only to the documents referred to under paragraph (a),
Section 19, Rule 132.
The CA did not err in sustaining the findings of fact and conclusion
of law of the MTC and the RTC.
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.
It cannot be overemphasized that the required certification of an officer
in the foreign service under Section 24 refers only to the documents
Settled is the rule that the trial courts findings of fact, especially when
affirmed by the CA, are generally binding and conclusive upon this
Court.36 There are recognized exceptions to this rule, among which are:
(1) the conclusion is grounded on speculations, surmises or conjectures;
(2) the inference is manifestly mistaken, absurd or impossible; (3) there
is grave abuse of discretion; (4) the judgment is based on a
misapprehension of facts; (5) the findings of fact are conflicting; (6)
there is no citation of specific evidence on which the factual findings are
based; (7) the finding of absence of facts is contradicted by the presence
of evidence on record; (8) the findings of the CA are contrary to the
findings of the trial court; (9) the CA manifestly overlooked certain
relevant and undisputed facts that, if properly considered, would justify
a different conclusion; (10) the findings of the CA are beyond the issues
of the case; and (11) such findings are contrary to the admissions of both
parties.37 However, petitioners failed to show that any of the exceptions
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Page 26 of 99
is present in the instant case to warrant a review of the findings of fact of

the lower courts.
ownership for taxation purposes is evidence of ownership or of the right

to possess realty when not supported by other effective proofs.40
Petitioners insist that the documents which were presented in evidence

by respondent to prove her ownership of the subject lot are rife with
defects and inconsistencies. Petitioners contend that the subject lot
should not have been included in the Extrajudicial Settlement of the
Estate of Jose Arcilla, because he was no longer the owner of the said
property at the time of said settlement; the Deed of Sale should be
declared null and void because the seller, Pacifico Arcilla, was not the
owner of the subject lands at the time the said Deed was executed; the
Affidavit of Quitclaim is not valid and has no force and effect considering
that the document indicates that the signatures of petitioners were
affixed in different places, none of which is in Virac, Catanduanes where
they supposedly acknowledged said document.
In addition, the Court agrees with the CA when it held that if Vicente, in
fact, owned the disputed properties, his widow, Josefa, would not have
agreed to include said lots among those partitioned in the Extrajudicial
Settlement of the Estate of Jose.
The only evidence of petitioners to prove their claim that the disputed
property was sold by Jose Arcilla to Manuel Sarmiento in 1908 is a single
Tax Declaration in the name of the latter, with a notation that the
property was acquired by purchase.
The Court agrees with the CA in its finding that petitioners failed to
present any substantial evidence, such as a deed of sale, to prove their
claim that their predecessor, Vicente Arcilla, bought the disputed
property from Sarmiento. Petitioners were only able to present tax
declarations in Vicente's name to prove their allegation that Vicente
became the owner of the subject property. The tax declarations
presented in evidence by petitioners are not supported by any other
substantial proofs.
The Court has ruled time and again that tax declarations do not prove
ownership but are at best anindicium of claims of ownership.38 Payment
of taxes is not proof of ownership, any more than indicating possession
in the concept of an owner.39 Neither a tax receipt nor a declaration of
On the other hand, respondent's claim of ownership is not only backed

up by tax declarations but also by other pieces of evidence such as the
subject Extrajudicial Settlement, Affidavit of Quitclaim, and Deed of Sale.
Petitioners question the validity of the above-mentioned documents.
However, as the CA, RTC and MTC found, these documents are all
notarized. It is settled that a notarized document is executed to lend
truth to the statements contained therein and to the authenticity of the
signatures.41 Notarized documents enjoy the presumption of regularity
which can be overturned only by clear and convincing evidence.42
Petitioners' bare denials of the contents of the subject documents will
not suffice to overcome the presumption of their regularity considering
that they are all notarized. To overthrow such presumption of regularity,
the countervailing evidence must be clear, convincing and more than
merely preponderant, which petitioners failed to present.43
An examination of the subject Extrajudicial Settlement of Estate clearly
shows that the disputed lot forms part of the properties adjudicated in
favor of Pacifico Arcilla, respondents predecessor-in-interest.
Moreover, petitioners themselves admit that the Extrajudicial
Settlement being referred to in the Affidavit of Quitclaim executed by
petitioner and her co-heirs is the Extrajudicial Settlement of the Estate of
Jose Arcilla and not of Vicente Arcilla. An examination of the Affidavit of
Quitclaim shows that the reference made therein with respect to the
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date of execution of the said Extrajudicial Settlement as well as the

notary public who acknowledged the same and the Document Number,
Page Number, Book Number and Series Number all coincide with those
appearing in the document evidencing the Extrajudicial Settlement of
the Estate of Jose Arcilla. Hence, what has been waived by petitioners is
their right, if any, to the properties mentioned in the said Affidavit of
Quitclaim, which includes the presently disputed lot.
Petitioners posit that they are not bound by the subject Extrajudicial
Settlement because they did not participate in nor did they sign the
document evidencing such settlement and that their mother who signed
on their behalf was not, in fact, authorized to do so. However, the Court
agrees with the ruling of the RTC that the Extrajudicial Settlement is a
public document, the same having been notarized; that such document is
entitled to full faith and credit in the absence of competent evidence
showing that its execution was tainted with defects and irregularities
which would warrant a declaration of nullity; that in the absence of
evidence showing that the person who signed in behalf of herein
petitioners was, in fact, not authorized to do so, the presumption that
she had the authority, as stated in the Extrajudicial Settlement, remains
undisturbed.
Moreover, petitioners' execution of the subject Affidavit of Quitclaim is
proof that they have ratified the contents of the disputed Extrajudicial
Settlement.
Petitioners' claim that the Affidavit of Quitclaim is null and void on the
ground that the signatories thereto are not residents of Virac,
Catanduanes and that they affixed their signature in places other than
Virac, Catanduanes where they supposedly acknowledged the said
document, is not persuasive. The Court finds no error in the finding of
the MTC, as affirmed by the CA, that the execution of the subject Affidavit
of Quitclaim or the signatures of the affiants appearing therein were
Page 27 of 99
never contested nor raised as an issue and that petitioner Sarah Arcilla
herself acknowledged her own signature in the said Affidavit.
In any event, the law does not require that parties to a document
notarized by a notary public should be residents of the place where the
said document is acknowledged or that they affix their signature in the
presence of the notary public. What is necessary is that the persons who
signed a notarized document are the very same persons who executed
and personally appeared before the notary public in order to attest to
the contents and truth of what are stated therein.44
In the instant case, it is established that, with the exception of petitioner
Rene Arcilla, all of herein petitioners, including their now deceased
mother Josefa and sister Nora, executed and personally acknowledged
before the notary public the subject Affidavit of Quitclaim. Hence, aside
from Rene, the said Affidavit of Quitclaim is valid and binding on all the
petitioners.
With respect to Rene, petitioner Oscar Arcilla, acting as his attorney-infact, signed the document on the formers behalf. However, settled is the
rule that:
A member of the bar who performs an act as a notary public
should not notarize a document unless the persons who signed
the same are the very same persons who executed and
personally appeared before him. The acts of the affiants cannot
be delegated to anyone for what are stated therein are facts of
which they have personal knowledge. They should swear to the
document personally and not through any representative.
Otherwise, their representatives name should appear in the said
documents as the one who executed the same. That is the only
time the representative can affix his signature and personally
appear before the notary public for notarization of the said
document. Simply put, the party or parties who executed the
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instrument must be the ones to personally appear before the

notary public to acknowledge the document.45
Page 28 of 99
favor of respondent establish respondents ownership over the disputed

property.
Thus, the herein subject Affidavit of Quitclaim may not be binding on

Rene. Nonetheless, with or without Renes participation in the quitclaim,
respondents ownership of the subject lots has been established by
preponderance of evidence, as unanimously found by the MTC, the RTC
and the CA.
WHEREFORE, the petition is DENIED. The Decision of the Court of

Appeals dated September 12, 2003 and its Resolution of March 24, 2004
in CA-G.R. SP No. 72032 are AFFIRMED.
Finally, petitioners' physical occupation of the commercial building

which they erected on the disputed property does not necessarily prove
their ownership of the subject lots.
SO ORDERED.
Costs against petitioners.
MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice
This Court has held that:

ownership and possession are two entirely different legal
concepts. Just as possession is not a definite proof of ownership,
neither is non-possession inconsistent with ownership. The first
paragraph of Article 1498 of the Civil Code states that when the
sale is made through a public instrument, the execution thereof
shall be equivalent to the delivery of the thing which is the object
of the contract, if from the deed the contrary does not appear or
cannot clearly be inferred.Possession, along with ownership,
is transferred to the vendee by virtue of the notarized deed
of conveyance. Thus, in light of the circumstances of the
present case, it is of no legal consequence that petitioner did
not take actual possession or occupation of the disputed lot
after the execution of the deed of sale in her favor because
she was already able to perfect and complete her ownership
of and title over the subject property.46(Emphasis supplied)
The Extrajudicial Settlement of Estate in favor of Pacifico, respondents
predecessor-in-interest, the Affidavit of Quitclaim and the Deed of Sale in
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MINITA V. CHICO-NAZARIO
Associate Justice
ANTONIO EDUARDO B. NACHURA

Associate Justice
RUBEN T. REYES
Associate Justice
ATTESTATION
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Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division
REYNATO S. PUNO
Chief Justice
Annex "H" to Petition, id. at 109.
Annex "J" to Petition, id. at 115.
Entitled: An Act Expanding the Jurisdiction of the Metropolitan

Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts , Amending for the Purpose Batas Pambansa Blg. 129,
Otherwise Known as the "Judiciary Reorganization Act of 1980."
6
Annex "D" to Petition, CA rollo, p. 99.
Annex "E" to Petition, id. at 102.
Annex "G" to Petition, id. at 107.
10
Annex "A" to Petition, id. at 73-87.
11
Id. at 87.
12
Annex "B" to Petition, id. at 88-97.
13
Annex "C" to Petition, id. at 98.
14
Id. at 11.
15
Id. at 296.
16
Rollo, pp. 35-36.
17
Id. at 237-238.
Footnotes
Penned by Justice Buenaventura J. Guerrero with the
concurrence of Justices Andres B. Reyes, Jr. and Regalado E.
Maambong; rollo, p. 8.
Page 29 of 99
Id. at 95.
Annex "I" to Petition, CA rollo, p. 114
Gabionza v. Court of Appeals, G.R. No. 112547, July 18, 1994,

234 SCRA 192, 198.
18
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Manuel v. Galvez, G.R. No. 147394, August 11, 2004, 436 SCRA
96, 110.
19
Estribillo v. Department of Agrarian Reform, G.R. No. 159674,

June 30, 2006, 494 SCRA 218, 233-234.
Page 30 of 99
32
See Rule 1, Section 6 of the Rules of Court.
33
CA Decision, rollo, p. 90.
34
No. L-77008, December 29, 1987, 156 SCRA 838.
20
Barnes v. Padilla, G.R. No. 160753, June 28, 2005, 461 SCRA
533,538 citing Ginete v. Court of Appeals, G.R. No. 127596,
September 24, 1988, 292 SCRA 38 and Sanchez v. Court of
Appeals, G.R. No. 152766, June 20, 2003, 404 SCRA 540.
21
22
The amendments to the Rules of Evidence were made effective

on July 1, 1989.
35
Sandejas v. Ignacio, Jr., G.R. No. 155033, December 19, 2007,

541 SCRA 61, 74.
36
Barnes v. Padilla, supra.

37
23
Id. at 74-75.
Barnes v. Padilla, supra at 541

Heirs of Emilio Santioque v. Heirs of Emilio Calma, G.R. No.
160832, October 27, 2006, 505 SCRA 665, 682; Abing v.
Waeyan, G.R. No. 146294, July 31, 2006, 497 SCRA 202, 208-209.
38
24
Id.
25
Id.
Anadon v. Herrera, G.R. No. 159153, July 9, 2007, 527 SCRA 90,
96-97; Villena v. Rupisan, G.R. No. 167620, April 4, 2007, 520
SCRA 346, 361.
39
Id.
40
Id.
26
Llemos v. Llemos, G.R. No. 150162, January 26, 2007, 513 SCRA
128, 139.
41
Varorient Shipping Co., Inc. v. National Labor Relations

Commission, G.R. No. 164940, November 28, 2007, 539 SCRA 131,
140.
27
28
G.R. No. 136100, July 24, 2000, 336 SCRA 419.
29
Id. at 429.
42
Tapuroc .v Loquellano Vda. de Mende, G.R. No. 152007, January

22, 2007, 512 SCRA 97, 109.
43
Fulgencio v. Martin, A.C. No. 3223, May 29, 2003, 403 SCRA
216, 221.
44
30
G.R. No. 135384, April 4, 2001, 356 SCRA 287, 294-295.
31
Supra note 18.
Id.
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Bautista v. Bernabe, A.C. No. 6963, February 9, 2006, 482 SCRA

1, 7-8.
45
Tating v. Marcella, G.R. No. 155208, March 27, 2007, 519 SCRA
79, 90-91.
46
Page 31 of 99
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SUPREME COURT
Baguio City
THIRD DIVISION
G.R. No. 152364
April 15, 2010
ALEJANDRA S. LAZARO, assisted by her husband, ISAURO M.

LAZARO; LEONCIO D. SANTOS; ADOLFO SANTOS; NENITA S. LACAR;
ANGELINA S. SAGLES, assisted by her husband, ALBERTO SANTOS,
JR.; REGINA SANTOS and FABIAN SANTOS, Petitioners,
vs.
MODESTA AGUSTIN, FILEMON AGUSTIN, VENANCIA AGUSTIN,
MARCELINA AGUSTIN, PAUL A. DALALO, NOEL A. DALALO,
GREGORIO AGUSTIN and BIENVENIDO AGUSTIN, Respondents.
DECISION
PERALTA, J.:
Assailed in the present petition for review on certiorari is the
Decision1 dated February 21, 2002 of the Court of Appeals (CA) in CAG.R. SP No. 63321. The CA had affirmed, with modification, the
Decision2 dated February 6, 2001 of the Regional Trial Court (RTC) of
Laoag City, Branch 13, in Civil Case No. 11951-13, which also affirmed,
with modification, the Decision3 dated January 6, 2000 of the Municipal
Trial Court in Cities (MTCC) of Laoag City, Branch 1, in Civil Case No.
2834.
The factual and procedural antecedents of the case are as follows:
Page 32 of 99
On November 4, 1998, herein petitioners filed against herein

respondents a Complaint4 for partition with the MTCC of Laoag City,
alleging as follows:
xxxx
II
That the plaintiffs and the defendants are the descendants of the
late Simeon C. Santos, married to Trinidad Duldulao, who died
intestate leaving a parcel of land situated in the Barrio of
Natividad Nstra. Sra., Municipality of Laoag, designated as Lot
No. 10675 of the Cadastral Survey of Laoag;
III
That Simeon C. Santos during his lifetime, married to Trinidad
Duldulao, begot four (4) legitimate children, namely: Basilisa D.
Santos, Alberto D. Santos, Leoncio D. Santos and Alejandra D.
Santos. Basilisa D. Santos, [who] was married to Petronilo
Agustin, is now deceased; Alberto Santos, married to Rizalina
Guerrero, is now deceased, while Leoncio D. Santos, married to
Dictinia Tabeta, and Alejandra D. Santos married to Isauro M.
Lazaro, are still living;
IV
That in the desire of the children of Simeon C. Santos from whom
the parcel of land originated as owner, his children, namely[:]
Alberto, Leoncio and Alejandra, all surnamed Santos, consented
that the parcel of land mentioned in paragraph II of this
complaint be titled in the name of Basilisa, the latter being the
eldest and so Original Certificate of Title No. 20742 in the name
of Basilisa Santos was obtained although it was agreed among
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Prof. Avena
them that it did not and does not necessarily mean that Basilisa
Santos is the sole and exclusive owner of this parcel of land, and
as embodied in the Title obtained in the name of Basilisa Santos,
the parcel of land is particularly described as follows:
A parcel of land (Lot No. 10676 of the Cadastral survey of Laoag),
with the improvements thereon, situated in the Barrio of
Natividad Nstra. Sra., Municipality of Laoag. Bounded on the NE.
by Lot No. 10677; on the SE. by Panganiban Street; on the SW. by
Lot No. 10672; and on NW. by Lot No. 1065, containing an area of
three hundred and one (301) square meters, more or less,
covered by Tax Declaration No. 010-00224 for the year 1994 in
the names of Modesta Agustin, et al. with a market value
of P96,320.00 and an assessed value of P14,450.00.
V
That there is a residential house constructed on the lot described
in paragraph IV of this complaint and in the construction of
which plaintiff Alejandra Santos, then still single, spent the
amount of P68,308.60, while Basilisa Santos and her children
spent the amount of P3,495.00. Afterwards, Alejandra Santos got
married to Isauro M. Lazaro who was employed in a private
company and when he retired from the service, some additional
constructions were made on the residential house and lot such as
a bedroom, azotea, two (2) toilets, two (2) kitchens, a car garage,
the money spent for these additional constructions came from
the earnings of the spouses Alejandra Santos-Lazaro and Isauro
M. Lazaro. The said residential house is now covered by Tax
Declaration No. 010-00225 in the names of Basilio Agustin
(should be Basilisa Agustin) and Alejandra Santos for the year
1994 with a market value of P93,920.00 and an assessed value of
zero;
Page 33 of 99
VI
That without the knowledge and consent of the plaintiffs, the

title of the lot described in paragraph IV of the complaint was
transferred into another title which is now Transfer Certificate of
Title No. T-20695 in the names of Modesta Agustin, Filemon
Agustin, Venancia Agustin, Marcelina Agustin, Monica Agustin,
Gregorio Agustin and Bienvenido Agustin who are the children of
the late Basilisa Santos-Agustin who are herein named as
defendants with Monica Agustin now deceased represented by
her children Paul A. Dalalo and Noel A. Dalalo as defendants;
VII
That during the lifetime of Basilisa Santos-Agustin, plaintiff
Alejandra Santos-Lazaro informed the former, who are sisters,
that the transfer of the title covering the lot described in
paragraph IV of this complaint in the name of Basilisa Santos into
the names of her children would erroneously imply that the lot is
solely and exclusively owned by Basilisa Santos-Agustin's
children, but Basilisa Santos-Agustin replied [to] plaintiff
Alejandra Santos-Lazaro not to worry because an affidavit was
already executed by her recognizing and specifying that her
brothers Alberto Santos and Leoncio Santos, and her sister
Alejandra Santos-Lazaro would each get one fourth () share of
the lot;
VIII
That in a move to determine if the children and the heirs of
Basilisa Santos-Agustin, namely: Modesta Agustin, Filemon
Agustin, Venancia Agustin, Marcelina Agustin, Paul Dalalo and
Noel Dalalo who are the successors of their mother the late
Monica Agustin, Gregorio Agustin and Bienvenido Agustin would
Law 126 Evidence
Prof. Avena
follow the line of thinking of their mother and grandmother of

Paul A. Dalalo and Noel A. Dalalo on the shares of the lot and
residential house erected on it, the plaintiffs initiated a partition
in the barangay court where the lot is situated described in
paragraph IV of this complaint, but that the children of Basilisa
Santos-Agustin and her grandchildren Paul A. Dalalo and Noel A.
Dalalo refused and opposed the partition claiming that they are
the sole and exclusive owners of the lot being that the lot is now
titled in their names, and hence there was no settlement as
shown by the certification of the barangay court hereto attached
as annex "A";
Page 34 of 99
agreement between the plaintiffs and defendants themselves

that in the ownership, the plaintiffs have a share over the lot;
2. The defendants are the ones paying for the real estate taxes of
said land;
3. Some of the plaintiffs were able to stay on the subject house
because defendants' mother Basilisa Santos was the eldest
sibling and she had to take care of her brother Leoncio and sister
Alejandra when these siblings were not yet employed and
Basilisa allowed them to reside in the house constructed within
the lot; Alejandra Santos stayed in the house up to the present
with the agreement that she will spend for the renovation of the
house in lieu of monthly rentals that she has to pay when she
already became financially able;
IX
That plaintiffs now invoke the intervention of the court to
partition the lot in accordance with the law on intestate
succession and to partition the residential house as specified
below. x x x
4. Prior to 1962, subject property was mortgaged by Basilisa

Santos Agustin to the Philippine National Bank and the property
was foreclosed by PNB when the loan was not paid, hence, TCT
No. (T-9522)-4495, under the name of the Philippine National
Bank was issued (Annex "A"). Thereafter, Basilisa SantosAgustin, purchased it from the PNB and TCT No. T-5662 was
issued under her name (Annex "B"); the property was later on
transferred to her direct descendants, the defendants herein as
evidenced by TCT No. T-20695 (Annex "C");
x x x x5
Petitioners also prayed for the grant of attorney's fees, moral and
exemplary damages, and costs of suit.
Herein respondents filed their Answer with Counterclaim,6 raising the
following as their Special/Affirmative Defenses:
x x x x7
1. The subject parcel of land is owned exclusively by the
defendants as heirs of the late Basilisa Santos, wife of Petronilo
Agustin, who was the original registered owner of the property
evidenced by OCT No. 20742; the plaintiffs never became owners
of said land. There was never any agreement between the
ascendants of the plaintiffs and defendants, neither is there any
Respondents then prayed that petitioners' complaint be dismissed. In

their Counterclaim, respondents asked the court to direct petitioners to
pay reasonable compensation for the latter's use of the disputed
property, exemplary and moral damages, attorney's fees, and costs of
suit.
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Prof. Avena
Page 35 of 99
After the issues were joined and the pre-trial was terminated, trial on
the merits ensued.
the appellants [herein petitioners] in the amount of P68,308.60 as

proved by them.
On January 6, 2000, the MTCC rendered its Decision8 dismissing the

complaint and denying petitioners' prayer for partition.
Considering the apparent error of the lower court in quoting the

questioned lot as Lot No. 10675, the same is hereby corrected so as to
reflect the correct lot number as Lot No. 10676 to conform to the
evidence presented.
The MTCC ruled, among others, that no evidentiary value could be given
to the affidavit allegedly executed by Basilisa, wherein she purportedly
acknowledged her co-ownership of the subject property with her
siblings Alberto, Leoncio and Alejandra, because the affiant was not
presented on the witness stand, such that all the statements made in her
affidavit were hearsay. Moreover, the MTCC held that two credible
witnesses testified in plain, simple and straightforward manner that at
the time the affidavit was supposed to have been signed and sworn to
before the notary public, Basilisa was already bedridden and an invalid
who could not even raise her hand to feed herself. In addition, the MTCC
also gave credence to the testimony of the notary public, before whom
the document was supposedly signed and sworn to, that the said
affidavit was already complete and thumbmarked when the same was
presented to him by a person who claimed to be Basilisa.
SO ORDERED.10
Aggrieved by the RTC Decision, petitioners filed a petition for review
with the CA.
On February 21, 2002, the CA issued its presently assailed Decision
disposing as follows:
WHEREFORE, the decision dated February 6, 2001 rendered in Civil
Case No. 11951-13 is hereby AFFIRMED subject to the MODIFICATION
that appellees [herein respondents] pay the amount of P68,308.60 in
indemnity solely to appellant Alejandra Santos-Lazaro.
Petitioners filed an appeal with the RTC of Laoag City.
SO ORDERED.11
On February 6, 2001 the RTC issued a Decision9 affirming, with

modification, the judgment of the MTCC. The RTC found that the house
erected on the disputed lot was built and renovated by petitioners in
good faith. As a consequence, the RTC held that petitioners were entitled
to indemnity representing the costs of the construction and renovation
of the said house. The dispositive portion of the RTC Decision, thus,
reads:
Hence, the instant petition based on the following grounds:
WHEREFORE, the decision of the lower court is hereby affirmed with the
modification directing the appellees [herein respondents] to indemnify
I. THE SWORN STATEMENT OF BASILISA S. AGUSTIN IS A

DECLARATION AGAINST INTEREST WHICH ESTABLISHES THE COOWNERSHIP OF LOT NO. 10676 BY AND AMONG THE PETITIONERS
AND RESPONDENTS AS HEIRS OF THE LATE SIMEON C. SANTOS.12
II. THE CO-OWNERSHIP OF LOT NO. 10676 BY AND AMONG BASILISA S.
AGUSTIN, ALBERTO D. SANTOS, ALEJANDRA S. LAZARO AND LEONCIO
D. SANTOS DID NOT TERMINATE AS A RESULT OF THE TRANSFER OF
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Prof. Avena
THE LOT'S OWNERSHIP PRECIPITATED BY ACTS OF BASILISA S.

