Case Summary (G.R. No. 148376)
Facts: original ownership, acquisition and the disputed April 19, 1990 document
- The land was originally owned by Villaner’s parents and was transferred to Villaner by Deed of Absolute Sale dated July 6, 1971. The 1990 document executed by Villaner in favor of his godson-nephew Leonardo is recorded as a Deed of Absolute Sale for P10,000 but Villaner later claimed that what he actually signed was a Lease Contract modeled on an earlier (1976) lease with Maria Luisa Montenegro. Leonardo claims he paid the P10,000 consideration and then transferred the property to Ramon Nicolas on May 19, 1990.
Parties’ primary contentions
- Petitioners (Leonardo and Ramon): The April 19, 1990 instrument is a valid Deed of Absolute Sale; Leonardo paid the consideration and became owner; Ramon is a purchaser from Leonardo and is entitled to protection. Petitioners also argue procedural error by the Court of Appeals in not applying Rule 8, Sec. 8 (failure of Villaner to deny under oath the genuineness and due execution of the instrument).
- Respondents (Villaner and co-heirs): Villaner contends he was deceived, that he signed a lease (not a sale), that the witnesses’ signatures on the deed are not those of the alleged witnesses, and that the sale consideration is grossly inadequate. Co-heirs assert the deed does not bind them because the property is conjugal at the time of acquisition and they did not consent to its sale.
Evidentiary record and witness testimony
- Villaner testified that his agreement with Leonardo was only to lease the land for three years at P1,000 per hectare, not to sell; he claimed he did not read the document, saw employees of Judge Villegas as witnesses, but the deed bears signatures of Carmelo Cadalin and his wife; he denied receiving the P10,000.
- Carmelo (Mellie) Cadalin admitted preparing the Deed of Absolute Sale, testified Villaner read the deed and signed it, and stated Leonardo paid Villaner the consideration; Cadalin also prepared related affidavits.
- Atty. Vicente Real (notary) testified that he notarized the document and on cross-examination conceded inability to positively recall every person who brings a document for notarization.
- The trial court-appointed commissioner (Victor Ragay) conducted an ocular inspection and reported most of the 18 hectares were uncultivated or unsuitable for sugarcane and that comparable nearby sales fetched very low per-hectare prices.
Procedural challenge: Rule 8, Section 8 argument and court’s analysis
- Petitioners argued that under Rule 8, Sec. 8 of the Rules of Court, Villaner’s failure to deny under oath the genuineness and due execution of the Deed of Absolute Sale precluded him from contesting it.
- The Supreme Court rejected that contention: failure to deny the genuineness and due execution of an actionable document does not bar a party from introducing evidence that the instrument is affected by fraud, mistake, compromise, payment, statute of limitations, estoppel, or lack of consideration. The Court relied on doctrinal authorities to hold that Rule 8 Sec. 8 does not immunize an actionable document from being contested on substantive grounds.
Burden of proof and standard for allegations of fraud or lack of consent
- The Court reaffirmed established evidentiary principles: the burden rests on the party who alleges a fact (ei incumbit probatio qui dicit), and allegations that consent to a contract was vitiated by fraud or undue influence must be proven by clear and convincing evidence, not merely by preponderance.
- Applying that standard, Villaner bore the burden to prove he was deceived into signing a deed of sale; the Court found that his evidence consisted largely of bare assertion and conjecture (e.g., the hypothesis that the deed copies were substituted under the lease contract) and was not corroborated by the witnesses whose signatures he alleged were forged or by independent proof.
Credibility findings on signature, witness identification and notarization
- The Court credited Cadalin’s testimony that he prepared the deed, that Villaner read and signed it, and that Leonardo paid Villaner the consideration; this testimony was corroborated by Cadalin’s wife’s signature as witness and related documentary preparations.
- Villaner’s denial that the signatures were those of the two women employees of Judge Villegas was undermined by his failure to produce those women as witnesses. The notary’s testimony did not conclusively support Villaner: on cross-examination the notary admitted inability to recall every client, weakening any affirmative corroboration of Villaner’s claim that he did not present the deed for notarization. The Court concluded Villaner failed to prove deception or forgery by clear and convincing evidence.
