Title
Chingkoe vs. Chingkoe
Case
G.R. No. 244076
Decision Date
Mar 16, 2022
Faustino Chingkoe signed a notarized Deed of Sale transferring property to Felix Chingkoe. Despite claims of no intent to sell, the Supreme Court upheld the sale, emphasizing the presumption of regularity of notarized documents and ordering Faustino to surrender the title.
actual damages
unrealized profits
notary public

Case Summary (G.R. No. 244076)

Factual Background

The subject was a parcel of land in Lopez Jaena Street, Ayala Heights, Quezon City, covered by Transfer Certificate of Title No. 8283 and registered in the names of Faustino and Gloria Chingkoe. Faustino alleged that circa 1990 he permitted his brother Felix to occupy the property and, at their mother Tan Po Chu’s request, signed an undated Deed of Sale which their mother retained to appease Felix. Felix averred that he had possessed the property since 1989 and that on October 10, 1994 he purchased the property from Faustino for PHP 3,130,000, both parties appearing before Notary Public Atty. Reynaldo Z. Calabio to acknowledge the Deed of Sale.

Commencement of Litigation

After repeated demands, Faustino refused to surrender the owner’s duplicate of TCT No. 8283, and Felix later discovered that Faustino had mortgaged the property to RCBC. Felix and Rosita therefore filed a complaint for specific performance with damages to compel surrender of the title and to effect the transfer pursuant to the Deed of Sale.

Trial Court Proceedings and Ruling

The Regional Trial Court, Branch 101, Quezon City, rendered judgment in favor of Felix and Rosita on May 12, 2014. The RTC found the notarized Deed of Sale duly executed and entitled to the presumption of regularity, rejecting the testimony of Tan Po Chu as insufficient to overturn this presumption. The RTC awarded PHP 50,000 as attorney’s fees and, upon partial reconsideration, ordered surrender of the owner’s duplicate of TCT No. 8283.

Appeal to the Court of Appeals

Faustino appealed to the Court of Appeals. The CA, in its April 30, 2018 Decision, reversed the RTC. The CA credited Tan Po Chu’s testimony as "critical" and concluded that Felix failed to prove payment of the contract price, thereby finding the Deed of Sale void for lack of consideration and characterizing the transaction as a simulation induced by the mother’s request.

Issues on Review

The Supreme Court considered whether the Court of Appeals committed legal error in reversing the RTC by accepting Tan Po Chu’s testimony as sufficient to overcome the presumption of regularity attaching to a notarized Deed of Sale, and whether the purported failure to prove payment rendered the contract void for lack of consideration. The Court also addressed whether Felix proved entitlement to actual damages for lost business opportunities.

Petitioners’ Contentions

Felix contended that the CA erred in treating Tan Po Chu’s testimony as determinative without explaining how the RTC misjudged her credibility and without reconciling her testimony with Atty. Calabio’s attestation that the parties appeared before him and with Felix’s testimony as to payment and signing. Felix also asserted entitlement to actual damages for unrealized profits caused by Faustino’s refusal to surrender the title.

Supreme Court’s Ruling — Disposition

The Supreme Court granted the petition and reversed the Court of Appeals. The RTC Decision dated May 12, 2014, and its Order dated July 30, 2015, were reinstated. The Court denied the award of actual damages for unrealized profits.

Legal Basis and Reasoning — Evidentiary Presumption

The Court reaffirmed that notarized documents enjoy the presumption of regularity which may be overcome only by clear and convincing evidence. The Court held that the CA erred in overturning that presumption based solely on Tan Po Chu’s testimony because her testimony was repetitive, unresponsive, and demonstrated lack of personal knowledge of the document’s contents. The Court noted that she could not read English, did not know the contract price, and admitted she "did not pay too much attention" to the instrument; she was neither present at notarization nor involved in its preparation and thus her testimony amounted to inadmissible hearsay on matters beyond her personal knowledge.

Legal Basis and Reasoning — Contractual Intent and Execution

The Court emphasized the competence of trial courts to assess witness credibility given their opportunity to observe demeanor. It found compelling evidence that Faustino intended to be bound by the Deed of Sale: Atty. Calabio attested that both parties appeared for notarization; Faustino admitted his staff prepared the Deed and that he and his wife signed it; and Faustino acknowledged the existence of the Deed and the intention underlying it. The Court explained that one who signs a contract is presumed to know its contents, especially if he caused its preparation.

Legal Basis and Reasoning — Simulation and Consideration

Addressing the CA’s finding of simulation under Articles 1345 and 1346 of the Civil Code, the Court explained the difference between absolute simulation and relative simulation and observed that the evidence did not support an absolute simulation. The Court further clarified that failure to pay is not equivalent to lack of consideration under Art. 1318; nonpayment does not render a contract void but affords remedies such as demand for fulfillment or rescission under Art. 1191. The Deed itself expressly recited receipt of PHP 3,130,000 "paid in full" and, absent clear and convincing evidence to the contrary, that attestation sufficed to establish payment.

Damages

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