AGUSTIN WITH RESPECT TO THE SUBJECT PROPERTY.13
III. PETITIONER ALEJANDRA S. LAZARO IS A CO-OWNER OF THE
RESIDENTIAL HOUSE ON LOT NO. 10676 NOT MERELY A BUILDER IN
GOOD FAITH WITH RESPECT THERETO AND AS SUCH, IS ENTITLED TO
A PARTITION OF THE SUBJECT HOUSE.14
In their first assigned error, petitioners contend that Basilisa's sworn
statement which recognizes her siblings' share in the disputed property
is a declaration against interest which is one of the recognized
exceptions to the hearsay rule. Petitioners argue that since the sworn
statement was duly notarized, it should be admitted in court without
further proof of its due execution and authenticity; that the testimonies
of Basilisa's nurse and physician cannot qualify as clear and convincing
evidence which could overthrow such notarized document; that the
notary public cannot impugn the same document which he notarized for
to do so would render notarized documents worthless and unreliable
resulting in prejudice to the public.
As to the second assigned error, petitioners aver that their co-ownership
of the questioned property with Basilisa did not cease to exist when the
Philippine National Bank (PNB) consolidated its ownership over the said
parcel of land. Petitioners assert that they did not lose their share in the
property co-owned when their share was mortgaged by Basilisa without
their knowledge and consent; that the mortgage was limited only to the
portion that may be allotted to Basilisa upon termination of their coownership; that PNB acquired ownership only of the share pertaining to
Basilisa; that when Basilisa bought back the property from PNB, she
simply re-acquired the portion pertaining to her and simply resumed coownership of the property with her siblings. Petitioners also contend
that Basilisa's children did not acquire ownership of the subject lot by
prescription, and that neither Basilisa nor respondents repudiated their
co-ownership.
Page 36 of 99
Anent the third assignment of error, petitioners argue that Alejandra

Lazaro, being a co-owner of the disputed parcel of land and not simply a
builder in good faith, is entitled to a partition of the subject residential
house.
At the outset, it bears to point out that it is wrong for petitioners to
argue that Basilisa's alleged sworn statement is a declaration against
interest. It is not a declaration against interest. Instead, it is an admission
against interest.1avvphi1
Indeed, there is a vital distinction between admissions against interest
and declarations against interest. Admissions against interest are those
made by a party to a litigation or by one in privity with or identified in
legal interest with such party, and are admissible whether or not the
declarant is available as a witness.15 Declarations against interest are
those made by a person who is neither a party nor in privity with a party
to the suit, are secondary evidence, and constitute an exception to the
hearsay rule. They are admissible only when the declarant is unavailable
as a witness.16 In the present case, since Basilisa is respondents'
predecessor-in-interest and is, thus, in privity with the latter's legal
interest, the former's sworn statement, if proven genuine and duly
executed, should be considered as an admission against interest.
A cursory reading of the subject sworn statement also reveals that it
refers to a parcel of land denominated as Lot No. 10678 while the
property being disputed is Lot No. 10676.17 On this basis, it cannot be
concluded with certainty that the property being referred to in the
sworn statement is the same property claimed by petitioners.
Having made the foregoing observations and discussions, the question
that arises is whether the subject sworn statement, granting that it
refers to the property being disputed in the present case, can be given
full faith and credence in view of the issues raised regarding its
genuineness and due execution.
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Prof. Avena
The Court rules in the negative.

Settled is the rule that generally, a notarized document carries the
evidentiary weight conferred upon it with respect to its due execution,
and documents acknowledged before a notary public have in their favor
the presumption of regularity.18 However, this presumption is not
absolute and may be rebutted by clear and convincing evidence to the
contrary.19
Moreover, not all notarized documents are exempted from the rule on
authentication.20 Thus, an affidavit does not automatically become a
public document just because it contains a notarial jurat.21 The
presumptions that attach to notarized documents can be affirmed only
so long as it is beyond dispute that the notarization was regular.22
However, a question involving the regularity of notarization as well as
the due execution of the subject sworn statement of Basilisa would
require an inquiry into the appreciation of evidence by the trial court. It
is not the function of this Court to review, examine and evaluate or
weigh the probative value of the evidence presented. A question of fact
would arise in such event. Settled is the rule that questions of fact cannot
be raised in an appeal via certiorari before the Supreme Court and are
not proper for its consideration.23 The rationale behind this doctrine is
that a review of the findings of fact of the trial courts and the appellate
tribunal is not a function this Court normally undertakes.24 The Court
will not weigh the evidence all over again unless there is a showing that
the findings of the lower courts are totally devoid of support or are
clearly erroneous so as to constitute serious abuse of
discretion.25 Although there are recognized exceptions26 to this rule,
none exists in the present case to justify a departure therefrom.
Petitioners rely heavily on the presumption of regularity accorded by
law to notarized documents. While indeed, a notarized document enjoys
this presumption, the fact that a deed is notarized is not a guarantee of
Page 37 of 99
the validity of its contents.27 As earlier discussed, the presumption is not

absolute and may be rebutted by clear and convincing evidence to the
contrary.28 The presumption cannot be made to apply to the present
case because the regularity in the execution of the sworn statement was
challenged in the proceedings below where its prima facie validity was
overthrown by the highly questionable circumstances under which it
was supposedly executed, as well as the testimonies of witnesses who
testified on the improbability of execution of the sworn statement, as
well as on the physical condition of the signatory, at the time the
questioned document was supposedly executed. The trial and appellate
courts were unanimous in giving credence to the testimonies of these
witnesses. The Court has repeatedly held that it will not interfere with
the trial court's determination of the credibility of witnesses, unless
there appears on record some fact or circumstance of weight and
influence which has been overlooked or the significance of which has
been misinterpreted.29 The reason for this is that the trial court was in a
better position to do so, because it heard the witnesses testify before it
and had every opportunity to observe their demeanor and deportment
on the witness stand.30
Considering the foregoing, the Court finds no reason to reverse the
rulings of the MTCC, the RTC and the CA. Although the questioned sworn
statement is a public document having in its favor the presumption of
regularity, such presumption was adequately refuted by competent
witnesses.
The Court further agrees with the ruling of the RTC that:
The testimony of [the notary public] Atty. Angel Respicio did not suffice
to rebut the evidence of the appellees considering his admission that the
affidavit was already thumbmarked when presented to him by one who
claimed to be Basilisa Santos and whom, the witness said he did not
know personally. Further, what makes the documents suspect is the fact
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Prof. Avena
Page 38 of 99
that it was subscribed on the same date as the financial statement of

Alejandra Santos.
courts did not commit any error in not giving evidentiary weight to the
subject sworn statement.
It may not be amiss to point out, at this juncture, that the principal
function of a notary public is to authenticate documents.31 When a
notary public certifies to the due execution and delivery of a document
under his hand and seal, he gives the document the force of
evidence.32 Indeed, one of the purposes of requiring documents to be
acknowledged before a notary public, in addition to the solemnity which
should surround the execution and delivery of documents, is to
authorize such documents to be given without further proof of their
execution and delivery.33 A notarial document is by law entitled to full
faith and credit upon its face. Courts, administrative agencies and the
public at large must be able to rely upon the acknowledgment executed
before a notary public and appended to a private instrument.34 Hence, a
notary public must discharge his powers and duties, which are
impressed with public interest, with accuracy and fidelity.35 A notary
public should not notarize a document unless the persons who signed
the same are the very same persons who executed and personally
appeared before him to attest to the contents and truth of what are
stated therein.36
The second and third assigned errors proceed on the presumption that
petitioners are co-owners of the disputed property. Since the Court has
already ruled that the lower courts did not err in finding that petitioners
failed to prove their claim that they were co-owners of the said property,
there is no longer any need to discuss the other assigned errors.
In the instant case, the notary public should have exercised utmost
diligence in ascertaining the true identity of the person executing the
said sworn statement. However, the notary public did not comply with
this requirement. He simply relied on the affirmative answers of the
person appearing before him attesting that she was Basilisa Santos; that
the contents of the sworn statement are true; and that the thumbmark
appearing on the said document was hers. However, this would not
suffice. He could have further asked the person who appeared before
him to produce any identification to prove that she was indeed Basilisa
Santos, considering that the said person was not personally known to
him, and that the thumbmark appearing on the document sought to be
notarized was not affixed in his presence. But he did not. Thus, the lower
WHEREFORE, the petition is DENIED. The February 21, 2002 Decision

of the Court of Appeals in CA-G.R. SP No. 63321 is AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
RENATO C. CORONA
Associate Justice
Chairperson
Associate Justice
ANTONIO EDUARDO B.
NACHURA
Associate Justice
JOSE CATRAL MENDOZA

Associate Justice
ATTESTATION
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Prof. Avena
Id. at 20-23.
Id. at 21-22.
RENATO C. CORONA
Associate Justice
Third Division, Chairperson
Rollo, pp. 53-56.
Id. at 57-61.
CERTIFICATION
REYNATO S. PUNO
Chief Justice
10
Id. at 61.
11
Id. at 72.
12
Id. at 21.
13
Id. at 26.
14
Id. at 29.
Page 39 of 99
Unchuan v. Lozada, G.R. No. 172671, April 16, 2009, 585 SCRA
421, 435.
15
Footnotes
Penned by Associate Justice Oswaldo D. Agcaoili, with Associate
Justices Jose L. Sabio, Jr. and Sergio L. Pestao,
concurring; rollo, pp. 62-72.
1
16
Id.
17
See Exhibit "C," records, p. 85.
De Jesus v. Court of Appeals, G.R. No. 127857, June 20, 2006,

491 SCRA 325, 334; Pan Pacific Industrial Sales Co., Inc. v. Court of
Appeals, G.R. No. 125283, February 10, 2006, 482 SCRA 164, 174.
18
Records, pp. 301-305.
Id. at 266-269.
19
Potenciano v. Reynoso, 449 Phil. 396, 406 (2003).
Id. at 1-7.
20
Cequea v. Bolante, 386 Phil. 419, 427 (2000).
Id. at 2-4.
21
Id.
Law 126 Evidence
Prof. Avena
Dela Rama v. Papa, G.R. No. 142309, January 30, 2009, 577
SCRA 233, 244.
22
Cabang v. Basay, G.R. No. 180587, March 20, 2009, 582 SCRA
172, 186.
23
24
Id.
25
Id. at 186-187.
These recognized exceptions are: (1) when the findings are

grounded entirely on speculation, surmises or conjectures; (2)
when the inference made is manifestly mistaken, absurd or
impossible; (3) when there is grave abuse of discretion; (4) when
the judgment is based on a misapprehension of facts; (5) when
the findings of fact are conflicting; (6) when in making its
findings, the Court of Appeals went beyond the issues of the case,
or its findings are contrary to the admissions of both the
appellant and the appellee; (7) when the findings are contrary to
those of the trial court; (8) when the findings are conclusions
without citation of specific evidence on which they are based; (9)
when the facts set forth in the petition as well as in the
petitioners main and reply briefs are not disputed by the
respondent; (10) when the findings of fact are premised on the
supposed absence of evidence and contradicted by the evidence
on record (Bernaldo v. The Ombudsman and the Department of
Public Works and Highways, G.R. No. 156286, August 13, 2008,
562 SCRA 60); and (11) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties,
which, if properly considered, would justify a different
conclusion (Superlines Transportation Co., Inc. v. Philippine
National Coordinating Council, G.R. No. 169596, March 28, 2007,
519 SCRA 432, 441, citing Insular Life Assurance Co., Ltd. v. Court
of Appeals, 428 SCRA 79, 85-86 [2004]; see also Grand
26
Page 40 of 99
Placement and General Services Corporation v. Court of Appeals,

G.R. No. 142358, January 31, 2006, 481 SCRA 189, 202, citing
Mayon Hotel & Restaurant v. Adana, 458 SCRA 609, 624 [2005];
Castillo v. NLRC, 367 Phil. 603, 619 [1999] and Insular Life
Assurance Co. Ltd. v. CA, supra; Sampayan v. Court of Appeals,
G.R. No. 156360, January 14, 2005, 448 SCRA 220, 229, citing
Insular Life Assurance Co. Ltd. v. Court of Appeals,, supra, citing
Langkaan Realty Development, Inc. v. United Coconut Planters
Bank, 400 Phil. 1349, 1356 [2000]; Nokom v. National Labor
Relations Commission, 390 Phil. 1228, 1242-1243 [2000] and
Sta. Maria v. Court of Appeals, 349 Phil. 275, 282-283 [2000];
Aguirre v. Court of Appeals, 421 SCRA 310, 319 [2004]; C & S
Fishfarm Corporation v. Court of Appeals, 442 Phil. 279, 288
[2002]).
San Juan v. Offril, G.R. No. 154609, April 24, 2009, 586 SCRA
439, 445-446.
27
China Banking Corporation, Inc. v. Court of Appeals, G.R. No.

155299, July 24, 2007, 528 SCRA 103, 110.
28
29
San Juan v. Offril, supra note 27.
30
Id. at 446-447.
31
Vda. de Bernardo v. Restauro, 452 Phil. 745, 751 (2003).
32
Id.
33
Id.
34
Id.
35
Id.
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Prof. Avena
Bautista v. Bernabe, A.C. No. 6963, February 9, 2006, 482 SCRA

1, 6.
36
Page 41 of 99
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SUPREME COURT
Baguio City
SECOND DIVISION
G.R. No. 165133
April 19, 2010
SPOUSES JOSELINA ALCANTARA AND ANTONIO ALCANTARA, and

SPOUSES JOSEFINO RUBI AND ANNIE DISTOR- RUBI, Petitioners,
vs.
BRIGIDA L. NIDO, as attorney-in-fact of REVELEN N.
SRIVASTAVA, Respondent.
RESOLUTION
CARPIO, J.:
Page 42 of 99
Revelen, who is respondents daughter and of legal age, is the owner of

an unregistered land with an area of 1,939 square meters located in
Cardona, Rizal. Sometime in March 1984, respondent accepted the offer
of petitioners to purchase a 200-square meter portion of Revelens lot
(lot) at P200 per square meter. Petitioners paid P3,000 as downpayment
and the balance was payable on installment. Petitioners constructed
their houses in 1985. In 1986, with respondents consent, petitioners
occupied an additional 150 square meters of the lot. By 1987, petitioners
had already paid P17,5005 before petitioners defaulted on their
installment payments.
On 11 May 1994, respondent, acting as administrator and attorney-infact of Revelen, filed a complaint for recovery of possession with
damages and prayer for preliminary injunction against petitioners with
the RTC.
The RTCs Ruling
The Case
Spouses Antonio and Joselina Alcantara and Spouses Josefino and Annie
Rubi (petitioners) filed this Petition for Review1 assailing the Court of
Appeals (appellate court) Decision2 dated 10 June 2004 as well as the
Resolution3dated 17 August 2004 in CA-G.R. CV No. 78215. In the
assailed decision, the appellate court reversed the 17 June 2002
Decision4 of Branch 69 of the Regional Trial Court of Binangonan, Rizal
(RTC) by dismissing the case for recovery of possession with damages
and preliminary injunction filed by Brigida L. Nido (respondent), in her
capacity as administrator and attorney-in-fact of Revelen N. Srivastava
(Revelen).
The Facts
The RTC stated that based on the evidence presented, Revelen owns the
lot and respondent was verbally authorized to sell 200 square meters to
petitioners. The RTC ruled that since respondents authority to sell the
land was not in writing, the sale was void under Article 18746 of the Civil
Code.7 The RTC ruled that rescission is the proper remedy.8
On 17 June 2002, the RTC rendered its decision, the dispositive portion
reads:
WHEREFORE, judgment is rendered in favor of plaintiff and against the
defendants, by 1. Declaring the contract to sell orally agreed by the plaintiff
Brigida Nido, in her capacity as representative or agent of her
daughter Revelen Nido Srivastava, VOID and UNENFORCEABLE.
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Prof. Avena
2. Ordering the parties, upon finality of this judgment, to have

mutual restitution the defendants and all persons claiming
under them to peacefully vacate and surrender to the plaintiff
the possession of the subject lot covered by TD No. 09-0742 and
its derivative Tax Declarations, together with all permanent
improvements introduced thereon, and all improvements built
or constructed during the pendency of this action, in bad faith;
and the plaintiff, to return the sum of P17,500.00, the total
amount of the installment on the land paid by defendant; the
fruits and interests during the pendency of the condition shall be
deemed to have been mutually compensated.
3. Ordering the defendants to pay plaintiff the sum of P20,000.00
as attorneys fees, plus P15,000.00 as actual litigation expenses,
plus the costs of suit.
SO ORDERED.9
Page 43 of 99
The appellate court added that even if respondents complaint is for

recovery of possession or accion publiciana, the RTC still has no
jurisdiction to decide the case. The appellate court explained:
Note again that the complaint was filed on 11 May 1994. By that time,
Republic Act No. 7691 was already in effect. Said law took effect on 15
April 1994, fifteen days after its publication in the Malaya and in the
Time Journal on 30 March 1994 pursuant to Sec. 8 of Republic Act No.
7691.
Accordingly, Sec. 33 of Batas Pambansa 129 was amended by Republic
Act No. 7691 giving the Municipal Trial Court the exclusive original
jurisdiction over all civil actions involving title to, or possession of, real
property, or any interest therein where the assessed value of the
property or interest therein does not exceed P20,000 or, in civil actions
in Metro Manila, where such assessed value does not exceed P50,000,
exclusive of interest, damages of whatever kind, attorneys fees,
litigation expenses and costs.
The Appellate Courts Ruling

On 5 January 2004, petitioners appealed the trial courts Decision to the
appellate court. In its decision dated 10 June 2004, the appellate court
reversed the RTC decision and dismissed the civil case.10
The appellate court explained that this is an unlawful detainer case. The
prayer in the complaint and amended complaint was for recovery of
possession and the case was filed within one year from the last demand
letter. Even if the complaint involves a question of ownership, it does not
deprive the Municipal Trial Court (MTC) of its jurisdiction over the
ejectment case. Petitioners raised the issue of lack of jurisdiction in their
Motion to Dismiss and Answer before the RTC.11 The RTC denied the
Motion to Dismiss and assumed jurisdiction over the case because the
issues pertain to a determination of the real agreement between the
parties and rescission of the contract to sell the property.12
At bench, the complaint alleges that the whole 1,939- square meter lot of
Revelen N. Srivastava is covered by Tax Declaration No. 09-0742 (Exh.
"B", p. 100, Records) which gives its assessed value of the whole lot
of P4,890.00. Such assessed value falls within the exclusive original
prerogative or jurisdiction of the first level court and, therefore, the
Regional Trial Court a quo has no jurisdiction to try and decided the
same.131avvphi1
The appellate court also held that respondent, as Revelens agent, did not
have a written authority to enter into such contract of sale; hence, the
contract entered into between petitioners and respondent is void. A void
contract creates no rights or obligations or any juridical relations.
Therefore, the void contract cannot be the subject of rescission.14
Law 126 Evidence
Prof. Avena
Aggrieved by the appellate courts Decision, petitioners elevated the case

before this Court.
Page 44 of 99
Sale of Land through an Agent
Articles 1874 and 1878 of the Civil Code provide:

Issues
Petitioners raise the following arguments:
1. The appellate court gravely erred in ruling that the contract
entered into by respondent, in representation of her daughter,
and former defendant Eduardo Rubi (deceased), is void; and
2. The appellate court erred in not ruling that the petitioners are
entitled to their counterclaims, particularly specific
performance.15
Ruling of the Court
Art. 1874. When a sale of a piece of land or any interest therein is

through an agent, the authority of the latter shall be in writing;
otherwise, the sale shall be void.
Art. 1878. Special powers of attorney are necessary in the following
cases:
xxx
(5) To enter into any contract by which the ownership of an immovable
is transmitted or acquired either gratuitously or for a valuable
consideration;
We deny the petition.
xxx
Petitioners submit that the sale of land by an agent who has no written
authority is not void but merely voidable given the spirit and intent of
the law. Being only voidable, the contract may be ratified, expressly or
impliedly. Petitioners argue that since the contract to sell was
sufficiently established through respondents admission during the pretrial conference, the appellate court should have ruled on the matter of
the counterclaim for specific performance.16
Article 1874 of the Civil Code explicitly requires a written authority

before an agent can sell an immovable property. Based on a review of
the records, there is absolutely no proof of respondents written
authority to sell the lot to petitioners. In fact, during the pre-trial
conference, petitioners admitted that at the time of the negotiation for
the sale of the lot, petitioners were of the belief that respondent was the
owner of lot.19 Petitioners only knew that Revelen was the owner of the
lot during the hearing of this case. Consequently, the sale of the lot by
respondent who did not have a written authority from Revelen is void. A
void contract produces no effect either against or in favor of anyone and
cannot be ratified.20
Respondent argues that the appellate court cannot lawfully rule on

petitioners counterclaim because there is nothing in the records to
sustain petitioners claim that they have fully paid the price of the
lot.17 Respondent points out that petitioners admitted the lack of written
authority to sell. Respondent also alleges that there was clearly no
meeting of the minds between the parties on the purported contract of
sale.18
A special power of attorney is also necessary to enter into any contract

by which the ownership of an immovable is transmitted or acquired for
a valuable consideration. Without an authority in writing, respondent
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Prof. Avena
cannot validly sell the lot to petitioners. Hence, any "sale" in favor of the
petitioners is void.
Our ruling in Dizon v. Court of Appeals21 is instructive:
When the sale of a piece of land or any interest thereon is through an
agent, the authority of the latter shall be in writing; otherwise, the sale
shall be void. Thus the authority of an agent to execute a contract for the
sale of real estate must be conferred in writing and must give him
specific authority, either to conduct the general business of the principal
or to execute a binding contract containing terms and conditions which
are in the contract he did execute. A special power of attorney is
necessary to enter into any contract by which the ownership of an
immovable is transmitted or acquired either gratuitously or for a
valuable consideration. The express mandate required by law to enable
an appointee of an agency (couched) in general terms to sell must be one
that expressly mentions a sale or that includes a sale as a necessary
ingredient of the act mentioned. For the principal to confer the right
upon an agent to sell real estate, a power of attorney must so express the
powers of the agent in clear and unmistakable language. When there is
any reasonable doubt that the language so used conveys such power, no
such construction shall be given the document.
Further, Article 1318 of the Civil Code enumerates the requisites for a
valid contract, namely:
1. consent of the contracting parties;
Page 45 of 99
obtained in writing as required by law, no contract was perfected.

