G.R. No. 105647 - Heirs of Biona vs. Court of Appeals

Case Summary (G.R. No. 105647)

Factual Background

The subject is Lot No. 177 of PLS-285-D, ten hectares, forty-three acres, sixty-eight centares, originally covered by Homestead Patent No. V-840 awarded on October 23, 1953 to the late Ernesto Biona, who received Original Certificate of Title No. (V-2323) P-3831. Ernesto and his wife Soledad obtained a loan from the Rehabilitation Finance Corporation on June 3, 1954 and mortgaged the property. Ernesto died on June 12, 1956, leaving his wife Soledad and five daughters as heirs. On March 1, 1960, Soledad obtained a P1,000.00 loan from private respondent, who took possession and enjoyed the usufruct for an agreed two-year period that was not complied with. Private respondent alleged that on September 11, 1961 Soledad sold the entire lot to him for P4,500.00, that he paid P3,500.00 as partial payment and earlier had delivered P1,000.00 pursuant to a mutual agreement, and that he redeemed the prior mortgage on July 3, 1962 by paying P1,400.00 to the Development Bank of the Philippines. Thereafter private respondent occupied, declared the land in his name for taxation, paid real property taxes, tenanted the land and cultivated it continuously for over twenty-five years without protest from the heirs.

Trial Court Proceedings

Plaintiffs-appellees filed a complaint for recovery of ownership, possession, accounting and damages on June 19, 1985, praying for injunctive relief and monetary damages. Defendant-appellant filed an answer with counterclaim asserting a valid sale, possession as owner, and claims for damages and attorney’s fees. At trial petitioners presented testimony and documentary exhibits A to G; private respondent presented his testimony, that of Mamerto Famular, and exhibits 1 to 13 and others. On January 31, 1990 the RTC rendered judgment ordering defendant to vacate possession and deliver six-tenths of the lot to Soledad upon her payment of P1,000.00 to redeem a mortgage, and to deliver the remaining four-tenths to the co-plaintiff children; the RTC ordered an accounting of net produce and delivery of twenty-five percent of such produce to the co-plaintiffs, awarded costs, and dismissed defendant’s counterclaim for lack of merit.

Court of Appeals Decision

The Court of Appeals reversed the RTC on March 31, 1992 and dismissed the complaint, ordering the plaintiffs-appellees to execute a registrable deed of conveyance in favor of private respondent within ten days from the finality of its decision, with costs against the plaintiffs. The Court of Appeals found that the handwritten unnotarized deed of sale (Exh. 2) and the acknowledgment receipt for P3,500.00 (Exh. 3) were genuine and established that the contract of sale was consummated by delivery and long possession. The appellate court applied Sec. 22, Rule 132 in comparing signatures, observed substantial similarity between signatures on admitted and disputed documents, and held that non-notarization did not render the deed void because Article 1358’s requirement of a public document is for evidentiary efficacy rather than validity. The appellate court further applied the doctrine of laches and held that the petitioners’ long silence and failure to assert rights for over twenty-five years prejudiced private respondent.

Issues on Review

The petition raised four assignments of error in the Supreme Court: (1) that the Court of Appeals erred in concluding the signature of Soledad Estrobillo on the deed of sale (Exh. 2) was genuine; (2) that the Court of Appeals erred in holding the deed of sale (Exh. 2) valid and capable of conveying title; (3) that the Court of Appeals erred in applying the equitable principle of laches to bar petitioners’ right to recover the property; and (4) that the Court of Appeals erred in not holding that private respondent’s right of action under the deed had prescribed.

Supreme Court's Resolution

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The Court agreed that private respondent substantially proved the due execution of the deed of sale by direct testimony that he saw Soledad affix her signature and by corroboration from Mamerto Famular. The Court found that the burden shifted to petitioners to prove the contrary, which they failed to do because Soledad did not testify or offer a deposition to deny her signatures. The Court accepted the Court of Appeals’ comparison of signatures under Sec. 22, Rule 132 and concluded that signatures on the admitted document corresponded with those on the disputed deed and receipt. The Supreme Court held that all essential requisites of a contract of sale were present, that the agreement for P4,500.00 was valid and binding between the parties, and that non-notarization did not render the contract void. The Court affirmed that under Article 1358 the public document requirement is for convenience and efficacy and that a party may be compelled under Article 1357 to execute a public document embodying the contract for registration. Finally, the Court upheld the application of laches, finding that the heirs unreasonably delayed asserting their rights while private respondent cultivated, paid taxes and enjoyed dominion for decades, and that their inaction prejudiced the vendee.