Valuation and inadequacy of consideration
- Villaner argued the sale price of P10,000 for the 18.15-hectare parcel was unusually low. The Court noted Villaner failed to present evidence of the property’s fair market value as of April 19, 1990. Tax declarations for various years and a 1994 declaration were insufficient to prove market value at the time of sale.
- The court-appointed commissioner’s report indicated most of the land was uncultivated, rocky, with only 3–4 hectares planted to sugarcane, and nearby comparable sales showed extremely low per-hectare prices (e.g., P266.67/ha for a 6-ha adjoining lot). Using that comparator, the P10,000 price was reasonable. The Court also reiterated that mere inadequacy of price does not vitiate a sale unless the price is so grossly inadequate as to shock conscience; Villaner did not meet that standard.
Comprehensive Agrarian Reform Law (RA 6657) argument
- Villaner contended the sale violated retention limits under RA 6657. The Court analyzed the law and concluded that only lands devoted to or suitable for agriculture are covered. The ocular inspection reported that only up to four hectares were suitable for agriculture; consequently, the land was not within the scope of the agrarian retention limits as to the entire 18 hectares. Even if portions were agricultural and a violation existed, the Court pointed out the remedies are limited and also noted that Villaner and Leonardo would be in pari delicto (equally in fault), which would preclude Villaner from obtaining affirmative relief in equity.
Pari delicto, Article 1416 exception, and equitable considerations
- The Court applied the doctrine of in pari delicto: a wrongdoer cannot seek judicial relief grounded on an illegal act. Because Villaner participated in the transaction that might have contravened the spirit of RA 6657, he could not ask courts to set the sale aside against Leonardo, his co-wrongdoer.
- The Court considered the statutory exception under Civil Code Article 1416 (allowing recovery where the prohibition is designed to protect the plaintiff) but found the prohibition in RA 6657 is designed to protect beneficiary farmers, not the landowner-seller; hence Article 1416 did not aid Villaner.
Conjugal property, co-ownership and effect of sale by one co-owner
- The Court treated the property as conjugal (acquired July 6, 1971 during Villaner’s marriage). Under Article 160 of the Civil Code (and pre-Family Code rules applicable to the marriage period), property acquired during marriage is presumed conjugal. Registration in the husband’s name alone does not overcome the presumption.
- Upon his wife’s death, the conjugal partnership terminated; Villaner’s undivided share became actual (one-half) and the deceased wife’s half passed to her heirs, producing a co-ownership regime among Villaner and the heirs. Villaner’s overall interest amounted to 5/9 of the property (9/18 + 1/18 = 10/18 = 5/9) under the mathematical all
Case Syllabus (G.R. No. 148376)
Procedural Posture
- Petition for Review on Certiorari to the Supreme Court from the Court of Appeals Decision dated February 15, 2001 (CA-G.R. CV No. 56148) reversing the Regional Trial Court (RTC) of Dumaguete City, Branch 35 (RTC Decision of August 8, 1996).
- Parties: Petitioners — Leonardo Acabal and Ramon Nicolas (defendants in RTC); Respondents — Villaner Acabal and eight co-heirs (plaintiffs in RTC).
- Relief sought below: annulment of deeds of sale executed by respondent Villaner in favor of Leonardo and subsequent transfer to Ramon Nicolas; trial court had dismissed the complaint in favor of Leonardo and Ramon; Court of Appeals reversed, holding the Deed of Absolute Sale simulated and fictitious; petitioners seek reversal of CA decision before the Supreme Court.
- Supreme Court disposition: Petition granted; Court of Appeals decision reversed and set aside; sale in favor of Leonardo and subsequent sale to Ramon Nicolas declared valid only insofar as five-ninths (5/9) of the subject property; no pronouncement as to costs. Opinion by Justice Carpio Morales; Justices Panganiban (Chairman), Sandoval-Gutierrez, Corona, and Garcia concur.
Core Factual Background
- Subject property: parcel in Barrio Tanglad, Manjuyod, Negros Oriental, described in Tax Declaration No. 15856, reported area 18.15 hectares more or less (also described in some documents as 186,000 square meters); originally owned by Alejandro Acabal and Felicidad Balasabas.
- Prior transfer: By Deed of Absolute Sale dated July 6, 1971, Villaner’s parents sold the 18.15-hectare land to Villaner for P2,000.00 while he was married to Justiniana Lipajan.