Consequently, petitioners failed to validly acquire the lot.
General Power of Attorney
On 25 March 1994, Revelen executed a General Power of Attorney
constituting respondent as her attorney-in-fact and authorizing her to
enter into any and all contracts and agreements on Revelens behalf. The
General Power of Attorney was notarized by Larry A. Reid, Notary Public
in California, U.S.A.
Unfortunately, the General Power of Attorney presented as "Exhibit
C"22 in the RTC cannot also be the basis of respondents written
authority to sell the lot.
Section 25, Rule 132 of the Rules of Court provides:
Sec. 25. Proof of public or official record. An official record or an entry
therein, when admissible for any purpose, may be evidenced by an
official publication thereof or by a copy attested by the officer having the
legal custody of the record, or by his deputy, and accompanied, if the
record is not kept in the Philippines, with a certificate that such officer
has the custody. If the office in which the record is kept is in a foreign
country, the certificate may be made by a secretary of embassy or
legation consul general, consul, vice consul, or consular agent or by any
officer in the foreign service of the Philippines stationed in the foreign
country in which the record is kept, and authenticated by the seal of his
office.
2. object certain which is the subject matter of the contract;

3. cause of the obligation which is established.
Respondent did not have the written authority to enter into a contract to
sell the lot. As the consent of Revelen, the real owner of the lot, was not
In Teoco v. Metropolitan Bank and Trust Company,23 quoting Lopez v.

Court of Appeals,24 we explained:
From the foregoing provision, when the special power of attorney is
executed and acknowledged before a notary public or other competent
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Prof. Avena
official in a foreign country, it cannot be admitted in evidence unless it is

certified as such in accordance with the foregoing provision of the rules
by a secretary of embassy or legation, consul general, consul, vice consul,
or consular agent or by any officer in the foreign service of the
Philippines stationed in the foreign country in which the record is kept
of said public document and authenticated by the seal of his office. A city
judge-notary who notarized the document, as in this case, cannot issue
such certification.25
Since the General Power of Attorney was executed and acknowledged in
the United States of America, it cannot be admitted in evidence unless it
is certified as such in accordance with the Rules of Court by an officer in
the foreign service of the Philippines stationed in the United States of
America. Hence, this document has no probative value.
Specific Performance
Petitioners are not entitled to claim for specific performance. It must be
stressed that when specific performance is sought of a contract made
with an agent, the agency must be established by clear, certain and
specific proof.26To reiterate, there is a clear absence of proof that
Revelen authorized respondent to sell her lot.
Jurisdiction of the RTC
Section 33 of Batas Pambansa Bilang 129,27 as amended by Republic Act
No. 7691 provides:
Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial
Courts and Municipal Circuit Trial Courts in Civil Cases. Metropolitan
Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts
shall exercise:
xxx
Page 46 of 99
(3) Exclusive original jurisdiction in all civil actions which involve title
to, possession of, real property, or any interest therein where the
assessed value of the property or interest therein does not exceed
Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila,
where such assessed value does not exceed Fifty thousand pesos
(P50,000.00) exclusive of interest, damages of whatever kind, attorneys
fees, litigation expenses and costs: x x x
In Geonzon Vda. de Barrera v. Heirs of Vicente Legaspi,28 the Court
explained:
Before the amendments introduced by Republic Act No. 7691, the
plenary action of accion publiciana was to be brought before the regional
trial court. With the modifications introduced by R.A. No. 7691 in 1994,
the jurisdiction of the first level courts has been expanded to include
jurisdiction over other real actions where the assessed value does not
exceed P20,000, P50,000 where the action is filed in Metro Manila. The
first level courts thus have exclusive original jurisdiction
over accion publiciana and accion reivindicatoria where the assessed
value of the real property does not exceed the aforestated amounts.
Accordingly, the jurisdictional element is the assessed value of the
property.
Assessed value is understood to be "the worth or value of property
established by taxing authorities on the basis of which the tax rate is
applied. Commonly, however, it does not represent the true or market
value of the property."
The appellate court correctly ruled that even if the complaint filed with
the RTC involves a question of ownership, the MTC still has jurisdiction
because the assessed value of the whole lot as stated in Tax Declaration
No. 09-0742 is P4,890.29 The MTC cannot be deprived of jurisdiction
over an ejectment case based merely on the assertion of ownership over
the litigated property, and the underlying reason for this rule is to
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Prof. Avena
prevent any party from trifling with the summary nature of an ejectment
suit.30
The general rule is that dismissal of a case for lack of jurisdiction may be
raised at any stage of the proceedings since jurisdiction is conferred by
law. The lack of jurisdiction affects the very authority of the court to take
cognizance of and to render judgment on the action; otherwise, the
inevitable consequence would make the courts decision a "lawless"
thing.31 Since the RTC has no jurisdiction over the complaint filed, all the
proceedings as well as the Decision of 17 June 2002 are void. The
complaint should perforce be dismissed.
WHEREFORE, we DENY the petition. We AFFIRM the Decision and
Resolution of the Court of Appeals in CA-G.R. CV No. 78215.
Page 47 of 99
I attest that the conclusions in the above Resolution had been reached in
ANTONIO T. CARPIO
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Resolution had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
Footnotes
ARTURO D. BRION
Associate Justice
MARIANO C. DEL CASTILLO
Associate Justice
ROBERTO A. ABAD
Associate Justice
JOSE PORTUGAL PEREZ

Associate Justice
ATTESTATION
Under Rule 45 of the Rules of Court.
Rollo, pp. 20-29. Penned by Associate Justice Conrado M.

Vasquez, Jr. with Associate Justices Rebecca De Guia-Salvador,
and Jose C. Reyes, Jr., concurring.
2
Id. at 33. Penned by Associate Justice Conrado M. Vasquez, Jr.

with Associate Justices Rebecca De Guia-Salvador, and Jose C.
Reyes, Jr., concurring.
3
CA rollo, pp. 56-64. Penned by RTC Judge Paterno G. Tiamson.
Law 126 Evidence

5
Prof. Avena
Records, p. 79.
Art. 1874. When a sale of a piece of land or any interest therein

is through an agent, the authority of the latter shall be in writing,
otherwise the sale shall be void.
Page 48 of 99
444 Phil. 161, 165-166 (2003) citing Cosmic Lumber Corp. v.

Court of Appeals, 332 Phil. 948, 957-958 (1996).
21
22
23
G.R. No. 162333, 23 December 2008, 575 SCRA 82.
24
240 Phil. 811 (1987).
25
Supra note 23 at 95-96.
CA rollo, p. 60.
Id. at 61.
Id. at 63-64.
10
Rollo, p. 28.
Litonjua, Jr. v. Eternit Corporation, G.R. No. 144805, 8 June

2006, 490 SCRA 204, 218-219.
11
Id. at 25-26.
27
The Judiciary Reorganization Act of 1980.
12
Records, p. 66.
28
G.R. No. 174346, 12 September 2008, 565 SCRA 192, 197.
13
Rollo, pp. 26-27.
29
Records, p. 100.
14
Id. at 27-28.
30
15
Id. at 15.
26
Sudaria v. Quiambao, G.R. No. 164305, 20 November 2007, 537

SCRA 689, 697.
Municipality of Sta. Fe v. Municipality of Aritao, G.R. No.
140474, 21 September 2007, 533 SCRA 586, 599.
31
16
Id. at 15-16.
17
Id. at 56.
18
Id. at 58.
19
Id. at 12.
Roberts v. Papio, G.R. No. 166714, 9 February 2007, 515 SCRA

346, 371.
20
Law 126 Evidence
Prof. Avena

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 154270
March 9, 2010
TEOFISTO OO, PRECY O. NAMBATAC, VICTORIA O. MANUGAS and

POLOR O. CONSOLACION, Petitioners,
vs.
VICENTE N. LIM, Respondent.
DECISION
BERSAMIN, J.:
The subject of controversy is Lot No. 943 of the Balamban Cadastre in
Cebu City, covered by Original Certificate of Title (OCT) No. RO-9969-(O20449), over which the contending parties in this action for quieting of
title, initiated by respondent Vicente N. Lim (Lim) in the Regional Trial
Court (RTC) in Cebu City, assert exclusive ownership, to the exclusion of
the other. In its decision dated July 30, 1996,1 the RTC favored Lim, and
ordered the cancellation of OCT No. RO-9969-(O-20449) and the
issuance of a new certificate of title in the name of Luisa Narvios-Lim
(Luisa), Lims deceased mother and predecessor-in-interest.
On appeal (CA-GR CV No. 57823), the Court of Appeals (CA) affirmed the
RTC on January 28, 2002.2 It later denied the petitioners motion for
reconsideration through the resolution dated June 17, 2002.3
Hence, this appeal via petition for review on certiorari.
Antecedents
Page 49 of 99
On October 23, 1992, Lim filed in the RTC in Cebu City a petition for the
reconstitution of the owners duplicate copy of OCT No. RO-9969-(O20449), alleging that said OCT had been lost during World War II by his
mother, Luisa;4 that Lot No. 943 of the Balamban Cadastre in Cebu City
covered by said OCT had been sold in 1937 to Luisa by Spouses Diego
Oo and Estefania Apas (Spouses Oo), the lots registered owners; and
that although the deed evidencing the sale had been lost without being
registered, Antonio Oo (Antonio), the only legitimate heir of Spouses
Oo, had executed on April 23, 1961 in favor of Luisa a notarized
document denominated asconfirmation of sale,5 which was duly filed in
the Provincial Assessors Office of Cebu.
Zosimo Oo and petitioner Teofisto Oo (Oos) opposed Lims petition,
contending that they had the certificate of title in their possession as the
successors-in-interest of Spouses Oo.
On account of the Oos opposition, and upon order of the RTC, Lim
converted the petition for reconstitution into a complaint for quieting of
title,6 averring additionally that he and his predecessor-in-interest had
been in actual possession of the property since 1937, cultivating and
developing it, enjoying its fruits, and paying the taxes corresponding to
it. He prayed, inter alia, that the Oos be ordered to surrender the
reconstituted owners duplicate copy of OCT No. RO-9969-(O-20449),
and that said OCT be cancelled and a new certificate of title be issued in
the name of Luisa in lieu of said OCT.
In their answer,7 the Oos claimed that their predecessors-in-interest,
Spouses Oo, never sold Lot No. 943 to Luisa; and that the confirmation
of sale purportedly executed by Antonio was fabricated, his signature
thereon not being authentic.
RTC Ruling
On July 30, 1996, after trial, the RTC rendered its decision,8 viz:
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Prof. Avena
WHEREFORE, premises considered, judgment is hereby rendered

quieting plaintiff's title to Lot No. 943 of the Balamban (Cebu) Cadastre,
and directing the Register of Deeds of Cebu
Page 50 of 99
him to acknowledge the instrument as true than to the testimony of the

expert witness who attested that Antonios signature was a forgery.
CA Ruling
(1) To register the aforestated April 23, 1961 Confirmation of

Sale of Lot No. 943 of the Balamban, Cebu Cadastre by Antonio
Oo in favor of Luisa Narvios-Lim;
(2) To cancel the original certificate of title covering the said Lot
No. 943 of the Balamban, Cebu Cadastre; and,
(3) To issue in the name of Luisa Narvios-Lim, a new duplicate
certificate of title No. RO-9969 (O-20449) of the Register of
Deeds of Cebu, which shall contain a memorandum of the fact
that it is issued in place of the lost duplicate certificate of title,
and shall in all respects be entitled to like faith and credit as the
original certificate, and shall be regarded as such for all purposes
of this decree, pursuant to the last paragraph of Section 109,
Presidential Decree No. 1529.
Without special pronouncement as to costs.
SO ORDERED.9
The RTC found that the Lims had been in peaceful possession of the land
since 1937; that their possession had never been disturbed by the Oos,
except on two occasions in 1993 when the Oos seized the harvested
copra from the Lims caretaker; that the Lims had since declared the lot
in their name for taxation purposes, and had paid the taxes
corresponding to the lot; that the signature of Antonio on
the confirmation of sale was genuine, thereby giving more weight to the
testimony of the notary public who had notarized the document and
affirmatively testified that Antonio and Luisa had both appeared before
On appeal, the Oos maintained that the confirmation of sale was

spurious; that the property, being a titled one, could not be acquired by
the Lims through prescription; that their (the Oos) action to claim the
property could not be barred by laches; and that the action instituted by
the Lims constituted a collateral attack against their registered
title.1avvphi1
The CA affirmed the RTC, however, and found that Spouses Oo had sold
Lot No. 943 to Luisa; and that such sale had been confirmed by their son
Antonio. The CA ruled that the action for quieting of title was not a
collateral, but a direct attack on the title; and that the Lims undisturbed
possession had given them a continuing right to seek the aid of the
courts to determine the nature of the adverse claim of a third party and
its effect on their own title.
Nonetheless, the CA corrected the RTC, by ordering that the Office of the
Register of Deeds of Cebu City issue a new duplicate certificate of title in
the name of Luisa, considering that the owners duplicate was still intact
in the possession of the Oos.
The decree of the CA decision was as follows:
WHEREFORE, the appeal is DISMISSED for lack of merit. However, the
dispositive portion of the decision appealed from is CORRECTED as
follows:
(1) Within five (5) days from finality of the decision, defendantsappellants are directed to present the owner's duplicate copy of
OCT No. RO-9969 (O-20449) to the Register of Deeds who shall
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Prof. Avena
Page 51 of 99
thereupon register the "Confirmation of Sale" of Lot No. 943,

Balamban Cadastre, Cebu, executed on April 23, 1961 by Antonio
Oo in favor of Luisa Narvios-Lim, and issue a new transfer
certificate of title to and in the name of the latter upon
cancellation of the outstanding original and owner's duplicate
certificate of title.
3. Whether or not there was a deed of sale executed by Spouses

Oo in favor of Luisa and whether or not said deed was lost
during World War II;
(2) In the event defendants-appellants neglect or refuse to

present the owner's copy of the title to the Register of Deeds as
herein directed, the said title, by force of this decision, shall be
deemed annulled, and the Register of Deeds shall make a
memorandum of such fact in the record and in the new transfer
certificate of title to be issued to Luisa Narvios-Lim.
5. Whether or not the signature purportedly of Antonio in

that confirmation of sale was genuine.
(3) Defendants-appellants shall pay the costs.
4. Whether or not the confirmation of sale executed by Antonio

in favor of Luisa existed; and
Ruling of the Court

The petition has no merit.
A.
SO ORDERED.10
Action for cancellation of title is not an attack on the title
The CA denied the Oos motion for reconsideration11 on June 17, 2002.12
The petitioners contend that this action for quieting of title should be
disallowed because it constituted a collateral attack on OCT No. RO9969-(O-20449), citing Section 48 of Presidential Decree No. 1529, viz:
Hence, this appeal.

Issues
The petitioners raise the following issues:
1. Whether or not the validity of the OCT could be collaterally
attacked through an ordinary civil action to quiet title;
2. Whether or not the ownership over registered land could be
lost by prescription, laches, or adverse possession;
Section 48. Certificate not subject to collateral attack. A certificate of

title shall not be subject to collateral attack. It cannot be altered,
modified, or cancelled except in a direct proceeding in accordance with
law.
The petitioners contention is not well taken.
An action or proceeding is deemed an attack on a title when its objective
is to nullify the title, thereby challenging the judgment pursuant to which
the title was decreed.13 The attack is direct when the objective is to
annul or set aside such judgment, or enjoin its enforcement. On the other
hand, the attack is indirect or collateral when, in an action to obtain a
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Prof. Avena
different relief, an attack on the judgment is nevertheless made as an

incident thereof.14
Quieting of title is a common law remedy for the removal of any cloud,
doubt, or uncertainty affecting title to real property.15 Whenever there is
a cloud on title to real property or any interest in real property by
reason of any instrument, record, claim, encumbrance, or proceeding
that is apparently valid or effective, but is, in truth and in fact, invalid,
ineffective, voidable, or unenforceable, and may be prejudicial to said
title, an action may be brought to remove such cloud or to quiet the
title.16 In such action, the competent court is tasked to determine the
respective rights of the complainant and the other claimants, not only to
place things in their proper places, and to make the claimant, who has no
rights to said immovable, respect and not disturb the one so entitled, but
also for the benefit of both, so that whoever has the right will see every
cloud of doubt over the property dissipated, and he can thereafter
fearlessly introduce the improvements he may desire, as well as use, and
even abuse the property as he deems fit.17
Lims complaint pertinently alleged:
18. If indeed, the genuine original of the Owner's Duplicate of the
Reconstituted Original Certificate of Title No. RO-9699 (O-20449) for Lot
943, Balamban Cadastre xxx is in Defendant's (Oos) possession, then
VNL submits the following PROPOSITIONS:
xxx
18.2. Therefore, the Original of Owners Duplicate Certificate (which
Respondents [Defendants Oos] claim in their Opposition is in their
possession) must be surrendered to VNL upon order of this Court, after
the Court shall have determined VNL's mother's acquisition of the
attributes of ownership over said Lot 943, in this action, in accordance
with Section 107, P.D. 1529, Property Registration Decree xxx
Page 52 of 99
xxx
[t]hat OCT 20449 be cancelled and new title for Lot 943 be issued
directly in favor of LUISA NARVIOS, to complete her title to said Lot;18
The averments readily show that the action was neither a direct nor a
collateral attack on OCT No. RO-9969-(O-20449), for Lim was asserting
only that the existing title registered in the name of the petitioners
predecessors had become inoperative due to the conveyance in favor of
Lims mother, and resultantly should be cancelled. Lim did not thereby
assail the validity of OCT No. RO-9969-(O-20449), or challenge the
judgment by which the title of the lot involved had been decreed. In
other words, the action sought the removal of a cloud from Lims title,
and the confirmation of Lims ownership over the disputed property as
the successor-in-interest of Luisa.
B.
Prescription was not relevant
The petitioners assert that the lot, being titled in the name of their
predecessors-in-interest, could not be acquired by prescription or
adverse possession.
The assertion is unwarranted.
Prescription, in general, is a mode of acquiring or losing ownership and
other real rights through the lapse of time in the manner and under the
conditions laid down by law.19 However, prescription was not relevant
to the determination of the dispute herein, considering that Lim did not
base his right of ownership on an adverse possession over a certain
period. He insisted herein, instead, that title to the land had been
voluntarily transferred by the registered owners themselves to Luisa, his
predecessor-in-interest.
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Prof. Avena
Lim showed that his mother had derived a just title to the property by
virtue of sale; that from the time Luisa had acquired the property in
1937, she had taken over its possession in the concept of an owner, and
had performed her obligation by paying real property taxes on the
property, as evidenced by tax declarations issued in her name;20 and that
in view of the delivery of the property, coupled with Luisas actual
occupation of it, all that remained to be done was the issuance of a new
transfer certificate of title in her name.
C.
Forgery, being a question of fact, could not be dealt with now
The petitioners submit that Lims evidence did not preponderantly show
that the ownership of the lot had been transferred to Luisa; and that
both the trial and the appellate courts disregarded their showing that
Antonios signature on the confirmation of sale was a forgery.
Clearly, the petitioners hereby seek a review of the evaluation and
appreciation of the evidence presented by the parties.
The Court cannot anymore review the evaluation and appreciation of the
evidence, because the Court is not a trier of facts.21 Although this rule
admits of certain exceptions, viz: (1) when the conclusion is a finding
grounded entirely on speculation, surmises, or conjecture; (2) when the
inference made is manifestly mistaken; (3) where there is a grave abuse
of discretion; (4) when the judgment is based on a misapprehension of
facts; (5) when the findings of fact are conflicting; (6) when the Court of
Appeals, in making its findings, went beyond the issues of the case, and
the findings are contrary to the admissions of both appellant and
appellee; (7) when the findings of the Court of Appeals are contrary to
those of the trial court; (8) when the findings of fact are conclusions
without specific evidence on which they are based; (9) when the facts set
forth in the petition as well in the petitioners main and reply briefs are
Page 53 of 99
not disputed by the respondents; and, (10) when the findings of fact of
the Court of Appeals are premised on the supposed absence of evidence
and are contradicted by the evidence on record,22 it does not appear now
that any of the exceptions is present herein. We thus apply the rule
without hesitation, and reject the appeal for that reason.
It is emphasized, too, that the CA upheld the conclusion arrived at by the
RTC that the signature of Antonio had not been simulated or forged. The
CA ruled that the testimony of the notary public who had notarized the
confirmation of sale to the effect that Antonio and Luisa had appeared
before him prevailed over that of the petitioners expert witness. The
concurrence of their conclusion on the genuineness of Antonios
signature now binds the Court.23
In civil cases, the party having the burden of proof must establish his
case by a preponderance of evidence. Preponderance of evidence is the
weight, credit, and value of the aggregate evidence on either side, and is
usually considered to be synonymous with the term greater weight of
the evidence or greater weight of the credible evidence. Preponderance
of evidence is a phrase that means, in the last analysis, probability of the
truth.24 It is evidence that is more convincing to the court as worthy of
belief than that which is offered in opposition thereto.
Lim successfully discharged his burden of proof as the plaintiff. He
established by preponderant evidence that he had a superior right and
title to the property. In contrast, the petitioners did not present any
proof of their better title other than their copy of the reconstituted
certificate of title. Such proof was not enough, because the registration of
a piece of land under the Torrens system did not create or vest title, such
registration not being a mode of acquiring ownership. The petitioners
need to be reminded that a certificate of title is merely an evidence of
ownership or title over the particular property described therein. Its
issuance in favor of a particular person does not foreclose the possibility
that the real property may be co-owned with persons not named in the
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Prof. Avena
certificate, or that it may be held in trust for another person by the

registered owner.25
Page 54 of 99
REYNATO S. PUNO
Chief Justice
WHEREFORE, the petition for review on certiorari is denied, and the

decision dated January 28, 2002 is affirmed.
The petitioners are ordered to pay the costs of suit.
Footnotes
SO ORDERED.
Original Records, pp. 175-182.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:
Id., p. 105.
Original Records, p.176.
Id., pp. 133-136.
Id., pp. 1-18.
Id., pp. 41-48.
Supra, Note at 1.
CA Rollo, pp. 71-84. Penned by Justice Oswaldo D. Agcaoili, with

Justice Jose L. Sabio, Jr. and Justice Sergio L. Pestao concurring.
REYNATO S. PUNO
Chief Justice
Chairperson
Associate Justice
TERESITA J. LEONARDO-DE
CASTRO
Associate Justice
MARTIN S. VILLARAMA, JR.

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the
conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts
Division.
10
CA Rollo, pp. 83-84.
11
Id., pp. 85-90.
12
Supra, Note at 3.
Law 126 Evidence
Prof. Avena
Sarmiento v. Court of Appeals, G.R. No. 152627, September 16,

2005, 470 SCRA 99, 107-108, citingMalilin, Jr. v. Castillo, G.R. No.
136803, June 16, 2000, 333 SCRA 628, 640.
13
14
Ibid.
Vitug, Compendium of Civil Law and Jurisprudence, 1993 Rev.

