G.R. No. 256633 - Grand Planters International, Inc. vs. Maine City Property Holdings Corp.

Case Summary (G.R. No. 256633)

Factual Background

The disputed property is a 369,463-square meter parcel in Limay, Bataan, originally registered under OCT No. 16 in the name of Leonardo Serios. MCPHC alleged that the Heirs of Leonardo sold the property to MCPHC for PHP 35,000,000 and turned over the owner’s duplicate copy of OCT No. 16 to Yap. The Heirs of Leonardo countered that their agreement with MCPHC was a contract to sell and not a consummated contract of sale, that they turned over the owner’s duplicate title after receiving partial payments and while signing blank documents, and that respondents later failed to pay the balance. The Heirs of Leonardo executed an Extrajudicial Settlement of Estate with Sale dated July 28, 2014, sold to Arlene Bernardo for PHP 5,000,000, and Leonarda executed an Affidavit of Loss on November 4, 2014. Per subsequent proceedings, a second owner’s copy of the title was issued and TCT No. 038-2015000040 was registered in Bernardo’s name; Bernardo later sold to GPII by Deed of Absolute Sale dated September 24, 2015 for PHP 110,982,900, and TCT No. 038-2016000719 issued in GPII’s name.

Trial Court Proceedings

MCPHC and Yap filed Civil Case No. 1141-ML seeking nullification of the 2014 Extrajudicial Settlement with Sale and the 2015 Deed of Sale, affirmation of the 2006 Deed of Sale in their favor, cancellation of Bernardo’s TCT No. 038-2015000040 and GPII’s TCT No. 038-2016000719, reinstatement of OCT No. 16, and attorney’s fees. The parties stipulated certain facts during pre-trial, including the existence of the 2006 Deed of Sale between MCPHC and the Heirs of Leonardo, the authenticity of signatures on that deed (qualified as signed in blank), the due execution and authenticity of OCT No. 16 and its transfer, and that the Heirs of Leonardo turned over the original title to Yap. MCPHC and Yap moved the trial court for summary judgment on the basis that, given the stipulations and documentary evidence, no genuine issue of material fact remained.

Parties’ Contentions on Summary Judgment

Petitioner GPII opposed summary judgment, asserting that it had pleaded the affirmative defense of being an innocent purchaser for value and that good faith is a factual state of mind requiring presentation of evidence. GPII argued that the stipulations did not obliterate the factual issues material to its defense and that Rule 35 and Rule 34 could not supplant a full trial on disputed factual issues. Respondents contended that the stipulations together with documentary evidence established that the 2006 Deed of Sale existed, that the original owner’s copy of OCT No. 16 was turned over to Yap, and that the affidavit of loss was annotated on OCT No. 16; respondents argued that these facts precluded a finding that Bernardo and GPII were innocent purchasers for value and justified summary disposition.

Trial Court Disposition

By Order dated May 31, 2018, the trial court granted the Omnibus Motion to Render Judgment on the Pleadings and/or to Render Summary Judgment, finding no genuine issue of material fact in light of the pre-trial stipulations and admissions. The court thereafter rendered a summary judgment by Decision dated November 23, 2018. The trial court declared null and void the Extrajudicial Settlement of Estate dated July 28, 2014 and the sales to Bernardo and to GPII, declared the 2006 Deed of Sale valid, directed cancellation of Bernardo’s and GPII’s TCTs, reinstated OCT No. 16, and denied plaintiffs’ prayer for damages for lack of evidence.

Court of Appeals Ruling

The Court of Appeals, in its Decision dated September 25, 2020, affirmed the trial court’s summary judgment. The appellate court emphasized the Heirs of Leonardo’s admission at pre-trial of the existence and genuineness of the 2006 Deed of Sale and their admitted delivery of the original owner’s duplicate copy of OCT No. 16 to Yap. The Court of Appeals relied on the notarial character of the 2006 Deed of Sale, noting that a notarized document enjoys the presumption of regularity and is prima facie evidence of the facts stated therein, and held that the Heirs of Leonardo did not present evidence sufficient to overcome that presumption. The Court of Appeals therefore sustained the trial court’s conclusion that no genuine issue remained for trial.

Issues Presented to the Supreme Court

GPII sought review under Rule 45, contending that the trial court and the Court of Appeals erred in granting summary judgment because genuine issues of material fact persisted. The principal issues included whether the pre-trial stipulations and documentary record eliminated the factual disputes on (a) whether the 2006 instrument was a contract of sale or a contract to sell, (b) whether the purchase price was fully paid, (c) whether the issuance of the second owner’s copy of OCT No. 16 was procured by fraud, and (d) whether GPII and Bernardo were innocent purchasers for value who had notice of any prior conveyance or irregularity.