- Subsequent document: On April 19, 1990, Villaner executed a document conveying the same property in favor of his godson-nephew Leonardo Acabal (Exhibits “C” and “1”).
- Nature of April 19, 1990 instrument disputed: Deed of Absolute Sale (as the document itself and witnesses Carmelo Cadalin and his wife Lacorte attest) vs. Villaner’s claim it was a Lease Contract (allegedly modeled on a July 1976 lease with Maria Luisa Montenegro).
- Consideration and transfers: Deed of Absolute Sale purports consideration of P10,000.00 (acknowledged receipt in instrument); Leonardo allegedly paid, then sold property to Ramon Nicolas on May 19, 1990 (Exhibits “D” and “3”).
Plaintiff-Respondent (Villaner) Allegations and Testimony
- Villaner contended the April 19, 1990 document he signed was a Lease Contract, not a Deed of Sale, wherein he allegedly leased the property to Leonardo for three years at P1,000.00 per hectare.
- Villaner’s sworn testimony (sampling of points):
- Stated there was an agreement to rent, not to sell.
- Asserted puzzlement over why he signed the document and that he did not read its contents beyond the title “Lease Contract.”
- Claimed the witnesses to the instrument were two women employees of Judge Villegas of Bais City and that their signatures appearing on the deed were not theirs.
- Said he did not appear before a notary public after signing and did not receive P10,000.00 after April 19, 1990.
- Reported that on May 25, 1990, when Leonardo did not pay, he went to Carmelo (Mellie) Cadalin (who prepared the papers) to inquire.
- Asserted he had earlier given to Leonardo some papers and a contract of lease he had signed with Mrs. Montenegro to serve as the template.
- Suggested, without proof, that copies of a Deed of Sale may have been placed under the Lease Contract copies he signed.
- Procedural maneuver: complaint amended to implead Villaner’s eight children as co-plaintiffs, heirs of his deceased wife.
Defendant-Petitioners (Leonardo and Ramon) Contentions and Testimony
- Leonardo maintained the April 19, 1990 instrument was a valid Deed of Absolute Sale; consideration P10,000.00 had been paid; he became absolute owner and later sold to Ramon Nicolas.
- Ramon Nicolas asserted buyer-in-good-faith status upon acquiring the property from Leonardo.
- Carmelo (Mellie) Cadalin’s testimony (document preparer and witness):
- Admitted he prepared the Deed of Absolute Sale at Villaner’s and Leonardo’s request after initial reluctance due to workload.
- Testified he gave the prepared deed to Villaner to read, that Villaner read it and signed, and that after signing Villaner was given the payment by Leonardo.
- Identified his own and his wife’s signatures as the witness signatures appearing on the deed.
- Stated he also prepared an Affidavit of Non-Tenancy and Aggregate Area for them.
Evidentiary Posture and Burden of Proof
- Governing evidentiary principle reiterated: burden of proof lies on the party who alleges (ei incumbit probatio, qui dicit, non qui negat).
- Allegations of fraud or lack of valid consent must be established by clear and convincing evidence, not by mere preponderance.
- Supreme Court held that Villaner, as plaintiff alleging deception, had the burden to prove he was deceived into executing the Deed of Absolute Sale, and that he failed to produce sufficient corroborative evidence.
- Court rejected petitioners’ procedural argument invoking Rule 8, Section 8 (failure to deny genuineness of document under oath), holding that such failure does not preclude a party from arguing against the document by evidence of fraud, mistake, compromise, payment, statute of limitations, estoppel, or want of consideration.
Credibility Findings and Witness Evaluation
- Villaner’s uncorroborated conjectures (e.g., that deed copies were surreptitiously placed) were deemed insufficient; “facts not conjectures decide cases.”
- Villaner’s claim that the deed’s witness signatures were not those of the two women employees of Judge Villegas was discredited because he failed to present those alleged women witnesses to testify.
- Atty. Vicente Real (notary public) testimony was equivocal: on direct examination he appeared to corroborate Villaner’s claim he did not bring the document for notarization; on cross-examination Atty. Real conceded difficulty in recalling every person seeking notarization and admitted memories of frequent visitors could lead to mistaken identifications; his testimony did not conclusively support Villaner’s version.
- Cadalin’s testimony that Villaner read and signed the deed and that payment was given by Leonardo strongly corroborated petitioners’ posi