Ed., p. 295.
15
16
Article 476, Civil Code.
Baricuatro, Jr. v. Court of Appeals, G.R. No. 105902, February 9,

2000, 325 SCRA 137, 146-147.
17
18
Calicdan v. Cendaa, G.R. No. 155080, February 5, 2004, 422

SCRA 272, 279.
19
20
Twin Towers Condominium Corporation v. Court of Appeals, G.R.

No. 123552, February 27, 2003, 398 SCRA 203.
21
Mamsar Enterprises Agro-Industrial Corporation v. Varley

Trading, Inc., G.R. No. 142729, November 29, 2005, 476 SCRA
378, 382.
22
Naguiat v. Court of Appeals, G.R. No. 118375, October 3, 2003,

412 SCRA 591, 595-596.
23
Encinas v. National Bookstore, Inc., G.R. No. 162704, November

19, 2004, 443 SCRA 293.
24
Page 55 of 99
Heirs of Clement Ermac v. Heirs of Vicente Ermac, G.R. No.

149679, May 30, 2003, 403 SCRA 291, 298.
25
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SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 156310
July 31, 2008
XERXES A. ABADIANO, Petitioner,

vs.
SPOUSES JESUS and LOLITA MARTIR, Respondents.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of
the Revised Rules of Civil Procedure assailing the Decision1 of the Court
of Appeals (CA) dated March 14, 2002 and its Resolution2 dated
November 21, 2002 in CA-G.R. CV No. 51679. The CA affirmed the
Decision of the Regional Trial Court (RTC) of Kabankalan, Negros
Occidental3 declaring respondents as the owners of the property in
question.
The case stemmed from an action for quieting of title and/or recovery of
possession4 of a parcel of land filed by herein respondents against
Roberto Abadiano, Faustino Montao, and Quirico Mandaguit. Petitioner
Xerxes A. Abadiano intervened in that case.
Lot No. 1318 of the Kabankalan Cadastre consists of 34,281 square
meters covered by Original Certificate of Title (OCT) No. 20461 issued
on November 19, 1923 in the name of the spouses Inocentes Baares
and Feliciana Villanueva. Before the issuance of OCT No. 20461,
however, Inocentes and the heirs of Feliciana Villanueva (who had
Page 56 of 99
predeceased her husband) executed an Agreement of Partition dated

June 1, 1922 over Lot No. 1318. The lot was partitioned and distributed
as follows: (1) 14,976 sq m denominated as Lot No. 1318-A, in favor of
Demetrio Baares; (2) 10,125 sq m denominated as Lot No. 1318-B, in
favor of Ramon and David Abadiano (grandchildren of Inocentes and
Feliciana); and (3) 10,180 sq m denominated as Lot No. 1318-C, in favor
of Amando Baares. The partition is embodied in a Deed of Partition
executed on June 1, 1922 and notarized the following day by Notary
Public Jose Peralta with notarial inscriptions "Reg. No. 64, Pag. 69, Libro
III."5
On September 30, 1939, David Abadiano, who was absent during the
execution of the Agreement of Partition, executed a Deed of
Confirmation acknowledging and ratifying the document of partition.6
OCT No. 20461 was administratively reconstituted on February 15, 1962
and in lieu thereof OCT No. RO-8211 (20461) was issued over Lot No.
1318, still in the name of Inocentes Baares and Felicidad Villanueva.
Annotated at the back of the reconstituted title were the Agreement of
Partition and the Deed of Confirmation.7
On June 14, 1957 Demetrio Baares sold his share of the lot to his son,
Leopoldo. The same was annotated at the back of OCT No. RO-8211
(20461).8
Subsequently, on February 21, 1962, Leopoldo Baares filed before the
Court of First Instance (CFI) of Negros Occidental an ex-parte petition
praying for: first, the confirmation of the Agreement of Partition, the
Conformity executed by David Abadiano, and the Deed of Sale between
him and his father; and second, the cancellation of OCT No. RO-8211
(20461) and, in lieu thereof, the issuance of a new certificate of title over
the property. In an Order dated February 22, 1962, the court ordered the
cancellation of OCT No. RO-8211 (20461) and the issuance of a new
certificate of title in the names of Dr. Leopoldo Baares, Amando
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Page 57 of 99
Baares, and Ramon and David Abadiano. Pursuant thereto, Transfer

Certificate of Title (TCT) No. T-31862 was issued by the Register of
Deeds for Negros Occidental.9
the defendants also entered the property and harvested the sugarcane
on Lot No. 1318-B,17 which by then had been acquired by Lolita B. Martir
from her adoptive father, Amando Baares.18
Petitioner insists that this is still the valid and subsisting title over Lot
No. 1318 and that no sale of the portion pertaining to Ramon and David
Abadiano ever took place.10
Thus, in April 1982, herein respondent-spouses filed the Action to Quiet

Title and/or Recovery of Possession with Damages before the then CFI of
Negros Occidental.
On the other hand, respondent spouses alleged that, prior to the

issuance of TCT No. T-31862, Ramon Abadiano, for himself and on behalf
of David Abadiano, had already sold their rights and interests over Lot
No. 1318-C11 to Victor Garde. The sale was allegedly evidenced by a
document of sale (Compra Y Venta) dated June 3, 1922 and
acknowledged before Notary Public Jose Peralta and bearing notarial
inscription "Doc. No. 64, Pag. No. 60, Book No. III, series of 1922." The
sale was allegedly affirmed by David Abadiano in a document dated
September 30, 1939.12
In their Answer with Counterclaim,19 defendants denied that the subject

property was ever sold by Ramon and David Abadiano, and that,
consequently, defendant Roberto Abadiano had inherited the same from
Ramon. They also alleged, by way of Special and Affirmative Defenses,
that the subject land still belonged to the estate of Ramon and David
Abadiano and was never alienated. They alleged further that the act of
spouses Martir in planting sugarcane on the land was without Robertos
consent; that Roberto had demanded that the spouses Martir pay him
reasonable rental for the land but that they had persistently refused to
do so; and that sometime in March 1981, Roberto and the spouses Martir
came to an agreement whereby the defendant continued to cultivate the
remaining stalks of sugarcane left by plaintiffs and that until the harvest
of said sugarcane, plaintiffs never posed any objection thereto.
They further alleged that from the time of the sale, Victor Garde and his
heirs were in continuous, public, peaceful, and uninterrupted possession
and occupation in the concept of an owner of Lot No. 1318-C.13 On
December 29, 1961, the heirs of Victor Garde sold their rights and
interests over Lot No. 1318-C14 to Jose Garde, who immediately took
possession thereof. Jose Garde continuously planted sugarcane on the
land until he sold the property to Lolita Martir in 1979.15
After acquiring the property, respondent spouses continued to plant
sugarcane on the land. Sometime in March 1982, after respondent Jesus
Martir harvested the sugarcane he had planted on Lot No. 1318-C,
defendant below Roberto Abadiano (son of Ramon) allegedly entered
the property and cultivated the remaining stalks of sugarcane and
refused to vacate despite demands to do so. The following year,
defendants Roberto Abadiano, Faustino Montao, and Quirico
Mandaguit again harvested the sugarcane on Lot No. 1318-C.16 Further,
Xerxes Abadiano intervened in the proceedings before the trial court

alleging likewise that his predecessor Ramon Abadiano never sold their
share of the property to Victor Garde.20
After trial, the court issued a Decision21 dated June 23, 1995, ruling in
favor of the spouses Martir, thus:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and
against the defendants declaring plaintiffs spouses Jesus and Lolita
Martir as the true and legitimate owners of portions of Lot No. 1318
Kabankalan Cadastre denominated as Lots 1318-B and 1318-C and
ordering:
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(1) That the defendants Roberto Abadiano and the intervenor

Xerxes Abadiano shall surrender Transfer Certificate of Title No.
T-31862 to the Registrar of Deeds of Negros Occidental who is
directed to partially cancel said title and issue new Certificate of
Title corresponding to Lots 1318-B and 1318-C in the names of
the spouses Jesus and Lolita Martir;
(2) That the defendants shall jointly and severally pay to the
plaintiffs the amount of Twenty Thousand (P20,000.00) Pesos
representing the value of the sugarcanes of plaintiffs which
defendants harvested and milled with SONEDCO and;
(3) To pay the costs of this suit.
SO ORDERED.22
The trial court rejected therein defendants contention that the Compra
Y Venta was null and void because the co-owner, David Abadiano, did
not sign the same. It held that the Supreme Court has ruled to the effect
that the sale by a co-owner of the entire property without the consent of
the other co-owners was not null and void but that only the rights of the
co-owner-seller are transferred, making the buyer a co-owner. The trial
court also held that although the Compra Y Venta was not annotated
either on the OCT or on the reconstituted OCT, the validity of the sale
was not vitiated. The registration or annotation is required only to make
the sale valid as to third persons. Thus, the trial court concluded that the
Compra Y Venta was valid between the parties, Ramon Abadiano and
Victor Garde.
The trial court also brushed aside the defendants contention that the
Compra Y Venta contained the same notarial inscription as the Deed of
Partition. It said that assuming this to be true, this may be considered an
error which did not nullify the Compra Y Venta; at most, the document
would be non-registrable but still valid.
Page 58 of 99
On the contention that the alleged confirmation executed by David

Abadiano was for the Deed of Partition and not for the Compra Y Venta,
the trial court agreed. It, however, interpreted the same to mean that
David Abadiano must not have authorized his brother to sell his share in
Lot No. 1318-C. The effect was that David Abadiano continued to be one
of the registered owners of the property and his heirs stepped into his
shoes upon his death.
However, the trial court found that the plaintiffs (respondents) claim
that they and their predecessors-in-interest have been in possession of
the property for more than sixty (60) years was duly established. In
contrast, the court found that defendants and intervenor, and their
deceased parents, had not been in possession of their share in the
property. It held that the defendants and intervenor were guilty of laches
for failing to avail of the many opportunities for them to bring an action
to establish their right over Lot No. 1318-C.
Defendants appealed to the CA. However, the same was summarily
dismissed in a Resolution dated February 11, 1997 due to defendants
failure to pay the required docket fee within the period set. Nonetheless,
the records were retained for the appeal of Xerxes Abadiano, intervenor
in the trial court.
On March 14, 2002, the CA rendered a Decision affirming the Decision of
the RTC in toto.23
Xerxes Abadiano now comes before this Court raising the following
arguments:
A
THE HONORABLE COURT OF APPEALS ERRED, BASED ON ITS
MISAPPREHENSION AND/OR OMISSION OF THE FACTS, IN
DISREGARDING THE PRIMORDIAL ISSUE OF WHETHER OR NOT
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THE DEED OF SALE ("COMPRA Y VENTA") IS A SPURIOUS

DOCUMENT
Page 59 of 99
respondent; and (10) when the findings of fact are premised on the
supposed absence of evidence and contradicted by the evidence on
record.26
B
THE HONORABLE COURT OF APPEALS ERRED IN FINDING
PETITIONER GUILTY OF LACHES OVER REGISTERED LAND24
The Petition is impressed with merit. We believe the trial court and the
CA erred in ruling for the respondents. Accordingly, we reverse the
assailed Decision and Resolution.
It is well settled that the findings of fact of the trial court, especially
when affirmed by the CA, are accorded the highest degree of respect, and
generally will not be disturbed on appeal. Such findings are binding and
conclusive on the Court. Further, it is not the Courts function under Rule
45 of the 1997 Revised Rules of Civil Procedure to review, examine and
evaluate or weigh the probative value of the evidence presented. The
jurisdiction of the Court in a petition for review under Rule 45 is limited
to reviewing only errors of law. Unless the case falls under the
recognized exceptions, the rule shall not be disturbed.25
However, this Court has consistently recognized the following
exceptions: (1) when the findings are grounded entirely on speculation,
surmises, or conjectures; (2) when the inference made is manifestly
mistaken, absurd, or impossible; (3) when there is grave abuse of
discretion; (4) when the judgment is based on a misapprehension of
facts; (5) when the findings of fact are conflicting; (6) when in making its
findings, the CA went beyond the issues of the case, or its findings are
contrary to the admissions of both the appellant and the appellee; (7)
when the findings are contrary to those of the trial court; (8) when the
findings are conclusions without citation of specific evidence on which
they are based; (9) when the facts set forth in the petition as well as in
the petitioners main and reply briefs are not disputed by the
In the present case, we find that the trial court based its judgment on a
misapprehension of facts, as well as on the supposed absence of
evidence which is contradicted by the records.
In appreciating the alleged Compra Y Venta presented by respondents,
the trial court concluded that "[t]he parties have no quarrel on the
existence of a Deed of Sale of a portion of Lot No. 1318 executed by
Ramon Abadiano for himself and as representative of David Abadiano,
dated June 3, [1922] in favor of Victor Garde."27
The trial court erred in its conclusion.
Borne very clearly by the records is the defendants repudiation of the
existence of the sale in their Answer with Counterclaim. They stated:
2. That defendants admit plaintiffs allegation in paragraph 4 that
there has been no particular designation of lot number (sic) for
each of the co-owner (sic) of Lot No. 1318 but specifically deny
under oath the other allegations thereof the truth being that the
property referred to here as Lot No. 1318 remains undivided to
this day that the owners thereof as shown by the TCT No. 31862
co-own the same pro-indiviso;
3. That defendants have no knowledge sufficient to form a belief
as to the truth of the allegations in paragraph 528 and therefore
specifically deny the same under oath the truth being that
Ramon Abadiano and David Abadiano had not sold the land at
bar to anyone and that consequently, defendant Roberto
Abadiano had inherited the same from the former; x x
x.29 (emphasis supplied).
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Prof. Avena
Page 60 of 99
Likewise, petitioner specifically denied the allegations in paragraph 5 of

the Complaint. He alleged that the lot "had never been sold or alienated
and the same still remains intact as the property of the Intervenor and
his co-owners by operation of law."30
We are cognizant, however, that it is now too late in the day to remand
the case to the trial court for the determination of the purported Compra
Y Ventas authenticity and due execution. Thus, we will resolve this very
issue here and now in order to put an end to this protracted litigation.
This was testified to by Roberto Abadiano during the trial, thus:
There is no denying that TCT No. 31862 is still the subsisting title over
the parcel of land in dispute. It is also a fact that the purported Compra Y
Venta was not annotated on TCT No. 31862 until April 1982, shortly
before the complaint was commenced, even though the deed was
allegedly executed in 1922.
Q: During the lifetime of your father, do you know if your father has ever
sold to any party his share on Lot No. 1318?
A: He has not sold his share.31
These statements were enough to impugn the due execution of the
document. While it is true that this Court had previously ruled that mere
denials would not have sufficed to impeach the document, in this case,
there was an effective specific denial as contemplated by law in
accordance with our ruling that -
Considering that the action is one for quieting of title and respondents
anchored their claim to the property on the disputed Compra Y Venta,
we find it necessary to repeat that it was incumbent upon the trial court
to have resolved first the issue of the documents due execution and
authenticity, before determining its validity.
Rule 130, Section 3 of the Revised Rules of Court reads:
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.32
It was error then for the RTC to have brushed aside this issue and then
make so sweeping a conclusion in the face of such opposition. In light of
this challenge to the very existence of the Compra Y Venta, the trial court
should have first resolved the issue of the documents authenticity and
due execution before deciding on its validity. Unfortunately, the CA did
not even discuss this issue.
Original document must be produced; exceptions. When the subject of

inquiry is the contents of a document, no evidence shall be admissible
other than the original document itself, except in the following cases:
(a) When the original has been lost or destroyed, or cannot be
produced in court without bad faith on the part of the offeror;
(b) When the original is in the custody or under the control of
the party against whom the evidence is offered, and the latter
fails to produce it after reasonable notice;
(c) When the original consists of numerous accounts or other
documents which cannot be examined in court without great loss
of time and the fact sought to be established from them is only
the general result of the whole;
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Prof. Avena
(d) When the original is a public record in the custody of a public

officer or is recorded in a public office.
Respondents attached only a photocopy of the Compra Y Venta to their
complaint. According to respondent Lolita Martir, the original of said
document was in the office of the Register of Deeds. They allegedly tried
to obtain a copy from that office but their request was refused. No other
evidence but these bare assertions, however, was presented to prove
that the original is indeed in the custody of the Register of Deeds or that
respondents due and diligent search for the same was unsuccessful.
The Rule states that when the original document is unavailable, has been
lost or destroyed, or cannot be produced in court, the offeror, upon proof
of its execution or existence and the cause of its unavailability without
bad faith on his part, may prove its contents by a copy, or by a recital of
its contents in some authentic document, or by the testimony of
witnesses in the order stated.33
In the case at bar, respondents failed to establish that the offer in
evidence of the document was made in accordance with any of the
exceptions allowed under the abovequoted rule, and yet, the trial court
accepted the document as genuine and proceeded to determine its
validity based on such assumption.
The trial court likewise brushed aside the apparent defect that the
document presented contained the same notarial inscription as the
Agreement on Partition. Indeed, the Deed of Partition and the Compra Y
Venta, though executed on different days, were notarized on the same
day, and both documents contained the signatures of the same witnesses
and the same notarial inscription.
This notwithstanding, the court concluded, "Assuming this to be true,
same could be considered an error which did not nullify, (sic) the Deed
Page 61 of 99
of Sale or Compra Y Venta. At most, the document would be a nonregistrable, but valid document."34
We stress that a notarial document is evidence of the facts in the clear
unequivocal manner therein expressed and has in its favor the
presumption of regularity.35
In this case, while it is true that the error in the notarial inscription
would not have invalidated the sale if indeed it took place the same
error would have meant that the document cannot be treated as a
notarial document and thus, not entitled to the presumption of
regularity. The document would be taken out of the realm of public
documents whose genuineness and due execution need not be proved.36
Accordingly, respondents not having proven the due execution and
genuineness of the purported Compra Y Venta, the weight of evidence
preponderates in favor of petitioner.
Next, we determine if petitioner is guilty of laches. On this issue, we rule
in the negative.
Under the Property Registration Decree,37 no title to registered land in
derogation of the title of the registered owner shall be acquired by
prescription or adverse possession.38 Indefeasibility and
imprescriptibility are the cornerstones of land registration proceedings.
Barring any mistake or use of fraud in the procurement of the title,
owners may rest secure on their ownership and possession once their
title is registered under the protective mantle of the Torrens system.39
Nonetheless, even if a Torrens title is indefeasible and
imprescriptible,40 the registered landowner may lose his right to recover
the possession of his registered property by reason of laches.41
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Prof. Avena
Laches has been defined as neglect or omission to assert a right, taken in

conjunction with lapse of time and other circumstances causing
prejudice to an adverse party, as will operate as a bar in equity. It is a
delay in the assertion of a right which works disadvantage to another
because of the inequity founded on some change in the condition or
relations of the property or parties. It is based on public policy which, for
the peace of society, ordains that relief will be denied to a stale demand
which otherwise could be a valid claim.42
The four basic elements of laches are: (1) conduct on the part of the
defendant, or of one under whom he claims, giving rise to the situation of
which complaint is made and for which the complaint seeks a remedy;
(2) delay in asserting the complainant's rights, the complainant having
had knowledge or notice of the defendants conduct and having been
afforded an opportunity to institute suit; (3) lack of knowledge or notice
on the part of the defendant that the complainant would assert the right
on which he bases his suit; and (4) injury or prejudice to the defendant
in the event relief is accorded to the complainant or the suit is not held
to be barred.43
The reason for the rule is not simply the lapse of time during which the
neglect to enforce the right has existed, but the changes of condition
which may have arisen during the period in which there has been
neglect. In other words, where a court finds that the position of the
parties will change, that equitable relief cannot be afforded without
doing injustice, or that the intervening rights of third persons may be
destroyed or seriously impaired, it will not exert its equitable powers in
order to save one from the consequences of his own neglect.44
Though laches applies even to imprescriptible actions, its elements must
be proved positively. Laches is evidentiary in nature and cannot be
established by mere allegations in the pleadings.45
Page 62 of 99
Based on the foregoing, we hold that petitioner is not guilty of laches.

The evidence on record does not support such finding.
Petitioner had reasonable ground to believe that the property, being still
in the name of his predecessor in interest, continued to be theirs,
especially considering that the annotation of the purported sale was
done only in 1982. According to petitioner, his father had told him that
his (the fathers) inheritance was in the possession of their uncle,
Amando Baares who knew likewise that the property was theirs.
Thus, Roberto Abadiano testified:
Q: Before Amando Baares died, did you know that your father is a part
owner of Lot No. 1318?
A: Yes, Sir.
Q: And did you not complain to Amando Baares that your father is a
pert owner of that lot?
A: No, Sir. We did not complain because he was our grandfather and
when he dies, the property will go back to us.46
And herein petitioner testified:
Atty. Garaygay
Q: Before the war who was occupying this lot which you claimed
belonging (sic) to your father?
A: The uncle of my father, Amando Baares, Sir.
Q: As a matter of fact, before and after the war and during the lifetime of
Amando Baares, he was the one in possession of Lot No. 1318?
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Prof. Avena
A: Yes, sir.
Q: What was the condition of the lot under the possession of the lot
under the possession of Amando Baares was it under lease?
A: As far as I can remember, my father told me that his inheritance was
with Amando Baares, his uncle.47
Page 63 of 99
Q: Why did it take you that long before you initiated the move to claim
the inheritance?
A: Considering that relatives were involved and the fact we understand
that our late parents revered our uncle so, we cautiously tried to take
action shortly after his death, so as not to antagonize our relatives.
Q: What did you do in order to claim your inheritance?
From the testimonies of petitioner and the defendants during trial, it

would appear that they were unaware of any of respondents actions in
relation to the property until the death of their grandfather, Amando
Baares. When they did find out that respondents were occupying the
land, they immediately took action to occupy what they believed was
still rightfully theirs.
A: Now, after learning that it was being farmed by Lolita Martir, I advised
my brothers here in Kabankalan to go to Bacolod City to seek the
intercession of the Philippine Constabulary Commander in order to
thresh out the matter in a way that there will be no hostility or adverse
reaction.
On this point, petitioner testified, thus:
Q: What other reactions did you take, if any?
Q: When did you initiate the move to claim Lot No. 1318-B as your
inheritance from your late father?
A: Well, I told my brother that they have a confrontation in the Office of

the PACLAP known as the Presidential Action Commission on Land
Problems.
A: It was shortly after the death of Amando Baares.