Legal Basis and Reasoning

On evidentiary matters the Court relied on the principle in Sec. 22, Rule 132 that handwriting evidence may be proved by comparison with writings admitted or treated as genuine by the party against whom it is offered. The Supreme Court credited private respondent’s testimony and corroboration and observed substantial similarity between signatures on Exh. 1 (admitted document), Exh. 2 (deed of sale) and Exh. 3 (acknowledgment receipt), as well as similarity with the signature on the special power of attorney (Exh. A). On form and validity the Court applied Article 1356 and Article 1358, holding that contracts are obligatory in whatever form entered into provided essential requisites exist and that the requirement of a public document under Article 1358 relates to efficacy for third persons and registrability rather than to intrinsic validity between contracting parties. The Court cited and relied on controlling authorities discussed by the Court of Appeals, including Carbonell v. Court of Appeals, Elumbaring v. Elumbaring, Clarin v. Rulona, Heirs of Ampa

Case Syllabus (G.R. No. 105647)

Parties and Procedural Posture

Petitioners are the Heirs of Ernesto Biona, namely: Editha B. Blancaflor, Marianita D. De Jesus, Vilma B. Blancaflor, Elsie B. Ramos and Perlita B. Carmen, who sought review under Rule 45 of the Decision of the Court of Appeals and the resolution denying a motion for reconsideration.
Respondent is Leopoldo Hilajos, who was appellee below and claimed ownership of the subject parcel by virtue of a purported deed of sale.
The action began in the Regional Trial Court, 11th Judicial Region, Branch 26, Surallah, South Cotabato, where plaintiffs filed for recovery of ownership, possession, accounting and damages against the private respondent.
The Regional Trial Court rendered judgment ordering partial restoration of possession and accounting, which the Court of Appeals reversed in a Decision dated March 31, 1992, and the present appeal followed to the Supreme Court.

Key Factual Allegations

On October 23, 1953, the late Ernesto Biona, married to Soledad Biona, was awarded Homestead Patent No. V-840 over Lot 177 of PLS-285-D containing ten (10) hectares, forty-three (43) acres and sixty-eight (68) centares, with Original Certificate of Title No. (V-2323) P-3831 issued in his name.
On June 3, 1954, the Biona spouses obtained a loan from the Rehabilitation Finance Corporation secured by the subject property, and Ernesto Biona died on June 12, 1956, leaving Soledad Biona and five daughters as heirs.
On March 1, 1960, Soledad Biona obtained a loan from Leopoldo Hilajos, mortgaged the property, and agreed that Hilajos would occupy the land and enjoy the usufruct for two years as security for the debt.
Hilajos continued in possession after the two-year period expired without payment, paid P1,400.00 to the Development Bank of the Philippines on July 3, 1962 to cancel the prior mortgage, occupied and cultivated the land for not less than twenty-five years, declared it in his name for taxation, paid real estate taxes, and caused the land to be tenanted.
On June 19, 1985, the petitioners filed the complaint alleging unlawful deprivation and seeking recovery, accounting and damages, while Hilajos answered and counterclaimed asserting that on September 11, 1961 he purchased the whole of Lot 177 from Soledad Biona for the alleged consideration of P4,300.00 and produced a handwritten deed of sale and an acknowledgment receipt as evidence of payment.

Issues Presented

Whether the Court of Appeals erred in concluding that the signature of Soledad Estrobillo on the deed of sale (Exh. 2) is genuine.
Whether the Court of Appeals erred in holding that the deed of sale (Exh. 2) is valid and could legally convey ownership and title over the subject property.
Whether the Court of Appeals erred in holding that the petitioners had lost their right to recover the subject property by virtue of the equitable principle of laches.
Whether the Court of Appeals erred in not holding that respondent’s right of action under the deed of sale had prescribed.

Evidence and Trial Findings

Plaintiffs offered the testimonies of Editha Biona Blancaflor and Vilma Biona Blancaflor and documentary exhibits A to G, while Hilajos testified and presented witness Mamerto Famular together with documentary exhibits 1 to 13 and others.
The trial court found that the signature of Soledad Biona on the deed of sale was not proven genuine, noted the deed was unnotarized, and held that plaintiffs’ rights had not prescribed.
The Court of Appeals accepted Hilajos’ testimony that he saw Sol