Case Summary (G.R. No. 244076)
Issue on Appeal
Whether the notarized Deed of Sale is valid and binding, and whether Felix is entitled to actual damages for lost business opportunities due to Faustino’s refusal to deliver the title.
Regional Trial Court Decision
The RTC upheld the Deed of Sale’s regularity, relying on the presumption that notarized instruments are duly executed absent clear and convincing evidence to the contrary. It credited Atty. Calabio’s testimony that both parties appeared before him, and rejected Tan Po Chu’s vague, hearsay testimony. The RTC ordered Faustino and Gloria to surrender the title and awarded attorney’s fees.
Court of Appeals Decision
The CA reversed, deeming the sale void for lack of consideration. It found Tan Po Chu’s testimony “critical,” concluding that Faustino signed only to appease his mother and that Felix failed to prove payment of the purchase price. The CA set aside the RTC’s decision and refused to award damages.
Supreme Court Ruling on Jurisdiction and Scope
Under Rule 45, review is confined to questions of law, except when CA findings conflict with those of the trial court. The Supreme Court found the CA’s reversal of the RTC’s factual findings unjustified and restored the RTC decision.
Presumption of Regularity and Evidentiary Weight
Notarized documents enjoy a strong presumption of authenticity, regularity, and due execution. Overcoming this presumption requires clear, convincing, and more-than-preponderant proof. The CA improperly overturned it based solely on Tan Po Chu’s inconsistent testimony, which the RTC legitimately discounted given her lack of personal knowledge and understanding of the document’s terms.
Simulation Doctrine and Contractual Intent
Absolute simulation voids contracts where parties intend no legal effect. Here, Faustino’s own testimony confirmed his intent to bind himself and guarantee eventual transfer to Felix upon full payment. He admitted his staff prepared the Deed, he and his wife signed it knowingly, and he presented it to his mother for safekeeping. These facts negate any claim of absolute or relative simulation.
Consideration and Payment
A valid contract requires consent, object, and cause—not actual payment at the time of execution. The Deed itself expressly acknowledges full payment of ₱3,130,000.00. Faustino cannot disavow the contractual recitals in a duly notarized instrument, and n
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Antecedents
- Faustino and Gloria Chingkoe were registered owners of a parcel of land in Ayala Heights, Quezon City, covered by TCT No. 8283.
- Sometime in 1990, Faustino allowed his brother Felix to occupy the subject property.
- At the behest of their mother, Tan Po Chu, Faustino signed an undated Deed of Sale to appease Felix, who was then struggling with alcoholism.
- Felix claimed continuous possession from 1989 and, on October 10, 1994, executed a notarized Deed of Sale for ₱3,130,000.00 before Notary Public Atty. Reynaldo Z. Calabio.
- Despite demand, Faustino refused to surrender the Owner’s Duplicate of TCT No. 8283 and subsequently mortgaged the property to RCBC.
- Felix filed a complaint for specific performance with damages to compel surrender of the title and effect the transfer.
RTC Decision
- On May 12, 2014, the Regional Trial Court (RTC) declared the Deed of Absolute Sale valid and duly executed on October 10, 1994.
- The RTC upheld the presumption of regularity of the notarized Deed of Sale and credited Atty. Calabio’s testimony on acknowledgment formalities.
- The RTC awarded Felix and Rosita Chingkoe attorney’s fees of ₱50,000.00.
- Upon Felix’s motion for partial reconsideration, the RTC modified its order to direct Faustino and Gloria to surrender the Owner’s Duplicate of TCT No. 8283.
CA Decision
- On April 30, 2018, the Court of Appeals (CA) granted Faustino’s appeal and reversed the RTC decision and order.
- The CA gave decisive weight to Tan Po Chu’s testimony that Faustino signed the deed merely to pacify Felix, lacking intent to sell.
- The CA held that Felix failed to prove actual payment of the ₱3,130,000.00 purchase price, rendering the contract void for lack of consideration.
- Felix’s motion for reconsideration before the CA was denied.
Issues Presented to the Supreme Court
- Whether the CA erred in overturning the presumption of regularity of the notarized Deed of Sale based solely on