Q: Who were these, who initiated the move to claim Lot No. 1318-B?
A: I advised my brothers here in Kabankalan to take action to possess
the land which was then occupied before by our (sic) great uncle,
Amando Baares.
Q: When was that, in what year, because we do not know when did your
uncle (sic) die?
A: It was after the death of Amando Baares sometime in 1973 or 1974.
Q: Besides that confrontation at the PACLAP, what other action did you
personally take as an heir of Lot No. 1318-B?
A: After that confrontation, I advised my brothers to occupy the land in
question to farm it because it belongs to us.
Q: With respect to the Transfer Certificate of Title, what action, if any,
did you undertake?
A: Well, we drew out a Declaration of Heirship and Adjudication and
after it was approved by the Court, it was annotated at the back of the
Transfer Certificate of Title No. T-31862 and we were given a co-owners
copy of the said title by the Register of Deeds.
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Prof. Avena
xxxx
Page 64 of 99
A: I made a verification in the Office of the Register of Deeds, and when I

went to the said lot, it was vacant.
Q: Mr. Witness, when did you and your co-owners executed (sic) this
Declaration of Heirship and Adjudication over Lot 1318-B?
Q: When was that?
A: That was on July 17, 1976.
A: In 1976-1977, and I have it planted in 1978.49
Q: Was that before or after the plaintiffs have filed this present case?
That petitioner and his co-heirs waited until the death of Amando
Baares to try and occupy the land is understandable. They had to be
careful about the actions they took, lest they sow dissent within the
family. Furthermore, they knew that their parents revered Amando.50
A: That was almost 6 or 7 years before this present case was filed.48
On the other hand, Roberto Abadiano testified:
Atty. Garaygay
Q: Now, according to you, your father is the co-owner of Lot No. 1318.
Prior to the death of your father, who was in possession of Lot No. 1318?
Witness
A: What I know is it was Amando Baares.
Q: You mean to say that when your father was still alive, it was Amando
Baares who was in possession of Lot No. 1318?
A: Yes, sir.
Q: And until when did you know that Amando Baares has been in
possession of Lot No. 1318?
A: Up to 1976 when he died.
Q: After his death in 1976, who was in possession of the said lot?
The Court has recognized that this reaction cannot be characterized as

such delay as would amount to laches, thus:
in determining whether a delay in seeking to enforce a right constitutes
laches, the existence of a confidential relationship between the parties is
an important circumstance for consideration, a delay under such
circumstances not being so strictly regarded as where the parties are
strangers to each other. The doctrine of laches is not strictly applied
between near relatives, and the fact that parties are connected by ties of
blood or marriage tends to excuse an otherwise unreasonable delay.51
In addition, several other factors militate against the finding of laches on
the part of the petitioner.
When the Original Certificate of Title was reconstituted on February 15,
1962, no annotation therein was made of the Compra Y Venta or of the
Deed of Sale between Ramon Abadiano and Victor Garde. Only the
Agreement of Partition, the Confirmation by David Abadiano, and the
sale from Demetrio to Leopoldo Baares were annotated
therein.52 Neither does the Deed of Sale of Demetrios share in favor of
Leopoldo, executed in 1957, mention that the property belonged to
anyone other than the parties to the Deed of Partition.53
Law 126 Evidence
Prof. Avena
Likewise, Transfer Certificate of Title No. T-31862, which was issued in

1962 pursuant to an Order of the Kabankalan CFI, was issued in the
names of Leopoldo Baares, Amando Baares, and Ramon and David
Abadiano. Even at the time of the issuance of said TCT, there was no
annotation of the alleged sale to Victor Garde, which according to
respondents took place in 1922.
If respondents contention were true, the TCT should not have been
issued in April 1962 in the name of Ramon and David Abadiano, but in
the name of Victor Garde or Jose Garde who by then had supposedly
acquired the property by virtue of the Declaration of Heirship and Deed
of Sale executed on December 29, 1961.54 As it is, neither respondents
nor any of their predecessors in interest participated in any of the
proceedings for the issuance of the OCT, the reconstituted OCT, or the
TCT. The petitioners testimony on the matter is revealing:
Q: Based on your investigation, did you find records of the proceedings
of the reconstitution of title of Lot 1318 or any evidence as to the
participation of the plaintiffs in this Reconstitution Petition?
A: Based on the existing records, they did not participate.
Q: How about in the Reconstitution of Original Certificate of Title No.
(sic) did the plaintiffs participate therein?
Page 65 of 99
hand, several entries made in 1981 evince that petitioner and his coheirs took steps after Amandos death to assert their rights over the
property.56
In 1976, the heirs of David Abadiano executed a Special Power of
Attorney in favor of Roberto Abadiano giving the latter authority to act,
sue, and/or represent them in any suit or action for recovery of
possession or of whatever kind or nature.57 For their part, the heirs of
Ramon Abadiano executed a Declaration of Heirship and Adjudication
over the part of Lot No. 1318 pertaining to their predecessor.58
Ranged against these positive steps, respondents only have their bare
assertions to support their claim that they indeed had possession of the
land through their predecessors in interest, which are insufficient to
overcome the testimony that it was Amando Baares and not Victor
Garde who had possession of the property during the formers lifetime,
or that after Amandos death, the lot remained unoccupied.
In sum, we find that petitioner is not guilty of such neglect or inaction as
would bar his claim to the property in question. In contrast, it is most
telling that respondents, who are claiming to have been in possession of
the property by virtue of an alleged duly constituted sale for almost 60
years, have themselves failed within that long period to have the same
property transferred in their name or even only to have the sale
annotated on the title of the property.
A: They did not also.
A: No, sir.55
Finally, we come to the issue of damages. Petitioner prays that

respondents be made to pay actual damages of not less that P30,000.00
plus rentals on the property from the time of the latters occupation,
moral damages amounting to P100,000.00, and exemplary damages, as
well as attorneys fees.
Again, the TCT bears out the fact that the purported Compra Y Venta to
Victor Garde was annotated thereon only on April 23, 1982. On the other
The record shows that petitioner testified on the prevailing rate of

rentals on the subject property from the time of Amando Baares death
Q: How about in the issuance of the new Transfer Certificate of Title, did
the plaintiffs participate therein?
Law 126 Evidence
Prof. Avena
in 1976 until the time of the trial. According to petitioner, the rental rate
from 1976 until 1985 was P3,000.00 per hectare, while from 1985 until
the time of his testimony in 1994, the rental rate wasP5,000.00 per
hectare. We thus rule that the actual damages that may be awarded shall
be based only on these rates.59
Considering, however, that petitioners co-heirs (defendants Roberto
Abandiano, et al.) were able to enter the property and harvest the
sugarcane therein in 1981 and, thereafter, the land remained
unoccupied, the rent must be reckoned only from the time respondents
actually occupied the land until March 1981.1avvphi1
The claims for moral damages must be anchored on a definite showing
that the claiming party actually experienced emotional and mental
sufferings.60 In this case, we find that petitioners testimony that he
suffered from sleepless nights from worrying about this case and
considering the great distance he had to travel from his home in
Tacloban to see the case through are enough bases to award him moral
damages. With the award of moral damages, exemplary damages are
likewise in order.61
Attorneys fees are recoverable when exemplary damages are awarded,
or when the court deems it just and equitable. The grant of attorneys
fees depends on the circumstances of each case and lies within the
discretion of the court.62 Given the circumstances of this case, we grant
the prayer for attorneys fees.
WHEREFORE, the foregoing premises considered, the Petition is
GRANTED. The Decision and Resolution of the Court of Appeals in CAG.R. CV No. 51679 are reversed and set aside. A new one is entered:
(1) reversing the Decision of the Regional Trial Court of
Kabankalan, Negros Occidental in Civil Case No. 1331;
Page 66 of 99
(2) declaring the heirs of Ramon and David Abadiano as the

lawful owners of Lot No. 1318-B, a portion of Lot No. 1318
covered by Transfer Certificate of Title No. T-31862, Kabankalan
Cadastre, Negros Occidental; and
(3) ordering respondents to pay petitioner and his co-heirs
rentals at the rate of P3,000.00 per hectare per year, from the
time of actual occupation of the land in 1976 until March 1981,
moral damages in the amount of P100,00.00, exemplary damages
in the amount of P30,000.00, and attorneys fees in the amount
ofP10,000.00.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
MA. ALICIA AUSTRIAMARTINEZ
Associate Justice
MINITA V. CHICO-NAZARIO
Associate Justice
RUBEN T. REYES
Associate Justice
ATTESTATION
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Prof. Avena
I attest that the conclusions in the above Decision were reached in

Id. at 5.
Id. at 6.
Associate Justice
Records, p. 122.
Page 67 of 99
Order of the Court of First Instance of Negros Occidental, id. at

130-131.
9
CERTIFICATION
10
Chairperson's Attestation, I certify that the conclusions in the above
REYNATO S. PUNO
Chief Justice
Footnotes
Penned by Associate Justice Mercedes Gozo-Dadole, with
Associate Justices Salvador J. Valdez, Jr. and Juan Q. Enriquez, Jr.,
concurring; rollo, pp. 20-32.
1
Rollo, p. 6.
Respondents mistakenly identified the subject property as Lot

No. 1318-C when in fact they were referring to Lot No. 1318-B.
Respondents admitted the mistake in their Answer to
Intervenors Answer in Intervention with Counterclaim.
(Records, p. 139.)
11
12
Complaint, records, pp. 2-3.
13
Supra note 11.
14
Id.
15
Id. at 4.
16
Id.
Id. at 40.
17
Referring to Lot No. 1318-C.
Penned by Judge Rodolfo S. Layumas, rollo, pp. 41-60.
18
Records, pp. 4-5.
Civil Case No. 207 (1331).
19
Answer with Counterclaim, records, pp. 29-32.
Rollo, pp. 4-5.
20
Motion for Intervention, id. at 100-102.
Law 126 Evidence
Prof. Avena
21
Rollo, pp. 40-60.
29
Answer with Counterclaim, records, p. 29.
22
Id. at 59-60.
30
Answer in Intervention, id. at 115.
23
Id. at 32.
31
TSN, September 14, 1989, p. 8.
24
Id. at 10.
32
Bulos, Jr. v. Yasuma, G.R. No. 164159, July 17, 2007, 527 SCRA
727, 737. (Citations omitted).
25
Citibank, N.A. v. Sabeniano, G.R. No. 156132, October 12, 2006,

504 SCRA 378, 409, citing Sps. Sta. Maria v. Court of Appeals, 349
Phil. 275, 282-283 (1998).
26
27
Rollo, p. 48.
Paragraph 5 reads: "That prior to the issuance of TCT No. T31862, of Lot No. 1318, Ramon Abadiano for himself and in
behalf of David Abadiano had already sold and conveyed their
rights and interest in and over the said portion of lot (sic) No.
1318, herein referred to as Lot No. 1318-C, in favor of Victor
Garde as evidenced by a document of sale dated June 3, 1922,
which was duly acknowledged and ratified before Mr. Jose
Peralta, Notary Public, appearing as Doc. No. 64, Page No. 60,
Book No. III, series of 1922, of the latters Notarial Register, a
xerox copy of said deed of sale is hereto attached as Annex `B,
and made part hereof. This document of sale was later on
affirmed by David Abadiano, in a document dated September 30,
1939, and acknowledged on the same date before Mr. Jose
Peralta, Notary Public, appearing as Doc. No. 128, Page No. 100,
Libro XI, of the latters Notarial Register, a xerox copy of which is
hereto attached as Annex `C, and made part hereof." (Complaint,
records, pp. 2-3).
Page 68 of 99
The Consolidated Bank and Trust Company v. Del Monte Motor

Works, et al., G.R. No. 143338, July 29, 2005, 465 SCRA 117, 130,
citing Permanent Savings and Loan Bank v. Mariano Velarde, 439
SCRA 1 (2004).
33
Rule 130, Sec. 5.
34
Rollo, p. 52.
Bautista v. Court of Appeals, 479 Phil. 787, 795 (2004), citing

Fernandez v. Fernandez, 363 SCRA 811, 829 (2001).
35
28
See Tigno, et al. v. Spouses Aquino, et al., G.R. No. 129416,

November 25, 2004, 444 SCRA 61.
36
37
Section 47, Presidential Decree (PD) No. 1529.
38
Sec. 47, id.
Herce v. Municipality of Cabuyao, et al., G.R. No. 166645,

November 11, 2005, 474 SCRA 797, 807, citing Tichangco v.
Enriquez, 433 SCRA 324, 333-334 (2004).
39
Isabela Colleges, Inc. v. The Heirs of Tolentino-Rivera, 397 Phil.

955, 969 (2000), citing Reyes v. Court of Appeals, 258 SCRA 651
(1996); Dimayuga v. Court of Appeals, 129 SCRA 110 (1984).
40
Law 126 Evidence
Prof. Avena
Page 69 of 99
Id., citing Catholic Bishop of Balanga v. Court of Appeals, 264

SCRA 181 (1996); De la Calzada-Cierras v. Court of Appeals, 212
SCRA 390 (1992); Claverias v. Quingco, 207 SCRA 66 (1992);
Marcelino v. Court of Appeals. 210 SCRA 444 (1992); Republic v.
Court of Appeals, 204 SCRA 160 (1991); Tambot v. Court of
Appeals, 181 SCRA 202 (1990); Bergado v. Court of Appeals, 173
SCRA 497 (1989); Golloy v. Court of Appeals, 173 SCRA 26
(1989); Lola v. Court of Appeals, 145 SCRA 439 (1986); Miguel v.
Catalino, 26 SCRA 234 (1968); Mejia de Lucas v. Gamponia, 100
Phil. 277 (1956).
49
TSN, November 23, 1989, p. 4.
50
Rollo, p. 13.
52
Exhibit "1," folder of exhibits for intervenor, p. 2.
De Vera-Cruz, et al. v. Miguel, G.R. No. 144103, August 31,

2005, 468 SCRA 506, 518.
53
Exhibit "1-C-1," id. at 17.
54
Records, pp. 15-17.
55
TSN, July 14, 1994, p. 34.
41
42
Heirs of Dumaliang, et al. v. Serban, et al., G.R. No. 155133,

February 21, 2007, 516 SCRA 343, 352, citing Felix Gochan and
Sons Realty Corporation v. Heirs of Baba, G.R. No. 138945, August
19, 2003, 409 SCRA 306; see also Miguel v. Catalino 135 Phil. 229
(1968) and Claverias v. Quingco G.R. No. 77744, 6 March 1992,
207 SCRA 66; Go Chi Gun, et al. v. Co Cho, et al., 96 Phil. 622, 637
(1954), citing 19 Am. Jur., 343-344.
Pilapil, et al. v. Heirs of Briones, et al., G.R. No. 150175, March

10, 2006, 484 SCRA 308, 316-317, citing Gallardo v. Intermediate
Appellate Court, 155 SCRA 248 (1987); Sotto v. Teves, et al., 175
Phil 343, 371.
51
43
Vda. de Cabrera, et al. v. Court of Appeals, 335 Phil. 19, 34

(1997), citing Mejia de Lucas v. Gampona, 100 Phil. 277 (1956).
44
Department of Education v. Oate, G.R. No. 161758, June 8,

2007, 524 SCRA 200, 216, citing Felix Gochan and Sons Realty
Corporation v. Heirs of Baba, supra note 43.
45
46
TSN, November 23, 1989, p. 5.
47
Id. at 6.
48
TSN, July 14, 1994, pp. 40-43.
Exhibits "2," "2-A," "2-B," "2-C," "2-D," "2-E," and "2-F," folder
of exhibits for intervenor, p. 21.
56
57
Exhibit "2-B-1," folder of exhibits for intervenor, pp. 26-27.
58
Exhibit "2-C-1," id. at 28-29.
59
TSN, July 14, 1994, p. 46.
Trinidad v. Acapulco G.R. No. 147477, June 27, 2006, 493 SCRA
179, 193, citing Quezon City Government v. Dacara, 460 SCRA
243 (2005).
60
61
CIVIL CODE, Art. 2208.
Law 126 Evidence
Prof. Avena
Pilipinas Shell Petroleum Corporation v. John Bordman

Limited of Iloilo, Inc., G.R. No. 159831, October 14, 2005 473
SCRA 151, 175. (Citations omitted).
62
Page 70 of 99
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Prof. Avena

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 188637
December 15, 2010
ARNALDO G. GABUNAS, SR., Petitioner,

vs.
SCANMAR MARITIME SERVICES INC., MR. VICENTE BRILLANTES
AND IUM SHIP MANAGEMENT,Respondents.
DECISION
SERENO, J.:
Before us is a Petition for review on certiorari filed under Rule 45 of the
Revised Rules of Court. The Petition seeks to reverse the Decision1 dated
24 December 2008 of the Court of Appeals (CA) in C.A. G.R. SP No.
99242. The CA Decision affirmed the Decision2 dated 24 August 2006 of
the National Labor Relations Commission (NLRC) in CA G. R. No.
045232-05.
The following are the established facts of the case:
Petitioner Arnaldo G. Gabunas, Sr. was a seafarer registered with the
Philippine Overseas Employment Agency (POEA) under Seafarers
Registration Certificate No. 0263209-95 and also with the Maritime
Industry Authority (MARINA).3
On 22 December 2000, petitioner signed a contract with respondent
Scanmar Maritime Services, Inc. (Scanmar) to work as 2nd Assistant
Page 71 of 99
Engineer for its principal, IUM Ship Management, on board the ocean
vessel M/V Chaiten for nine months.4
Prior to boarding his assigned vessel, petitioner was subjected to a preemployment medical examination, on the basis of which he was declared
by the company-designated physician "fit to work."5 On 27 December
2000, petitioner left the Philippines to commence work on his assigned
vessel.6
Sometime in July 2001, petitioner experienced a throbbing pain in his
left leg while on board his vessel of assignment. He informed his officer
about it and requested medical attention, but was ignored.7
After his contract expired, petitioner disembarked from the vessel on 16
October 2001 and arrived in the Philippines on the following day.8 On 19
October 2001, he reported to the office of Scanmar to receive his final
wages and to inform respondent of his preferred dates for next
deployment.9 He also asked for a medical check-up, but his request was
ignored. Instead, respondent requested that he renew his license and
attend a three-day seminar to upgrade his International Maritime
Organization Certificate. On 19 September 2001, he underwent a preemployment medical examination for future deployment and was
declared "physically fit."10 Thereafter, he awaited his reemployment.
On 02 February 2002, petitioner felt pain and numbness in his left leg.
He sought medical attention at the Philippine Heart Center, where he
was diagnosed with "Critical Limb Ischemia." Petitioner sought medical
assistance from respondent Scanmar, but he was ignored.11
On 20 February 2002, petitioner underwent a femoro-popliteal bypass
surgery on his left leg. Due to the failure of the first operation, he was
required to undergo a "redo" of the femoro-popliteal bypass. Despite
undergoing these medical procedures, petitioners condition did not
improve. He finally underwent a below-knee amputation of his left leg.12
Law 126 Evidence
Prof. Avena
Due to the amputation of his leg, petitioner was prevented from

engaging in his line of work. He consulted Dr. Efren Vicaldo, an internistcardiologist at the Philippine Heart Center. Dr. Vicaldo opined that
petitioners disease incapacitated the latter from engaging in normal
work, and that it was "work-aggravated."13 Hence, petitioner demanded
sickness allowance and permanent disability benefits from respondent.
His demands were, however, ignored by respondent.14
On 10 June 2004, petitioner filed a Complaint with the National Labor
Relations Commission, docketed as Case No. (M) 04-06-01636-00. On 25
May 2005, the Labor Arbiter found for petitioner and rendered the
following monetary awards:
WHEREFORE, premises considered, judgment is hereby rendered
ordering respondents to pay complainant Arnaldo G. Gabunas his
Permanent Disability Benefit in the amount of EIGHTY THOUSAND US
DOLLARS (US $ 80,000.00), Sickness Allowance in the amount of
US$3,800.00 or its equivalent in local currency at the time of actual pa
yment plus ten (10%) percent of the total award as Attorneys Fees.15
Respondent Scanmar appealed the adverse Decision of the Labor Arbiter
at the NLRC. On 24 August 2006, the NLRC reversed the Labor Arbiters
Decision and dismissed petitioners Complaint as follows:
WHEREFORE, premises considered, the appealed Decision is hereby
ordered SET ASIDE and a new one entered declaring the DISMISSAL of
complainant-appellees complaint for lack of merit.16
Aggrieved by the NLRCs Decision, petitioner appealed to the Court of
Appeals raising the following issues:
1. Whether or not the Honorable Commission erred in holding
that the sickness of petitioner was not work-related and not
Page 72 of 99
acquired during the term of his contract contrary to the ruling of

the Labor Arbiter;
2. Whether or not the Honorable Commission erred in holding
that the petitioner is not entitled to disability benefits for failure
to comply with the mandatory reporting requirement;
3. Whether or not the Honorable Commission erred in giving
credence to the affidavit of Mr. Esta while disregarding the
assertion of petitioner;
4. Whether or not the Honorable Commission erred in ruling that
the belated filing of petitioners complaint weakens his claim for
disability benefit;
5. Whether or not the Honorable Commission erred in
considering the assessment of the company-designated
physician in the PEME of petitioner as physically fit;
6. Petitioner is entitled to permanent disability; and
7. Petitioner is entitled to attorneys fees.17
On 24 December 2008, the Court of Appeals, through its Twelfth
Division, rendered a Decision affirming the ruling of the NLRC. The
penultimate part of the Decision is worded as follows:
The claim that the complaint was filed based merely on surmises and
conjectures does not deserve belief. The clinical abstracts issued by the
attending physicians of petitioner Gabuans, Sr. showed that his sickness
was a reality, however, petitioners claim thereon has prescribed.
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Prof. Avena
WHEREFORE, in view of the foregoing, the petition is DISMISSED. The

decision of the NLRC in NLRC-NCR OFW Case No. (M) 04006-01636-00
(sic) is hereby AFFIRMED.
SO ORDERED.18
Petitioner moved for the reconsideration of the CAs Decision, but his
Motion was denied through a Resolution dated 22 June 2009.19 Hence,
this instant Petition for certiorari assailing the appellate courts
Decision.
Petitioner argues before this Court that he is entitled to claim permanent
disability and other benefits, because his illness was work-related and
his claim has not yet prescribed. In addition, he also prays for the award
of damages and attorneys fees as a consequence of his instituting the
suit to enforce his claims against respondents.
After a careful perusal of the records of the case, we rule to DENY the
Petition.
The validity of petitioners claim for permanent disability benefits
against respondents hinges on whether or not his illness was workrelated. The rest of his prayers likewise depend on the resolution of the
main issue mentioned.
We have no compelling reason to deviate from the factual findings of the
NLRC stating that petitioner has failed to establish that his illness was
work-related. Hence, he is not entitled to claim permanent disability
benefits. This Court has, time and again, held that the factual findings of
quasi-judicial agencies like the NLRC, when affirmed by the Court of
Appeals, are conclusive upon the parties and binding on this
Court.20 This dictum is consistent with the settled rule that under Rule
45 of the Rules of Court, only questions of law may be raised before this
Court.21
Page 73 of 99
In De Jesus v. National Labor Relations Commission,22 judicial review by

the Supreme Court does not extend to a re-evaluation of the sufficiency
of the evidence that served as the basis for the proper labor tribunals
determination. The doctrine that this Court is not a trier of facts is firm
and applies with greater force to labor cases.23
The NLRC dismissed the complaint after finding that petitioners claims
were not supported by substantial evidence. It noted that the records
showed petitioners failure to present credible evidence to prove that his
illness was work-related. In fact, the NLRC regarded as mere allegation,
his statement that "while busy doing his task, (he) felt a throbbing pain
on his left leg," because he failed to support it with credible evidence,
such as medical records and the daily logbook of the vessel.24 Its finding
was sustained by the Court of Appeals.
In affirming the findings of the NLRC, the appellate court found that the
clinical abstracts presented by petitioner to support his permanent
disability claims were taken only after his disembarkation from his
assigned vessel.25 The CA also noted that petitioner failed to present
evidence that he had notified the ship captain about his alleged medical
complaint while on board the vessel. Further, it found no proof, aside
from mere allegations in the Complaint of petitioner,26 that he had
notified respondent of any medical problem upon disembarkation.
Contrary to petitioners position, we do not find any error on the part of
the appellate court, which gave credence to the Affidavit of witness
Victorio Q. Esta, respondent Scanmars Manning Manager. The Affidavit
attests to the fact that respondent did not receive any complaint from
petitioner, either while on board the vessel or after disembarkation.27
We scoured the records of the proceedings on the level of the Labor
Arbiter and the NLRC and agree that petitioner could not substantiate
his claim that he had complained of pain in his left leg while on board the
vessel or upon his disembarkation. We also note that even the Labor
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Prof. Avena
Arbiters Decision on this matter is wanting in reference to any evidence