Supreme Court’s Legal Analysis and Reasoning

The Supreme Court reviewed the standards for summary judgment under Rule 35, Rules of Court, reiterating the twin requisites that there be no genuine issue as to any material fact and that the moving party be entitled to judgment as a matter of law. The Court emphasized that a "genuine issue" is an issue of fact requiring the presentation of evidence and that summary judgment is proper only where issues are patently devoid of substance. The Court held that the stipulations and documents before the trial court did not resolve the core factual disputes. The Court explained that the Heirs of Leonardo’s contention that the June 2006 transaction was a contract to sell rather than an absolute sale, the contested question of whether full payment was made, the alleged fraudulent procurement of a second owner’s copy of OCT No. 16, and the separate factual inquiry into the good faith of Bernardo and GPII were all issues that required evidentiary development. The Court observed that the presumption of regularity attaching to a notarized instrument is rebuttable and that the Heirs of Leonardo, Be

Case Syllabus (G.R. No. 256633)

Parties and Procedural Posture

Grand Planters International, Inc. (GPII) filed a petition for review on certiorari under Rule 45 challenging the Court of Appeals' affirmance of a summary judgment in favor of Maine City Property Holdings Corp. (MCPHC) and Joel G. Yap (Yap).
MCPHC and Yap were plaintiffs in Civil Case No. 1141-ML before RTC-Branch 94, Mariveles, Bataan, seeking nullification of subsequent transfers and reinstatement of OCT No. 16.
The trial court granted plaintiffs' Omnibus Motion to Render Judgment on the Pleadings and/or to Render Summary Judgment and thereafter entered a summary judgment declaring the 2014 and 2015 transfers null and void and reinstating OCT No. 16.
The Court of Appeals affirmed the trial court's summary judgment per Decision dated September 25, 2020 and denied reconsideration per Resolution dated May 28, 2021.
The Supreme Court, through the instant decision, granted the petition, reversed the Court of Appeals' Decision and Resolution, and remanded Civil Case No. 1141-ML to the trial court for a full-dress hearing.

Key Factual Allegations

The subject property was originally registered under OCT No. 16 in the name of Leonardo Serios (Leonardo) and comprised a 369,463-square meter parcel in Limay, Bataan.
MCPHC alleged purchase of the property from the Heirs of Leonardo for P35,000,000 and asserted that the owner's duplicate of OCT No. 16 was turned over to Yap after contract-signing.
The Heirs of Leonardo subsequently executed an Affidavit of Loss declaring the owner's copy of OCT No. 16 missing and executed an Extrajudicial Settlement of Estate with Sale dated July 28, 2014 in favor of Arlene Bernardo for P5,000,000 whereupon TCT No. 038-2015000040 was issued to Bernardo.
Bernardo sold the property to GPII by Deed of Absolute Sale dated September 24, 2015 for P110,982,900, resulting in issuance of TCT No. 038-2016000719 in favor of GPII.
MCPHC and Yap alleged the owner's copy of OCT No. 16 was never lost and that the 2014 and 2015 transactions were part of a conspiracy to deprive them of title.

Pleadings and Stipulations

The parties stipulated at pre-trial to the existence of the Deed of Sale dated February 16, 2006 between MCPHC and the Heirs of Leonardo, the authenticity of signatures thereon (with qualification that the signatures were made on blank documents), the due execution and authenticity of OCT No. 16, delivery of the original title to Yap, and that the subject property was originally covered by OCT No. 16.
The parties filed and exchanged documentary evidence including OCT No. 16, the 2006 Deed of Absolute Sale, the Affidavit of Loss, the Extrajudicial Settlement of Estate with Sale dated July 28, 2014, TCT No. 038-2015000040, and TCT No. 038-2016000719.
GPII pleaded the affirmative defense of being an innocent purchaser for value and denied knowledge of the alleged 2006 Deed of Sale and the circumstances of the reconstitution of title.
Bernardo pleaded that she was a purchaser in good faith and that she exercised due diligence by checking records with the BIR, Register of Deeds, and local assessors.

Issues Presented

Whether there remained genuine issues of material fact after the parties' stipulations and submitted documents that would preclude summary judgment under Rule 35, Rules of Court.
Whether the 2006 Deed of Sale between MCPHC and the Heirs of Leonardo constituted a valid contract of sale as opposed to a contract to sell.
Whether the Heirs of Leonardo received the full purchase price under the