G.R. No. 171321 - Deheza-Inamarga vs. Alano

Petitioner Mary Ann Deheza-Inamarga is the niece of Tomas Alano, husband of respondent Celenia Alano.
Tomas Alano owned two parcels of land originally covered by Original Certificates of Title (OCT) Nos. P-761 and P-762.
In 1972, Tomas mortgaged the properties in favor of Renato Gepty.

In 1976, faced with Gepty’s demand for the loan payment, Tomas lacked funds to redeem the properties and sought assistance from his niece.
Petitioner agreed to pay the loan on behalf of Tomas.
Subsequently, the spouses (respondents) mortgaged the said properties to petitioner.
Petitioner took possession of the OCTs and instructed the spouses to sign blank pieces of paper which were purportedly to serve as receipts evidencing their indebtedness.

After Tomas Alano’s death, in November 1990, respondents approached petitioner to redeem the properties.
Petitioner claimed that she had mortgaged the properties to the Rural Bank of Libacao.
Respondents, upon verification with the bank, discovered that the OCTs had been cancelled and replaced by Transfer Certificates of Title (TCT) Nos. T-9080 and T-9081 issued in petitioner’s name.
The TCTs were issued on the basis of a purported Deed of Sale allegedly executed by the Spouses Alano in favor of petitioner.

On January 24, 1991, respondents filed a complaint for the declaration of nullity of the document, reconveyance of the properties, and damages against petitioner and the Rural Bank of Libacao.
Respondents asserted that:

The signatures of the Spouses Alano on the Deed of Sale were forged.
Even if genuine, the blank nature of the paper precluded it from constituting a valid deed of sale.

The Spouses Alano had offered to sell the property to her.
The sale was intended so that the purchase price (P7,000) could be used to redeem the property from Gepty.
The action was barred by prescription, laches, and estoppel.

On November 26, 1998, the Regional Trial Court (RTC) issued a decision declaring:

The transaction between the parties to be an equitable mortgage.
That respondents were entitled to redeem the properties upon payment of the mortgage debt (P2,400 plus interest).
The Deed of Sale executed on March 4, 1978 as null and void.
The nullity of TCT Nos. T-9080 and T-9081 and ordered their reconveyance to respondents.
Award of exemplary damages (P50,000) and attorney’s fees (P10,000) against petitioner.

That the signatures were indeed forged or executed under circumstances tainted with fraud.
That the transaction was one of equitable mortgage rather than sale.
That the award of exemplary damages and attorney’s fees was justified.

Petitioner elevated the case to the Supreme Court on certiorari, raising several points of error regarding the trial and appellate courts' findings.

Whether the purported Deed of Sale executed by the Spouses Alano was a forgery or if, even if genuine, it was improperly formed by being signed on blank paper.

Petitioner argued that respondents did not present a handwriting expert, thus failing to conclusively prove forgery.
Respondents contended that the trial court’s findings, including subtle discrepancies in the signatures, sufficed to establish forgery.

Whether the transaction between petitioner and the Spouses Alano constituted a contract of sale or one of equitable mortgage.

Petitioner maintained that it was a valid sale evidenced by the presence of a deed executed before a notary public and her possession of the OCTs.
Respondents argued that various circumstantial facts – such as the inadequacy of the purchase price, the continued possession by the sellers, and additional markers of their intent – supported the characterization as an equitable mortgage.

Whether respondents’ action for reconveyance and damages is barred by prescription, laches, or estoppel.

Petitioner claimed that the filing delay (approximately 13 years after TCT issuance) rendered the action time-barred under the prescriptive period for implied or constructive trust.
Respondents maintained that since the deed of sale was void ab initio, the usual periods for prescription did not apply.

Whether the award of exemplary damages and attorney’s fees against petitioner is legally supportable and justified by the facts of the case.

Petitioner contended that awarding such damages and fees was not in accordance with law given the nature of the transaction.
Respondents argued that petitioner’s fraudulent act of inducing blind signatures and subsequent detrimental actions warranted punitive measures.