that would support findings in favor of petitioner. As between
petitioners bare allegation and the Affidavit of a witness to the contrary,
we give credence to the latter.
In Pan Pacific Industrial Sales Co., Inc. v. Court of Appeals, et al.,28 we
held that a notarized document carries the evidentiary weight conferred
upon it with respect to its due execution. It has in its favor the
presumption of regularity, which may only be rebutted by evidence so
clear, strong and convincing as to exclude all controversy as to the falsity
of the certificate. Absent such evidence, the presumption must be
upheld. The burden of proof to overcome the presumption of due
execution of a notarial document lies in the one contesting the same.
Petitioner failed to present convincing evidence to rebut the assertions
made by Mr. Esta on a crucial point. The CA stated that while it was
ready to construe in favor of labor in case of doubt, and while the
Affidavit of Mr. Esta could be considered self-serving, there was
absolutely no evidence to rebut this Affidavit; hence, the Affidavit must
be believed.
On another point, petitioner faults the ruling of the appellate court that
his illness is not work-related. Petitioner stresses that the law only
requires a probability of the connection between the risk of contracting
the illness and its aggravation due to the working conditions not
absolute certainty or direct causal relation to prove
compensability.29 However, while petitioner correctly cites the principle,
he must still adduce substantial evidence to prove that the principle can
be applied to his case.
In Spouses Ponciano Aya-ay, Sr. and Clemencia Aya-ay v. Arpaphil
Shipping Corp. and Magna Marina, Inc.,30 the issue resolved by the Court
was whether the petitioners therein were entitled to death benefits
provided under the POEA Standard Employment Contract.
Page 74 of 99
Parenthetically, it was crucial to determine whether the death of the

deceased was reasonably connected with his work, or whether the
working conditions increased the risk of contracting the disease that
resulted in the employees death. In resolving the issue, the Court made
this pronouncement:
Hence, it was incumbent on petitioners to present substantial evidence,
or such relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion, that the eye injury sustained by Aya-ay
during the term of his employment with respondents caused, or
increased the risk of, CVA.
Substantial evidence is more than a mere scintilla. The evidence must be
real and substantial, and not merely apparent; for the duty to prove
work-causation or work-aggravation imposed by law is real and not
merely apparent.
xxx
xxx
xxx
This Court finds that under the circumstances petitioners bare

allegations do not suffice to discharge the required quantum of proof of
compensability. Awards of compensation cannot rest on speculations or
presumptions. The beneficiaries must present evidence to prove a
positive proposition.31 (Emphasis supplied.)
In the instant case, it is apparent that petitioners allegations in his
supplications are bereft of any substantial proof that his illness was
contracted while working as a 2nd Assistant Engineer on board the
vessel, or that his illness was aggravated by his working conditions then.
At best, his allegations were mere conjectures. Paragraph 7 of his
Position Paper submitted to the Labor Arbiter states:
7. Sometime in July 2001, while busy doing his task, complainant felt a
throbbing pain on his left leg. Immediately, he decided to inform his
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Prof. Avena
officer what he experienced. He requested for a medical check up hoping

that he would be referred to a physician and be given the appropriate
medical attention but such was not the case. No medical attention was
extended and was left with no recourse so he continued to work until he
was repatriated and was disembarked on board on 16 October 2001 and
arrived in the Philippines on 17 October 2001. The date of his arrival is
reflected in his seamans book, the pertinent portion of which is hereto
attached as Annex "D".32
Attached to the above paragraph is a record of his date of arrival upon
disembarkation from his assigned vessel. This fact is admitted by the
parties and is undisputed. The allegation that he complained of pain and
numbness while on board the vessel in July 2001 remains a bare
allegation without any supporting evidence. This fact is reflected in the
Labor Arbiters overturned Decision, which summarily ruled that
petitioners sickness occurred during the term and validity of his
contract. There was a palpable lack of reference to any basis for that
ruling in the Labor Arbiters Decision.
The proceedings before the NLRC and the CA reveal that even on appeal,
petitioner failed to produce any evidence to substantiate his claim that
his illness was work-related. The medical abstracts he introduced to
support his case were all taken after his disembarkation from his vessel
of assignment. Unfortunately, the pieces of documentary evidence that
petitioner presented do not help in establishing that his illness was
work-related so as to sustain a finding entitling him to compensation
under his contract with respondents.
We agree with petitioners argument that to establish whether the
illness is work-related, probability not certainty is the
touchstone.33 However, the probability referred to must be founded on
facts and reason. Government Service Insurance System v. Emmanuel P.
Cuntapay34 is instructive as regards the burden resting on a claimants
Page 75 of 99
shoulder that of proving the causal link between a claimants work and
the ailment suffered:
The claimant must show, at least, by substantial evidence that the
development of the disease was brought about largely by the conditions
present in the nature of the job. What the law requires is a reasonable
work connection and not a direct causal relation. It is enough that the
hypothesis on which the workmens claim is based is probable.
Probability, not the ultimate degree of certainty, is the test of proof in
compensation proceedings. And probability must be reasonable; hence it
should, at least, be anchored on credible information. Moreover, a mere
possibility will not suffice; a claim will fail if there is only a possibility
that the employment caused the disease.(Emphasis and underscoring
supplied.)
Petitioner clearly failed to discharge the duty imposed upon him by law
to claim the benefits as prayed for in his Petition. Section 20 (B) of the
2000 POEA Standard Employment Contract provides:
B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
The liabilities of the employer when the seafarer suffers work-related
injury or illness during the term of his contract are as follows:
xxx
xxx
xxx
3. Upon sign-off from the vessel for medical treatment, the seafarer is
entitled to sickness allowance equivalent to his basic wage until he is
declared fit to work or the degree of permanent disability has been
assessed by the company-designated physician but in no case shall this
period exceed one hundred twenty (120) days.
For this purpose, the seafarer shall submit himself to a post-employment
medical examination by a company designated physician within three
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Prof. Avena
working days upon his return except when he is physically incapacitated

to do so, in which case, a written notice to the agency within the same
period is deemed as compliance. Failure of the seafarer to comply with
the mandatory reporting requirement shall result in his forfeiture of the
right to claim the above benefits.
If a doctor appointed by the seafarer disagrees with the assessment, a
third doctor may be agreed jointly between the Employer and the
seafarer. The third doctors decision shall be final and binding on both
parties. (Emphasis supplied.)
The wording of the section cited above clearly states that for an injury or
illness to be compensable under the POEA Standard Employment
Contract, it must be work-related. Petitioner has failed to convince this
Court that the illness he suffered can be reasonably linked to the
performance of his work as 2nd Assistant Engineer on board M/V
Chaiten or to prove that it was aggravated during his stint in the vessel.
We therefore find that the Court of Appeals correctly affirmed the
findings of the NLRC dismissing his appeal for lack of merit.
We now address the issue raised by petitioner whether the Court of
Appeals correctly ruled on the law governing the contract he executed
with respondents to determine the prescriptive period for his claim.
The CA dismissed petitioners appeal on the ground that his Complaint
was filed out of time.1avvphi1 It applied Section 30 of POEA Circular No.
055, Series of 1996, and ruled that the prescription period for filing
claims is one year from disembarkation. Hence, petitioner, having
disembarked from his assigned vessel on 17 October 2001 and having
filed his complaint on 10 June 2004, the Complaint was deemed to have
been filed out of time.35
Petitioner, on the other hand, contends that the law under which his
contract should be governed in relation to the prescription period for
Page 76 of 99
filing his action should be drawn from the terms of the 2000 POEA
Standard Employment Contract, which grants him three years from
disembarkation within which to file his action.
The Court of Appeals erred in applying POEA Circular No. 55, Series of
1996, to petitioners contract in relation to the prescription period
within which he should have filed his money claim. Section 30 of the
2000 POEA Standard Employment Contract, which took effect on 25 June
2000, provides for the prescriptive period for filing claims arising from
the said contract:
SECTION 30. PRESCRIPTION OF ACTION
All claims arising from this Contract shall be made within three (3) years
from the date the cause of action arises, otherwise the same shall be
barred.
Thus, when petitioner signed his contract with respondent on 22
December 2001, it was the 2000 POEA Standard Employment Contract
that was already in effect. Consequently, his action, which was filed on
10 June 2004, was filed within the three year prescription period under
the 2000 POEA Standard Employment Contract. Despite having filed his
action within the prescriptive period, his action must fail.
As regards the prayer for damages and attorneys fees, we deny it for
lack of legal basis.
WHEREFORE, the Petition is DENIED. The Decision (dated 24 December
2008) of the Court of Appeals in C.A. G.R. SP No. 99242 is hereby
AFFIRMED.
SO ORDERED.
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Page 77 of 99
MARIA LOURDES P. A. SERENO

Associate Justice
Footnotes
WE CONCUR:
Associate Justice
Chairperson
LUCAS P. BERSAMIN
Associate Justice
Additional member per Special Order No. 921 dated 13

December 2010.
1
Penned by Associate Justice Arcangelita M. RomillaLontok and concurred in by then Court of Appeals
Associate Justice Mariano C. del Castillo and Associate
Justice Romeo F. Barza.
MARTIN S. VILLARAMA, JR.

Associate Justice
JOSE CATRAL MENDOZA

Associate Justice
A T T E S T ATION
Penned by NLRC Second Division Presiding Commissioner Raul

T. Aquino and concurred in by Commissioners Victoriano R.
Calaycay and Angelita A. Gacutan.
2
Rollo, p. 6.
Id.

Associate Justice
Id. at 38.
Id. at 47.
Id. at 7.
Id. at 38.
Id. at 146.
CERTIFICATION
RENATO C. CORONA
Chief Justice
10
Id. at 175.
11
Id. at 38.
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Prof. Avena
Page 78 of 99
12
Id. at 180.
26
Id. at 66.
13
Id. at 177.
27
Supra.
14
Id. at 39.
28
G.R. No. 125283, 10 February 2006, 482 SCRA 164.
15
Id. at 135.
29
Rollo, p. 14.
16
Id. at 53.
30
G.R. No. 155359, 31 January 2006, 481 SCRA 282.
17
CA rollo, pp. 332-333.
31
Id.
18
CA rollo, pp. 392.
32
National Labor Relations Commission rollo, pp. 25-26.
Penned by Associate Justice Arcangelita M. Romilla-Lontok and

concurred in by then Court of Appeals Associate Justice Mariano
C. del Castillo and Associate Justice Romeo F. Barza.
33
Rollo, p. 14.
34
G.R. No. 168862, 30 April 2008, 553 SCRA 520.
Coastal Safeway Marine Services, Inc. v. Leonisa Delgado, G.R.

No. 168210, 17 June 2008, 555 SCRA 590.
35
Rollo, p. 69.
19
20
Danny Mame v. Court of Appeals, G.R. No. 167953, 03 April

2007, 520 SCRA 552.
21
22
G.R. No. 151158, 17 August 2007, 530 SCRA 489.
23PCL
Shipping Philippines, Inc. v. National Labor Relations

Commission, G.R. No. 153031, 14 December 2006, 511 SCRA 44
as cited in De Jesus v. National Labor Relations Commission,
supra.
24
Rollo, p. 50.
25
Id. at 64.
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SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 150318
November 22, 2010
PHILIPPINE TRUST COMPANY (also known as Philtrust

Bank), Petitioner,
vs.
HON. COURT OF APPEALS and FORFOM DEVELOPMENT
CORPORATION, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
This is a Petition for Certiorari assailing the Decision1 of the Court of
Appeals dated June 15, 2001 and the subsequent Resolution2 denying
reconsideration dated August 21, 2001.
The facts of the case, as determined by the Court of Appeals, are as
follows:
Plaintiff Forfom Development Corporation is engaged in agricultural
business and real estate development and owns several parcels of land
in Pampanga. It is the registered owner of two (2) parcels of land subject
of the present controversy, situated in Angeles City, Pampanga, under
Transfer Certificate of Title Nos. 10896 and 64884 consisting of
1,126,530 and 571,014 square meters, respectively. Sometime in 1989,
plaintiff received a letter from the Department of Agrarian Reform with
the names Ma. Teresa Limcauco and Ellenora Limcauco as addressees.
Upon verification with the DAR and the Register of Deeds made by
Page 79 of 99
plaintiffs Vice-President at that time, Mr. Jose Marie L. Ramos, plaintiff

discovered that the subject properties had already been transferred in
the names of said Ma. Teresa Limcauco and Ellenora Limcauco who were
never known to plaintiff or its employees. Plaintiffs Board of Directors
decided to seek the assistance of the National Bureau of Investigation
(NBI) to conduct an investigation on the matter. On November 23, 1989,
plaintiff caused the annotation of its adverse claim on TCT No. 75533 of
the Registry of Deeds of Angeles City.
The results of the NBI Investigation and plaintiffs own inquiry revealed
the following acts through which the subject parcels of land were
transferred in the names of Ma. Teresa Limcauco and Ellenora Vda. De
Limcauco, fictitious names which were used by defendant Honorata
Dizon in the questioned transactions:
(1) A "Deed of Absolute Sale" dated March 6, 1987 was executed
over the lot covered by TCT No. 64884 in favor of Ellenora Vda.
De Limcauco for the price of P500,000.00. A separate "Deed of
Absolute Sale" dated October 5, 1987 was likewise executed over
the property covered by TCT No. 10896 in favor of Ma. Teresa
Limcauco in consideration of P500,000.00. In both instruments,
the signature of the plaintiffs President, Felix H. Limcauco was
forged. Likewise, a certification to the effect that plaintiffs Board
of Directors had duly approved the sale contained the forged
signature of plaintffs President, Felix H. Limcauco.
(2) On July 7, 1987, a petition for issuance of owners duplicate
copy was filed with the Regional Trial Court of Angeles City,
Branch 57 by Ellenora Limcauco who allegedly lost said owners
duplicate copy of TCT No. 64884, which was docketed as Cad.
Case No. A-124-160. On January 10, 1989, a separate petition for
the issuance of a new owners duplicate copy was filed with the
same court by counsel for Ma. Teresa Limcauco who allegedly
lost the owners duplicate copy of TCT No. 10896, which was
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Prof. Avena
docketed as Cad. Case No. A-124-280. After due hearing, the

court in Cad. Case No. A-124-280 granted the petition in an
Order dated February 1, 1989 which directed the Register of
Deeds to issue another owners duplicate copy of TCT No. 10896
in place of the lost one.
(3) As a consequence of the courts order in Cad. Case No. A-124280, TCT No. 10896 was cancelled and TCT No. 82760/T-414
was issued in the name of Ma. Teresa Limcauco who had the
property covered thereby subdivided into different lots for
which TCT Nos. 85585, 85587, 85589 and 85591 were issued in
the name of said Ma. Teresa Limcauco. As to TCT No. 64884, this
was also cancelled by the Register of Deeds of Angeles City,
Honesto G. Guarin, by virtue of a purported court order issued by
Judge Eliodoro B. Guinto of RTC-Branch 57. Also appearing as
Entry No. 1127 in TCT No. 64884 is the "Secretarys Certificate"
in favor of Felix H. Limcauco and Entry No. 1128 which is the sale
in favor of Ellenora Limcauco. However, the copy of the court
order in Cad. Case No. A-124-160 presented to said Register of
Deeds was not signed by Judge Guinto who had denied before the
NBI authorities having signed such order or having conducted
hearing on said case. The copy submitted to the Register of
Deeds was merely stamped "Original Signed." Another document
certifying that the Order granting the petition in Cad. Case No. A124-160 had become final and executory was also submitted to
the Register of Deeds in connection with the cancellation of TCT
No. 64884. However, then Branch Clerk of Court Benedicto A.
Pineda testified that he did not sign said certification and neither
had he been aware of the proceedings in Cad. Case No. A-124160. Atty. Pinedas signature on said certification appears to have
been falsified by one Lorenzo San Andres.
(4) Although the property covered by TCT No. 10896 has already
been subdivided into different lots and covered by separate titles
Page 80 of 99
in the name of Ma. Teresa Limcauco, said lots were not yet
transferred or conveyed to third parties. But as to the property
covered by TCT No. 64884, said certificate of title was cancelled
and a new certificate of title, TCT No. 75436/T-378 was issued in
the name of Ellenora Vda. De Limcauco. On September 23, 1987,
a Deed of Absolute Sale was executed by Ellenora Vda. De
Limcauco in favor of defendant Raul P. Claveria whereby the
property covered by TCT No. 64884 was supposedly sold to said
defendant for the sum of P5,139,126.00. On September 24, 1987,
TCT No. 75436/T-378 was cancelled and a new certificate of
title, TCT No. 75533 was issued in the name of defendant Raul P.
Claveria. On October 21, 1987, defendant spouses Raul and Elea
Claveria mortgaged the property with the defendant Philippine
Trust Company to guarantee a loan in the amount
of P8,000,000.00, which mortgage was duly registered and
annotated as Entry No. 2858 in TCT No. 75533.
On December 26, 1989, plaintiff instituted the present action against the
defendants Ma. Teresa Limcauco, Ellenora D. Limcauco, spouses Raul P.
Claveria and Elea R. Claveria, Philippine Trust Company and the Register
of Deeds of Angeles City. The Complaint alleged conspiratorial acts
committed by said defendants who succeeded in causing the fraudulent
transfer of registration of plaintiffs properties in the names of Ma.
Teresa Limcauco and Ellenora D. Limcauco and the subdivision of the
land covered by TCT No. 10896 over which separate titles have been
issued. Plaintiff prayed that the trial court render judgment (a) declaring
the deeds of sale of March 9, 1987, October 5, 1987 and September 23,
1987 as well as TCT Nos. 75436, 75533, 87269, 85585, 85587, 85589
and 85591, all of the Registry of Deeds of Angeles City as void ab initio,
(b) directing the reconveyance of the aforesaid real property in the name
of plaintiff corporation, and (c) sentencing defendants to pay plaintiff
sums ofP1,000,000.00 as moral damages, P100,000.00 plus daily
appearance fee of P1,000.00 as attorneys fees, and costs of suit.
Defendant Philippine Trust Bank filed a motion for bill of particulars
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Prof. Avena
which was granted by the trial court, and accordingly plaintiff amended
its Complaint to specifically allege the fraudulent acts and irregularities
in the transfer of registration of its properties, in addition to those
already specified in the Complaint. Thus plaintiff alleged in addition that
(1) the supposed court Order directing the issuance of another owners
duplicate copy actually did not exist, copy of said Order not bearing
either the signature of the judge or his branch clerk of court as well as
the court seal, and yet accepted at face value in conspiracy or at least
negligently, by defendant Register of Deeds of Angeles City, not to
mention the haste, among other signs of conspiracy, with which said new
owners duplicate copy of the title was issued; (2) the mortgage executed
by defendant-spouses Claveria in favor of defendant bank was
characterized by irregularities, the bank having extended a loan in the
amount of P8 million, far in excess of the propertys market value
of P2,855,070.00, as well as the haste in which said loan was granted.
In its Answer, defendant Philippine Trust Company denied the
allegations of the Complaint as to the irregularities in the granting of
the P8 million loan to defendant-spouses Raul and Elea Claveria.
According to said defendant, the Claveria spouses have been their clients
since 1986 and on October 2, 1987, all their outstanding obligations in
the amount of P7,300,000.00 were consolidated into one (1) account on
clean basis. Defendant bank had required the Claveria spouses to secure
their clean loan of P7,300,000.00 with a real estate mortgage, and hence
on October 21, 1987, said spouses executed mortgage on real property
covered by TCT No. 75533 for an obligation of P8 million after securing
an advance from the defendant bank in the amount of P700,000.00. It
had subjected the land offered as security to the usual bank appraisals
and examined the genuineness and authenticity of TCT No. 75533 with
the Register of Deeds of Angeles City and found the same to be in
existence and in order. Thereupon, the deed of mortgage executed by the
Claveria spouses was registered by the defendant bank with the Register
of Deeds and had it annotated in the original copy of the title. Defendant
bank thus prayed that after due hearing, the complaint against it be
Page 81 of 99
dismissed and a decision be rendered (a) holding as valid and legal the
mortgage on the real property covered by TCT No. 75533 of the Registry
of Deeds of Angeles City, and (b) on its counterclaim, ordering the
plaintiff to pay to defendant bank the amounts ofP50,000.00 as actual
damages, P1,000,000.00 as moral damages, P100,000.00 as attorneys
fees, and the costs of suit.
On motion of plaintiff, the trial court ordered the service of summons by
publication with respect to defendants Ma. Teresa Limcauco, Ellenora
Limcauco, Raul P. Claveria and Elea Claveria, whose addresses could not
be located by the Sheriff and even by the parties.
Defendant Register of Deeds of Angeles City filed his Answer denying
that he conspired with the other defendants in effecting the transfer of
registration of the subject properties and averring that it had issued the
questioned transfer certificates of title to defendants Ma. Teresa
Limcauco, Ellenora Vda. de Limcauco and the spouses Raul and Elea
Claveria on the basis of documents filed with it and existing in the Office
of the Register of Deeds of Angeles City. In his defense, defendant
Register of Deeds maintained that he had no reason or basis to question
the validity and legality of the documents presented before him for
registration nor to question the genuineness of the signatures appearing
therein, as well as the Orders of RTC-Angeles City, Branch 57, which
contained a signature over and above the typewritten name of Judge
Eliodoro B. Guinto. He had the right to assume that official functions
were regularly performed. Plaintiff therefore has no cause of action
against the defendant Register of Deeds as the latter merely performed
his duties and functions embodied under Sec. 10 of P.D. No. 1529. By
way of counterclaim, defendant Register of Deeds alleged bad faith and
malice in plaintiffs filing of the complaint against him, stating that (1)
despite plaintiffs knowledge that defendant Register of Deeds has not
committed any act of malfeasance or misfeasance in the registration of
the subject certificates of title, he was subjected to an investigation by
NBI authorities at the instance of plaintiff and was compelled to give a
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Prof. Avena
sworn statement before said government authorities in order to clear his

name; and (2) plaintiffs former counsel had earlier manifested that the
Register of Deeds was being impleaded merely as a nominal party;
however, in a sudden and unexplained turnabout, plaintiff impleaded
defendant Register of Deeds as a principal party in its Amended
Complaint. Defendant Register of Deeds thus prayed for the dismissal of
the complaint against him for utter lack of merit and on his
counterclaim, that a decision be rendered ordering the plaintiff to pay
the defendant Register of Deeds the following sums: P200,000.00 by way
of moral damages, P100,000.00 by way of exemplary
damages, P20,000.00 by way of attorneys fees plus P500.00 per
appearance, and costs of suit.
In an Order dated October 30, 1991, the trial court declared the
defendants Ma. Teresa Limcauco, Ellenora Limcauco, Raul P. Claveria
and Elea R. Claveria in default for their failure to file the necessary
responsive pleadings despite the lapse of sixty (60) days from the last
day of publication of summons, and accordingly allowed the plaintiff to
present its evidence ex parte against the said defendants. During the pretrial conference held on November 25, 1991, plaintiffs counsel
manifested that it was joining the defendant Register of Deeds only as a
nominal party as the latter also waived his counterclaim against the
plaintiff.
On February 4, 1992, the trial court granted plaintiffs motion to
authenticate the signatures appearing in the Deeds of Sale of October 5,
1987 and March 6, 1987, and that of Josefina K. Limcauco appearing in
the Secretarys Certificate containing the supposed Board resolution of
plaintiff approving the sale of the parcels of land covered by TCT Nos.
10896 and 64884. The said documents were ordered forwarded to the
NBI for authentication. During the pre-trial conference conducted on
August 25, 1992, the parties agreed on two (2) issues for resolution
during the trial: (1) whether or not the Deeds of Absolute Sale
purportedly executed by the plaintiff covering the subject real
Page 82 of 99
properties, as well as the titles issued thereat, TCT Nos. 75436, 75533,
87269, 85585, 85587, 85589 and 85591, all of the Registry of Deeds of
Angeles City are genuine and valid; and (2) whether or not the mortgage
on the real property covered by TCT No. 75533 of the Registry of Deeds
of Angeles City is valid and legal. At the trial proper, plaintiff presented
as its witnesses Jose Marie L. Ramos (Vice-President of plaintiff
corporation), Alberto Ramos (NBI officer), Eliodoro Constantino (NBI
handwriting expert), Felix H. Limcauco, Jr. (former President of plaintiff
corporation) and Atty. Benedicto Pineda (former Branch Clerk of Court
of RTC- Angeles City, Branch 57). Defendant Philippine Trust Company,
on the other hand, presented the testimony of defendant Atty. Honesto
Guarin (Register of Deeds of Angeles City). After the formal offer of the
respective documentary evidence of the parties and submission of their
memoranda, the case was submitted for decision. x x x.3
On December 29, 1993, the RTC rendered its Decision in favor of private
respondent Forfom Development Corporation (Forfom):
WHEREFORE, all the [foregoing] considered, judgment is hereby
rendered in favor of the plaintiff and against the defendants Philippine
Trust Co., spouses Raul P. Claveria and Elea R. Claveria, Ma. Teresa
Limcauco @ Honorata Dizon and Ellenora Vda. de Limcauco @ Honorata
Dizon:
1. Declaring the Deeds of Sale of 9 March 1987, 23 September
1987 and 5 October 1987 as well as Transfer Certificates of Title
Nos. 75436, 75533, 82760, 85585, 85587, 85589 and 85591 all
of the Register of Deeds of Angeles City as void ab initio;
2. Ordering the Register of Deeds of Angeles City to reinstate
Transfer Certificates of Title Nos. 10896 and 64884 in the name
of the plaintiff or to issue new transfer certificate of title for the
same parcels of land in the name of the plaintiff-corporation free
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from liens and encumbrances made subsequent to the

cancellation of the said two (2) titles;
3. Ordering the defendants Philippine Trust Co., spouses Raul P.
Claveria and Elea R. Claveria, Ma. Teresa Limcauco @ Honorata
Dizon and Ellenora Vda. de Limcauco @ Honorata Dizon to pay
jointly and severally the plaintiff the sum of P50,000.00 as actual
damages in the form of attorneys fees; and
Page 83 of 99
The appellate court further took note of Philtrusts refusal to present the
records and details of its transactions with the spouses Claveria despite
being pressed to do so by Forfom. The Court of Appeals found this
circumstance cast serious doubt on Philtrusts allegation that it was a
mortgagee in good faith.
On August 21, 2001, the Court of Appeals denied Philtrusts Motion for
Reconsideration. Hence, this Petition forCertiorari, where Philtrust
raises the following arguments:
4. To pay the costs of this suit.4

On January 21, 1994, petitioner Philippine Trust Company (Philtrust)
filed a Notice of Appeal, alleging that the lower court erred in declaring
Transfer Certificate of Title No. 75533-Angeles City void and in
concluding that it was a mortgagee in bad faith. Philtrust further claims
that Forfom was negligent with its property.
On June 15, 2001, the Court of Appeals rendered the assailed Decision
affirming the Decision of the RTC:
WHEREFORE, premises considered, the present appeal is hereby
DISMISSED and the appealed Decision of the trial court in Civil Case No.
6087 is hereby AFFIRMED and REITERATED.5
According to the Court of Appeals, Philtrust was negligent in its credit
investigation procedures and its standards for granting of loans, as
shown by (a) its previously extending unsecured and uncollateralized
loans to the spouses Raul and Elea Claveria, and (b) its failure to
discover the latters statement of a fictitious address in the mortgage
contract and being the subject of estafa cases. The Court of Appeals
agreed with the trial courts finding that Philtrust acted in haste in the
execution of the mortgage and loan contracts, as the property, assessed
only at more than P2 million and allegedly purchased at more than P5
million, was made to secure the principal loan obligation of P8 million.
1. The Court of Appeals committed grave abuse of discretion

amounting to lack or excess of jurisdiction in finding there was
lack of evidence that Philtrust was a mortgagee in good faith;
hence, capriciously and wantonly ascribed bad faith to the
latter;6
amounting to lack or excess of jurisdiction in finding that
Philtrust had actual knowledge of facts and circumstances
pertaining to the fraudulent transfer of the registration of the
subject property from the name of Forfom to the name of
Ellenora Limcauco, when there was no iota of evidence to
support such factual finding; hence, capriciously and wantonly
ascribed bad faith to Philtrust as the mortgagee of the said
property;7 and
amounting to lack or excess of jurisdiction in completely
disregarding the well-settled rule that a forged deed may be the
root of a valid title; hence, capriciously and wantonly nullified
the real estate mortgage executed by the spouses Claveria in
favor of Philtrust.8
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Prof. Avena
Contrary to the allegation in the third argument presented by Philtrust,

the Court of Appeals did not seem to have disregarded the rule that a
forged deed may be the root of a valid title. The appellate court clearly
specified the circumstances allowing the application of such rule:
A forged deed may be the root of a valid title when an innocent
purchaser for value intervenes. A purchaser in good faith and for value is
one who buys the property of another without notice that some other
person has a right to or interest in such property and pays a full and fair
price for the same, at the time of such purchase, or before he has notice
of the claims or interest of some other person in the property. It has
been held that where a mortgagee bank accepted the mortgage in good
faith, the land involved being registered land, it is not bound to go
[beyond] the certificate of title to look for flaws in the mortgagors title,
the doctrine of innocent purchaser for value being applicable to an
innocent mortgagee for value. A mortgagee in good faith and for value is
entitled to protection. A bank is not required, before accepting a
mortgage, to make an investigation of the title of the property being
given as security. This is a consequence of the rule that a person dealing
with registered land has a right to rely upon the face of the Torrens
certificate of title and to dispense with the need of inquiring further,
except when the party concerned has actual knowledge of facts and
circumstances that would impel a reasonably cautious man to make such
inquiry.9
Indeed, the presence of anything which excites or arouses suspicion
should prompt the vendee or mortgagee to look beyond the certificate
and investigate the title of the vendor appearing on the face of said
certificate.10 If the vendee or mortgagee failed to do so before the
execution of the contract, the vendee or mortgagee is deemed to be in
bad faith and therefore cannot acquire any title under the forged
instrument.
Page 84 of 99
The determination of the case at bar, therefore, hinges on the resolution

of the first two issues, which deal with whether Philtrust is a mortgagee
in good or bad faith. However, since what Philtrust filed with us is a
Petition for Certiorari rather than a Petition for Review, a finding that
Philtrust is in good faith is not enough for us to grant the Petition. A
mere error in the judgment of the Court of Appeals in affirming the RTC
Decision would not be enough; nothing less than grave abuse of
discretion on the part of the Court of Appeals is required for the issuance
of the Writ of Certiorari.
Philtrust claims that the loans secured by the mortgage on the subject
property were granted to the spouses Claveria after Philtrust was
satisfied regarding the spouses credit worthiness and capacity to
pay.11 In fact, according to Philtrust, the spouses Claveria were able to
maintain a satisfactory record of payment during the early period of
their transactions with the bank.12 Philtrust insists that prior to the
constitution of the mortgage, it followed the standard operating
procedures in accepting property as security, including having
investigators visit the subject property and appraise its value.13
When the Court of Appeals ruled that these claims by Philtrust were not
supported by evidence, the latter countered before us that its allegations
were supported by the following documents: (a) the Promissory
Note;14 (b) the Deed of Mortgage;15 and (c) TCT No. 75533.16 Philtrust
adds that it stated in the Answer to Interrogatories that it followed the
standard operating procedures in accepting the property as security.
Since said Answer to Interrogatories is a notarized document, Philtrust
claims that it is a public document which is conclusive as to the
truthfulness of its contents.17
It is settled that banks, their business being impressed with public
interest, are expected to exercise more care and prudence than private
individuals in their dealings, even those involving registered
lands.18 The rule that persons dealing with registered lands can rely
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solely on the certificate of title does not apply to banks.19Consequently,

Philtrust should prove that it exercised extraordinary diligence required
of it in approving the mortgage contract in favor of the spouses Claveria.
Page 85 of 99
(c) Public records, kept in the Philippines, of private documents

required by law to be entered therein.
All other writings are private.
It baffles us how Philtrust can argue that the promissory note and Deed
of Mortgage executed by the spouses Claveria, and the TCT of the subject
property, can prove its allegations that (a) the mortgage was granted
after it was satisfied of the spouses credit worthiness; (b) the latter was
able to maintain a satisfactory record of payment early on; or (c) it
followed the standard operating procedures in accepting property as
security, including having investigators visit the subject property and
appraise its value. The mere fact that Philtrust accepted the subject
property as security most certainly does not prove that it followed the
standard operating procedure in doing so. As regards Philtrusts claim
that the Answer to Interrogatories, being a notarized document, is
conclusive as to the truthfulness of its contents, we deem it necessary to
clarify the doctrines cited by Philtrust on this matter.
Section 19, Rule 132 of the Rules of Court enumerates three kinds of
public documents, to wit:
Sec. 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
Notarized documents fall under the second classification of public

documents. However, not all types of public documents are deemed
prima facie evidence of the facts therein stated:
Sec. 23. Public documents as evidence. Documents consisting of entries
in public records made in the performance of a duty by a public officer
are prima facie evidence of the facts therein stated. All other public
documents are evidence, even against a third person, of the fact which
gave rise to their execution and of the date of the latter.20
"Public records made in the performance of a duty by a public officer"
include those specified as public documents under Section 19(a), Rule
132 of the Rules of Court and the acknowledgement,21 affirmation or
oath,22 or jurat23portion of public documents under Section 19(c). Hence,
under Section 23, notarized documents are merely proof of the fact
which gave rise to their execution (e.g., the notarized Answer to
Interrogatories in the case at bar is proof that Philtrust had been served
with Written Interrogatories), and of the date of the latter (e.g., the
notarized Answer to Interrogatories is proof that the same was executed
on October 12, 1992, the date stated thereon),24but is not prima facie
evidence of the facts therein stated. Additionally, under Section 30 of the
same Rule, the acknowledgement in notarized documents is prima facie
evidence of the execution of the instrument or document involved (e.g.,
the notarized Answer to Interrogatories is prima facie proof that
petitioner executed the same).25
The reason for the distinction lies with the respective official duties
attending the execution of the different kinds of public instruments.
Official duties are disputably presumed to have been regularly
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Page 86 of 99
performed.26 As regards affidavits, including Answers to Interrogatories

which are required to be sworn to by the person making them,27 the only
portion thereof executed by the person authorized to take oaths is the
jurat. The presumption that official duty has been regularly performed
therefore applies only to the latter portion, wherein the notary public
merely attests that the affidavit was subscribed and sworn to before him
or her, on the date mentioned thereon. Thus, even though affidavits are
notarized documents, we have ruled that affidavits, being self-serving,
must be received with caution.28
2. Although the spouses Claveria had declared their residence to be in

the plush subdivision in Ayala Alabang, Philtrust was content to receive
as security a land outside Metro Manila, which was only recently
acquired by the said spouses. When asked about this in the Request for
Interrogatories, Philtrust merely responded evasively:
Philtrust, therefore, presented no evidence rebutting the following

badges of bad faith shown in the records of the case. Even though
circumstantial, the following adequately prove by preponderance of
evidence that Philtrust was aware of the fraudulent scheme perpetrated
upon Forfom:
[ANSWER:]
1. Within a period of less than one year, Philtrust extended unsecured

loans amounting toP7,300,000.00 to the spouses Claveria as shown in its
Answer wherein it declared:
Spouses Raul and Elea Claveria has been clients of the bank since 1986
and on October 2, 1987, all their outstanding obligations in the amount
of P7,300,000.00 were consolidated into one account on a clean basis.29
All Philtrust can give is a very general explanation for these unsecured
loans:
5. Why were the Claveria spouses granted loans without collaterals at
the onset?30
7. Did the bank not request from the Claveria spouses collateral within
the Metro Manila area and if so what was the reply of the Claveria
spouses?32
7. The bank requested for collateral on the P8,300,000.00 loan

preferably located in Metro Manila.33
3. It is presumed that evidence willfully suppressed would be adverse if
produced.34 When pressed in the Request for Interrogatories for details
of the investigation of the bank, and for the names of the persons who
allegedly visited the subject property and the alleged home of the
spouses Claveria, and the names of the bank officers who dealt with said
spouses, Philtrust refused to do so:
10. Prior to the execution of the real estate mortgage by the Claveria
spouses on the Angeles City property subject of the above-captioned
case, what investigation, if any did the bank undertake for the physical
examination of said property, what were the results, if any, of such
physical examination of the property, and the name or names of the
persons who visited the property?35
[ANSWER:]
[ANSWER:]
5. The Claveria spouses passed the standards set by the bank.31
10. The Angeles property was appraised in accordance with the usual
procedure in the appraisal of property offered as collateral. The
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Prof. Avena
property was visited by the investigators of the Credit Department of the

bank.36
15. Did an officer or employee of the bank actually visit the given
residences of the Claveria spouses in Angeles City and Bacolod City, the
result of such visit, and the name or names of the persons representing
the bank who visited such places? 371avvphi1
[ANSWER:]
15. As stated above, the last known address of spouses was 406 Caliraya
Street, New Alabang, Muntinlupa, M.M.38
17. Who was the particular bank officer who dealt directly with the
Claveria spouses and handled their accounts?39
[ANSWER:]
17. The Loans and Discounts Department of the bank handled the
accounts of the spouses.40
The RTC and the Court of Appeals considered these circumstances as
circumstantial evidence of Philtrusts awareness of the fraudulent
scheme against Forfom. Nevertheless, Philtrust up to this date persists
with suppressing these details:
Petitioner humbly believes and strongly maintains its position that the
presentation of all documents pertaining to the loan transactions of
Spouses Claveria is unnecessary, irrelevant, and immaterial in its
defense of good faith before the court a quo. Nevertheless, as discussed
above, Petitioner had sufficiently proved through its Answer to
Interrogatories and loan documents extant in the records of the case that
it prudently complied with the standard practice of banks in accepting
mortgage.41
Page 87 of 99
4. Philtrust persistently refused to cooperate with the National Bureau of

Investigation (NBI) in its investigation of the fraudulent scheme
perpetrated against Forfom, as testified by NBI agents Alberto V. Ramos
and Pastor T. Pangan,42 and as shown in NBI Investigation Report NBINCR 10-11-90 90-2-5507.43
5. Had Philtrust properly conducted a credit investigation of the spouses
Claveria, it would have easily discovered that they did not reside and
never resided in the address declared by them, as revealed in the
investigation by the NBI44 and declared by the association of
homeowners in the New Alabang subdivision.45
All the foregoing considered, we find that the Court of Appeals did not
even err in finding that Philtrust was in bad faith in the execution of the
mortgage contract with the spouses Claveria. Consequently, Philtrust
miserably failed to prove that the Court of Appeals committed grave
abuse of discretion amounting to lack or excess of jurisdiction in
rendering the assailed Decision and Resolution.
WHEREFORE, the instant Petition for Certiorari is DISMISSED. The
Decision of the Court of Appeals dated June 15, 2001 and the subsequent
Resolution denying reconsideration dated August 21, 2001
are AFFIRMED.
Costs against petitioner Philippine Trust Company.
SO ORDERED.
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
WE CONCUR:
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RENATO C. CORONA
Chief Justice
Chairperson
Associate Justice
DIOSDADO M. PERALTA
Associate Justice
JOSE PORTUGAL PEREZ

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the
conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts
Division.
RENATO C. CORONA
Chief Justice
Footnotes
*
Per Special Order No. 913 dated November 2, 2010.
Rollo, pp. 155-163; penned by Associate Justice Martin S.

Villarama, Jr. (now a member of this Court) with Associate
Justices Conrado M. Vasquez, Jr. and Alicia L. Santos, concurring.
Id. at 177.
Id. at 163.
Id. at 693.
Id. at 704-705.
Id. at 713.
Id. at 161, citing the following cases: Diaz-Duarte v. Ong, 358

Phil. 876 (1998); Rural Bank of Compostela v. Court of Appeals,
337 Phil. 521 (1997); Gonzales v. Intermediate Appellate Court,
241 Phil. 630 (1988); Mallorca v. De Ocampo, 145 Phil. 17
(1970); Director of Lands v. Abache, 73 Phil. 606 (1942); De la
Cruz v. Fabie, 35 Phil. 144 (1916).
9
Sandoval v. Court of Appeals, 329 Phil. 48, 60 (1996),

citing Pino v. Court of Appeals, G.R. No. 94114, June 19, 1991, 198
SCRA 434, 440; Centeno v. Court of Appeals, 224 Phil. 91, 102
(1985).
10
11
Rollo, p. 693.
12
Id.
13
Id. at 694.
14
Exhibit "A"; Rollo, p. 727.
15
Exhibit "B"; Id. at 728-729.
16
Exhibit "C"; Id. at 730-732.
Id. at 165.
Id. at 156-160.
Page 88 of 99
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17
Prof. Avena
Rollo, pp. 694-695.
Development Bank of the Philippines v. Court of Appeals, 387

Phil. 283, 302 (2000); Cavite Development Bank v. Lim, 381 Phil.
355, 368-369 (2000); Tomas v. Philippine National Bank, 187
Phil. 183, 187-188 (1980).
18
Ursal v. Court of Appeals, G.R. No. 142411, October 14, 2005,

473 SCRA 52, 63-64; Rural Bank of Compostela v. Court of
Appeals, supra note 9.
have been served shall file and serve a copy of the answers on
the party submitting the interrogatories within fifteen (15) days
after service thereof, unless the court, on motion and for good
cause shown, extends or shortens the time.
Philippine Long Distance Telephone Company, Inc. v. Tiamson,
G.R. Nos. 164684-85, November 11, 2005, 474 SCRA 761, 776.
28
19
20
21
22
23
24
29
Records, p. 127.
30
Id. at 633.
31
Id. at 636.
32
Id. at 633.
33
Id. at 636.
34
Rules of Court, Rule 131, Section 3(e).
35
36
Id. at 637.
37
Id. at 634.
38
Id. at 637.
39
Id. at 634.
40
Id. at 637.
41
Petitioners Memorandum, p. 10; rollo, p. 695.
Rules of Court, Rule 132, Section 23.

See 2004 Rules on Notarial Practice, Rule II, Section 1.
Id. at Section 2.
Id. at Section 6.
Records, p. 638.
Sec. 30. Proof of notarial documents. Every instrument duly

acknowledged or proved and certified as provided by law, may
be presented in evidence without further proof, the certificate of
acknowledgment being prima facie evidence of the execution of
the instrument or document involved. (Rules of Court, Rule 132.)
25
26
27
Rules of Court, Rule 131, Section 3(m).

Rules of Court, Rule 25, Section 2 provides:
Sec. 2. Answer to interrogatories. The interrogatories shall be

answered fully in writing and shall be signed and sworn to by the
person making them. The party upon whom the interrogatories
Page 89 of 99
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42
TSN, October 6, 1992, pp. 12, 31 and 41.
43
Exhibit C, records, p. 728, 741 (No. 42).
44
TSN, October 6, 1992, p. 11.
45
TSN, September 16, 1992, pp. 23-24; 28-29.
Page 90 of 99
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SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 174240
March 20, 2013
SPOUSES LEHNER and LUDY MARTIRES, Petitioners,

vs.
MENELIA CHUA, Respondent.
DECISION
Page 91 of 99
ownership is evidenced by a Deed of Sale and Certificate of Perpetual

Care, denominated as Contract No. 31760, which was executed on June
4, 1992.3
On December 18, 1995, respondent borrowed from petitioner spouses
the amount of P150,000.00. The loan was secured by a real estate
mortgage over the abovementioned property. Respondent committed to
pay a monthly interest of 8% and an additional 10% monthly interest in
case of default.4
Respondent failed to fully settle her obligation.
PERALTA, J.:
Subsequently, without foreclosure of the mortgage, ownership of the

subject lots were transferred in the name of petitioners via a Deed of
Transfer.5
Before the Court is a petition for review on certiorari under Rule 45 of

the Rules of Court seeking to reverse and set aside the Amended
Decision,1 as well as the Resolutions2 of the Court of Appeals (CA), dated
September 30, 2005, July 5, 2006 and August 28, 2006, respectively, in
CA-G.R. CV No. 76388. The assailed Decision of the CA reversed and set
aside its earlier Decision, dated April 30, 2004, in favor of petitioners.
The July 5, 2006 Resolution denied petitioners' Motion for
Reconsideration, while the August 28, 2006 Resolution denied
petitioners' Second Motion for Reconsideration.
On June 23, 1997, respondent filed with the Regional Trial Court (RTC)
of Quezon City a Complaint against petitioners, Manila Memorial Park
Inc., the company which owns the Holy Cross Memorial Park, and the
Register of Deeds of Quezon City, praying for the annulment of the
contract of mortgage between her and petitioners on the ground that the
interest rates imposed are unjust and exorbitant. Respondent also
sought accounting to determine her liability under the law. She likewise
prayed that the Register of Deeds of Quezon City and Manila Memorial
Park, Inc. be directed to reconvey the disputed property to her.6
The factual and procedural antecedents of the case are as follows:
On November 20, 1998, respondent moved for the amendment of her

complaint to include the allegation that she later discovered that
ownership of the subject lots was transferred in the name of petitioners
by virtue of a forged Deed of Transfer and Affidavit of Warranty.
Respondent prayed that the Deed of Transfer and Affidavit of Warranty
be annulled.7 In their Manifestation dated January 25, 1999, petitioners
did not oppose respondent's motion.8 Trial ensued.
Subject of the instant controversy are twenty-four memorial lots located

at the Holy Cross Memorial Park in Barangay Bagbag, Novaliches,
Quezon City. The property, more particularly described as "Lot: 24 lots,
Block 213, Section: Plaza of Heritage-Reg.," is covered by Transfer
Certificate of Title (TCT) No. 342914. Respondent, together with her
mother, Florencia R. Calagos, own the disputed property. Their co-
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After trial, the RTC of Quezon City rendered a Decision in favor of

petitioners, the dispositive portion of which reads, thus:
Wherefore, premises considered, judgment is hereby rendered against
Menelia R. Chua and in favor of the Sps. Lehner Martires and Ludy
Martires; and Manila Memorial Park Cemetery, Inc. as follows:
1. The Complaint is denied and dismissed for lack of merit;
Page 92 of 99
Insofar as defendant-appellee Manila Memorial Park Cemetery, Inc. is

concerned, the attorney's fees awarded is reduced to P10,000.00 plus
costs of suit.
SO ORDERED.10
The CA ruled that respondent voluntarily entered into a contract of loan
and that the execution of the Deed of Transfer is sufficient evidence of
petitioners' acquisition of ownership of the subject property.
2. The counterclaims are granted as follows:

a. Menelia R. Chua is ordered to pay the Sps. Martires the
amount of P100,000.00 as moral damages; the amount
of P50,000.00 as exemplary damages; and the amount
of P30,000.00 as reasonable attorneys fees plus costs of
suit.
Respondent filed a Motion for Reconsideration.11 Petitioners opposed

it.12
On September 30, 2005, the CA promulgated its assailed Amended
Decision with the following dispositive portion:
WHEREFORE, the Court grants the movant's Motion for Reconsideration.
b. Menelia R. Chua is ordered to pay Manila Memorial

Park Cemetery, Inc. the amount of P30,000.00 as
reasonable attorney's fees plus costs of suit.
SO ORDERED.9
On appeal, the CA affirmed, with modification, the judgment of the RTC,
disposing as follows:
WHEREFORE, premises considered, the instant appeal is hereby DENIED
for lack of merit, and the decision of the trial court dated 03 August 2002
is hereby AFFIRMED with MODIFICATION as to the amount of moral and
exemplary damages, and attorney's fees. Plaintiff-appellant Menelia R.
Chua is hereby ordered to pay the defendant-appellees Spouses Martires
the amount of P30,000.00 as moral damages; P20,000.00 as exemplary
damages; and attorney's fees of P10,000.00 plus costs of suit.
Accordingly, the decision of this Court dated April 30, 2004 in CA-G.R. CV
No. 76388, which had affirmed the judgment of the Regional Trial Court
of Quezon City, Branch 221, in Civil Case No. Q-97-31408, is REVERSED
and SET ASIDE, and it is hereby declared that:
(1) The assailed decision dated August 3, 2002 of the Regional Trial
Court of Quezon City Branch 221 in Civil Case No. Q-97-31408 is hereby
Reversed with the following MODIFICATIONS, to wit:
(1) The Deed of Transfer dated July 3, 1996, as well as the
Affidavit of Warranty, are hereby declared void ab initio;
(2) The loan of P150,000.00 is hereby subject to an interest of
12% per annum.
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(3) The Manila Memorial Park Cemetery, Inc. and the Register of
Deeds of Quezon City [are] hereby directed to cancel the
registration or annotation of ownership of the spouses Martires
on Lot: 24 lots, Block 213, Section: Plaza Heritage Regular, Holy
Cross Memorial Park, being a portion of Transfer Certificate of
Title No. 342914 issued by the Register of Deeds of Quezon City,
and revert registration of ownership over the same in the name
of appellant Menelia R. Chua, and Florencia R. Calagos.
(4) The movant, Menelia R. Chua, is hereby ordered to pay the
spouses Martires the amount ofP150,000.00 plus interest of 12%
per annum computed from December 18, 1995 up to the time of
full payment thereof and, after deducting payments made in the
total amount of P80,000.00, the same shall be paid within ninety
(90) days from the finality of this decision. In case of failure to
pay the aforesaid amount and the accrued interests from the
period hereinstated, the property shall be sold at public auction
to satisfy the mortgage debt and costs, and if there is an excess,
the same is to be given to the owner.
No costs.
SO ORDERED.13
The CA reconsidered its findings and concluded that the Deed of
Transfer which, on its face, transfers ownership of the subject property
to petitioners, is, in fact, an equitable mortgage. The CA held that the true
intention of respondent was merely to provide security for her loan and
not to transfer ownership of the property to petitioners. The CA so ruled
on the basis of its findings that: (1) the consideration, amounting
to P150,000.00, for the alleged Deed of Transfer is unusually inadequate,
considering that the subject property consists of 24 memorial lots; (2)
the Deed of Transfer was executed by reason of the same loan extended
by petitioners to respondent; (3) the Deed of Transfer is incomplete and
Page 93 of 99
defective; and (4) the lots subject of the Deed of Transfer are one and the
same property used to secure respondent's P150,000.00 loan from
petitioners.
Petitioners filed a Motion for Reconsideration,14 but the CA denied it in
its Resolution dated July 5, 2006.
On July 26, 2006, petitioners filed a Second Motion for
Reconsideration,15 but again, the CA denied it via its Resolution dated
August 28, 2006.
Hence, the present petition based on the following grounds:
A. THE COURT OF APPEALS PATENTLY ERRED IN NOT UPHOLDING
THE DEED OF TRANSFER EXECUTED BY THE RESPONDENT IN FAVOR
OF THE PETITIONERS BY RULING THAT:
1. The Deed of Transfer executed by respondent in favor of
petitioners over the subject property was not entered in the
Notarial Book of Atty. Francisco Talampas and reported in the
Notarial Section of the Regional Trial Court of Makati City.
2. The Deed of Transfer was not duly notarized by Atty. Francisco
Talampas inasmuch as there was no convincing proof that
respondent appeared before Notary Public Atty. Talampas.
B. THE COURT OF APPEALS PATENTLY ERRED IN RULING THAT THE
DEED OF TRANSFER EXECUTED BETWEEN THE RESPONDENT AND
THE PETITIONERS CONSTITUTED AN EQUITABLE MORTGAGE
CONSIDERING THAT:
1. Said issue was not raised in any pleading in the appellate and
trial courts.1wphi1
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2. Respondent herself admitted that a separate mortgage was

executed to secure the loan.16
The petition lacks merit.
Page 94 of 99
filing did not toll the running of the period to file an appeal by
certiorari.17 Petitioners made a critical mistake in waiting for the CA to
resolve their second motion for reconsideration before pursuing an
appeal.
At the outset, the instant petition should be denied for being filed out of
time. Petitioners admit in the instant petition that: (1) on July 18, 2006,
they received a copy of the July 5, 2006 Resolution of the CA which
denied their Motion for Reconsideration of the assailed Amended
Decision; (2) on July 26, 2006, they filed a Motion to Admit Second
Motion for Reconsideration attaching thereto the said Second Motion for
Reconsideration; (3) on September 5, 2006, they received a copy of the
August 28, 2006 Resolution of the CA which denied their Motion to
Admit as well as their Second Motion for Reconsideration; and (4) they
filed the instant petition on October 20, 2006.
Perfection of an appeal within the reglementary period is not only

mandatory but also jurisdictional.18 For this reason, petitioners' failure
to file this petition within the 15-day period rendered the assailed
Amended CA Decision and Resolutions final and executory, thus,
depriving this Court of jurisdiction to entertain an appeal therefrom.19On
this ground alone, the instant petition should be dismissed.
Section 2, Rule 45 of the Rules of Court provides that a petition for

review on certiorari under the said Rule "shall be filed within fifteen
(15) days from notice of the judgment or final order or resolution
appealed from or of the denial of the petitioner's motion for new trial or
reconsideration filed in due time after notice of the judgment." Relative
thereto, Section 2, Rule 52 of the same Rules provides that "no second
motion for reconsideration of a judgment or final resolution by the same
party shall be entertained." Based on the abovementioned dates, the
start f the 15-day period for the filing of this petition should have been
reckoned from July 18, 2006, the time of petitioners' receipt of the CA
Resolution denying their Motion for Reconsideration, and not on
September 5, 2006, the date when they received the CA Resolution
denying their Second Motion for Reconsideration. Thus, petitioners
should have filed the instant petition not later than August 2, 2006. It is
wrong for petitioners to reckon the 15-day period for the filing of the
instant petition from the date when they received the copy of the CA
Resolution denying their Second Motion for Reconsideration. Since a
second motion for reconsideration is not allowed, then unavoidably, its
Anent the first assigned error, petitioners are correct in pointing out that
notarized documents carry evidentiary weight conferred upon them
with respect to their due execution and enjoy the presumption of
regularity which may only be rebutted by evidence so clear, strong and
convincing as to exclude all controversy as to falsity.20However, the
presumptions that attach to notarized documents can be affirmed only
so long as it is beyond dispute that the notarization was regular.21 A
defective notarization will strip the document of its public character and
reduce it to a private instrument.22 Consequently, when there is a defect
in the notarization of a document, the clear and convincing evidentiary
standard normally attached to a duly-notarized document is dispensed
with, and the measure to test the validity of such document is
preponderance of evidence.23
In any case, even granting, arguendo, that the present petition is timely
filed, the Court finds no cogent reason to depart from the findings and
conclusions of the CA in its disputed Amended Decision.
In the present case, the CA has clearly pointed out the dubious
circumstances and irregularities attendant in the alleged notarization of
the subject Deed of Transfer, to wit: (1) the Certification24 issued by the
Clerk of Court of the Notarial Section of the RTC of Makati City which
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Prof. Avena
supposedly attested that a copy of the subject Deed of Transfer is on file

with the said court, was contradicted by the Certification25 issued by the
Administrative Officer of the Notarial Section of the same office as well
as by the testimony of the court employee who prepared the
Certification issued by the Clerk of Court, to the effect that the subject
Deed of Transfer cannot, in fact, be found in their files; (2) respondent's
categorical denial that she executed the subject Deed of Transfer; and (3)
the subject document did not state the date of execution and lacks the
marital consent of respondent's husband.
Indeed, petitioners' heavy reliance on the Certification issued by the
notary public who supposedly notarized the said deed, as well as the
Certification issued by the Clerk of Court of the Notarial Section of the
RTC of Makati City, is misplaced for the following reasons: first, the
persons who issued these Certifications were not presented as witnesses
and, as such, they could not be cross-examined with respect to the
truthfulness of the contents of their Certifications; second, as mentioned
above, these Certifications were contradicted by the Certification issued
by the Administrative Officer of the Notarial Section of the RTC of Makati
City as well as by the admission, on cross-examination, of the clerk who
prepared the Certification of the Clerk of Court, that their office cannot,
in fact, find a copy of the subject Deed of Transfer in their files;26 and
third, the further admission of the said clerk that the Certification, which
was issued by the clerk of court and relied upon by petitioners, was not
based on documents existing in their files, but was simply based on the
Certification issued by the notary public who allegedly notarized the said
Deed of Transfer.27
Assuming further that the notarization of the disputed Deed of Transfer
was regular, the Court, nonetheless, is not persuaded by petitioners'
argument that such Deed is a sufficient evidence of the validity of the
agreement between petitioners and respondent.
Page 95 of 99
While indeed a notarized document enjoys the presumption of

regularity, the fact that a deed is notarized is not a guarantee of the
validity of its contents.28 The presumption is not absolute and may be
rebutted by clear and convincing evidence to the contrary.29 In the
present case, the presumption cannot be made to apply, because aside
from the regularity of its notarization, the validity of the contents and
execution of the subject Deed of Transfer was challenged in the
proceedings below where its prima facie validity was subsequently
overthrown by the questionable circumstances attendant in its supposed
execution. These circumstances include: (1) the alleged agreement
between the parties that the ownership of the subject property be
simply assigned to petitioners instead of foreclosure of the contract of
mortgage which was earlier entered into by them; (2) the Deed of
Transfer was executed by reason of the loan extended by petitioners to
respondent, the amount of the latter's outstanding obligation being the
same as the amount of the consideration for the assignment of
ownership over the subject property; (3) the inadequacy of the
consideration; and (4) the claim of respondent that she had no intention
of transferring ownership of the subject property to petitioners.
Based on the foregoing, the Court finds no cogent reason to depart from
the findings of the CA that the agreement between petitioners and
respondent is, in fact, an equitable mortgage.
An equitable mortgage has been defined as one which, although lacking
in some formality, or form or words, or other requisites demanded by a
statute, nevertheless reveals the intention of the parties to charge real
property as security for a debt, there being no impossibility nor anything
contrary to law in this intent.30
One of the circumstances provided for under Article 1602 of the Civil
Code, where a contract shall be presumed to be an equitable mortgage, is
"where it may be fairly inferred that the real intention of the parties is
that the transaction shall secure the payment of a debt or the
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performance of any other obligation." In the instant case, it has been

established that the intent of both petitioners and respondent is that the
subject property shall serve as security for the latter's obligation to the
former. As correctly pointed out by the CA, the circumstances
surrounding the execution of the disputed Deed of Transfer would show
that the said document was executed to circumvent the terms of the
original agreement and deprive respondent of her mortgaged property
without the requisite foreclosure.
With respect to the foregoing discussions, it bears to point out that in
Misena v. Rongavilla,31 a case which involves a factual background
similar to the present case, this Court arrived at the same ruling. In the
said case, the respondent mortgaged a parcel of land to the petitioner as
security for the loan which the former obtained from the latter.
Subsequently, ownership of the property was conveyed to the petitioner
via a Deed of Absolute Sale. Applying Article 1602 of the Civil Code, this
Court ruled in favor of the respondent holding that the supposed sale of
the property was, in fact, an equitable mortgage as the real intention of
the respondent was to provide security for the loan and not to transfer
ownership over the property.
Since the original transaction between the parties was a mortgage, the
subsequent assignment of ownership of the subject lots to petitioners
without the benefit of foreclosure proceedings, partakes of the nature of
a pactum commissorium, as provided for under Article 2088 of the Civil
Code.
Pactum commissorium is a stipulation empowering the creditor to
appropriate the thing given as guaranty for the fulfillment of the
obligation in the event the obligor fails to live up to his undertakings,
without further formality, such as foreclosure proceedings, and a public
sale.32
Page 96 of 99
In the instant case, evidence points to the fact that the sale of the subject
property, as proven by the disputed Deed of Transfer, was simulated to
cover up the automatic transfer of ownership in petitioners' favor. While
there was no stipulation in the mortgage contract which provides for
petitioners' automatic appropriation of the subject mortgaged property
in the event that respondent fails to pay her obligation, the subsequent
acts of the parties and the circumstances surrounding such acts point to
no other conclusion than that petitioners were empowered to acquire
ownership of the disputed property without need of any foreclosure.
Indeed, the Court agrees with the CA in not giving credence to
petitioners' contention in their Answer filed with the RTC that
respondent offered to transfer ownership of the subject property in their
name as payment for her outstanding obligation. As this Court has held,
all persons in need of money are liable to enter into contractual
relationships whatever the condition if only to alleviate their financial
burden albeit temporarily.33
Hence, courts are duty-bound to exercise caution in the interpretation
and resolution of contracts lest the lenders devour the borrowers like
vultures do with their prey.34 Aside from this aforementioned reason,
the Court cannot fathom why respondent would agree to transfer
ownership of the subject property, whose value is much higher than her
outstanding obligation to petitioners. Considering that the disputed
property was mortgaged to secure the payment of her obligation, the
most logical and practical thing that she could have done, if she is unable
to pay her debt, is to wait for it to be foreclosed. She stands to lose less of
the value of the subject property if the same is foreclosed, rather than if
the title thereto is directly transferred to petitioners. This is so because
in foreclosure, unlike in the present case where ownership of the
property was assigned to petitioners, respondent can still claim the
balance from the proceeds of the foreclosure sale, if there be any. In such
a case, she could still recover a portion of the value of the subject
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Prof. Avena
property rather than losing it completely by assigning its ownership to

petitioners.
As to the second assigned error, the Court is not persuaded by
petitioners' contention that the issue of whether or not the subject Deed
of Transfer is, in fact, an equitable mortgage was not raised by the latter
either in the RTC or the CA.
It is true that, as a rule, no issue may be raised on appeal unless it has
been brought before the lower tribunal for its consideration.35 Higher
courts are precluded from entertaining matters neither alleged in the
pleadings nor raised during the proceedings below, but ventilated for
the first time only in a motion for reconsideration or on
appeal.36 However, as with most procedural rules, this maxim is subject
to exceptions.37 In this regard, the Court's ruling in Mendoza v.
Bautista38 is instructive, to wit:
x x x Indeed, our rules recognize the broad discretionary power of an
appellate court to waive the lack of proper assignment of errors and to
consider errors not assigned. Section 8 of Rule 51 of the Rules of Court
provides:
SEC. 8 Questions that may be decided. - No error which does not affect
the jurisdiction over the subject matter or the validity of the judgment
appealed from or the proceedings therein will be considered, unless
stated in the assignment of errors, or closely related to or dependent on
an assigned error and properly argued in the brief, save as the court may
pass upon plain errors and clerical errors.
matters not assigned as errors on appeal but consideration of which is

necessary in arriving at a just decision and complete resolution of the
case or to serve the interests of justice or to avoid dispensing piecemeal
justice; (d) matters not specifically assigned as errors on appeal but
raised in the trial court and are matters of record having some bearing
on the issue submitted which the parties failed to raise or which the
lower court ignored; (e) matters not assigned as errors on appeal but
closely related to an error assigned; and (f) matters not assigned as
errors on appeal but upon which the determination of a question
properly assigned, is dependent.39
In the present case, petitioners must be reminded that one of the main
issues raised by respondent in her appeal with the CA is the validity and
due execution of the Deed of Transfer which she supposedly executed in
petitioners' favor. The Court agrees with respondent that, under the
factual circumstances obtaining in the instant case, the determination of
the validity of the subject Deed of Transfer would necessarily entail or
involve an examination of the true nature of the said agreement. In other
words, the matter of validity of the disputed Deed of Transfer and the
question of whether the agreement evidenced by such Deed was, in fact,
an equitable mortgage are issues which are closely related, which can,
thus, be resolved jointly by the CA.
WHEREFORE, the instant petition is DENIED. The assailed Amended
Decision and Resolutions of the Court of Appeals, dated September 30,
2005, July 5, 2006 and August 28, 2006, respectively, in CA-G.R. CV No.
76388, are AFFIRMED.
SO ORDERED.
Thus, an appellate court is clothed with ample authority to review

rulings even if they are not assigned as errors in the appeal in these
instances: (a) grounds not assigned as errors but affecting jurisdiction
over the subject matter; (b) matters not assigned as errors on appeal but
are evidently plain or clerical errors within contemplation of law; (c)
Page 97 of 99
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
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Associate Justice
Chairperson
Designated Acting Member, in lieu of Associate Justice Jose

Catral Mendoza, per Raffle dated March 18, 2013.
*
Penned by Associate Justice Bienvenido L. Reyes (now a

member of this Court), with Associate Justices Ruben T. Reyes
(now a retired member of this Court) and Jose C. Mendoza (now
a member of this Court), concurring; rollo, pp. 32-52.
1
LUCAS P. BERSAMIN*
Associate Justice
ROBERTO A. ABAD
Associate Justice
MARVIC MARIO VICTOR F. LEONEN

Associate Justice
ATTESTATION
the Court's Division.
Associate Justice
CERTIFICATION
Chairperson's Attestation, I certify that the conclusions in the above
to the writer of the opinion of the Court's Division.
MARIA LOURDES P. A. SERENO
Chief Justice
Footnotes
Page 98 of 99
Annexes "B" and "C" to Petition, rollo, pp. 54-59.
Exhibit "A," records, p. 237.
Exhibit "D"/"7," id. at 241.
Exhibit "B"/"8," id. at 239.
Records, pp. 1-6.
Id. at 170-177.
Id. at 195.
Id. at 365-366.
10
CA rollo, p. 109. (Emphasis in the original)
11
Id. at 113-125.
12
Id. at 135-152.
13
Id. at 183-184.
14
Id. at 185-195.
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Prof. Avena
15
Id. at 260-270.
16
Rollo, pp. 16-17.
Tagle v. Equitable PCI Bank, G.R. No. 172299, April 22, 2008,
552 SCRA 424, 445.
17
Page 99 of 99
Muoz, Jr. v. Ramirez, G.R. No. 156125, August 25, 2010, 629
SCRA 38, 51; Rockville Excel International Exim Corporation v.
Culla, G.R. No. 155716, October 2, 2009, 602 SCRA 128, 136.
30
31
363 Phil. 361 (1999).
Edralin v. Philippine Veterans Bank, G.R. No. 168523, March 9,

2011, 645 SCRA 75, 89.
32
Ong v. Philippine Deposit Insurance Corp., G.R. No. 175116,

August 18, 2010, 628 SCRA 415, 426.
18
19
33
Bustamante v. Rosel, 377 Phil. 436, 445 (1999).
34
Id.
Id.
Meneses v. Venturozo, G.R. No. 172196, October 19, 2011, 659

SCRA 577, 586.
20
21
22
23
24
Id.
36
Id.
37
Id.
38
493 Phil. 804 (2005).
39
Id. at 813-814. (Emphasis supplied)
Id.
Id.
Exhibit "20," records, p. 325.
25
Exhibit "H," id. at 291.
26
TSN, November 20, 2001, pp. 12-17.
27
Id. at 7-17.
Lazaro v. Agustin, G.R. No. 152364, April 15, 2010, 618 SCRA
298, 311; San Juan v. Offril, G.R. No. 154609, April 24, 2009, 586
SCRA 439, 445-446.
28
29
Ang v. Associated Bank, G.R. No. 146511, September 5, 2007,

532 SCRA 244, 267.
35
Id; id. at 446.

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Law 126 Evidence

35. NOTARIAL DOCUMENTS

35. NOTARIAL DOCUMENTS

Republic of the Philippines

Municipal Trial Court in Cities (MTCC) of Cebu City in an ejectment

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35. NOTARIAL DOCUMENTS

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35. NOTARIAL DOCUMENTS

The Respondent Sheriff could have exercised prudence and restraint in

recorded in a public office, its contents may be proved by a certified copy

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35. NOTARIAL DOCUMENTS

The validity, genuineness, authenticity and due execution of the

Sheriff Margarito Costelo, Jr. having acted without [any] authority to

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35. NOTARIAL DOCUMENTS

Investigating Judge.18 He claimed that the penalty of dismissal from

Calubian, all the employees would register a perfect attendance with no

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35. NOTARIAL DOCUMENTS

In his Report, the Investigating Judge confirmed that respondent effected

complainant, in accordance with Section

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35. NOTARIAL DOCUMENTS

by the parties. In the absence of such agreement, the sale of real

justice, respondents conduct and behavior must be circumscribed with

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35. NOTARIAL DOCUMENTS

amendment, correction or expungement of records or

MINITA V. CHICO NAZARIO

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PRESBITERO J. VELASCO, JR.

35. NOTARIAL DOCUMENTS

Rollo, Vol. II, pp. 31-32.

Rollo, Vol. I, pp. 228-241.

Rollo (Vol. II), pp. 35-46.

Rollo, Vol. I, pp. 8-13.

Docketed as Civil Case No. R-36953, entitled "Doris Sunbanon v.

Rollo, Vol. I, p. 15.

Sec. 6. Personal service. Service of the papers may be made

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35. NOTARIAL DOCUMENTS

Firaza v. People of the Philippines, G.R. No. 154721, March 22,

A.M. No. P-04-1875, February 6, 2008, 544 SCRA 1, 7.

Vilar v. Angel, A.M. P-06-2276, February 5, 2007, 514 SCRA

A.M. No. 03-06-13-SC effective June 1, 2004.

Promulgated by the Civil Service Commission through

A.M. No. P-00-1445, April 30, 2003, 402 SCRA 21.

Flores v. Marquez, A.M. P-06-2277, December 6, 2006, 510

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35. NOTARIAL DOCUMENTS

Republic of the Philippines

April 16, 2009

MARISSA R. UNCHUAN, Petitioner,

agreed to advance the purchase price of US$367,000 or P10,000,000 for

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35. NOTARIAL DOCUMENTS

A witness for petitioner, one Dr. Cecilia Fuentes, testified on Peregrinas

In both cases, Marissa R. Unchuan is ordered to pay the costs of suit.

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35. NOTARIAL DOCUMENTS

WHETHER THE HONORABLE SUPREME COURT MAY AND SHOULD