Title
Mendezona vs. Ozamiz
Case
G.R. No. 143370
Decision Date
Feb 6, 2002
Petitioners claimed ownership of land sold by Carmen Ozamiz, contested by relatives alleging mental incapacity and simulated sale. Supreme Court upheld sale, ruled Ozamiz was of sound mind, and ordered removal of lis pendens.
validity of deed
presumption of regularity
mental incapacity
A

Case Summary (G.R. No. 143370)

Petitioners’ Primary Claims

Petitioners assert ownership of three contiguous parcels covered by TCT Nos. 116834, 116835, and 116836, tracing title to the April 28, 1989 notarized Deed of Absolute Sale for P1,040,000, with reserved usufruct for the vendor. They sought removal of the notice of lis pendens filed in connection with Special Proceeding No. 1250 (guardianship over Carmen Ozamiz) and reinstatement of the trial court's decision quieting title in their favor.

Respondents’ Primary Defenses

Respondents maintained that the sale was defective, illegal, simulated, and/or executed in bad faith and without value. They alleged (a) that the consideration was not actually paid, making the deed simulated; and (b) that Carmen Ozamiz lacked mental capacity at the time of the sale because of physical and cognitive decline beginning in 1987, rendering the deed voidable or void.

Key Dates and Procedural Posture

  • Deed of Absolute Sale: April 28, 1989.
  • Guardianship petition (Spec. Proc. No. 1250, RTC Oroquieta): filed January 15, 1991; inventories filed August 6, 1991; notice of lis pendens filed August 13, 1991.
  • Quieting of title filed in RTC Cebu City (Civil Case No. CEB-10766): September–October 1991.
  • Trial court decision in favor of petitioners: September 23, 1992.
  • Court of Appeals reversed: July 27, 1998; motion for reconsideration and new trial denied May 19, 2000.
  • Supreme Court decision: February 6, 2002. Applicable constitutional framework: 1987 Philippine Constitution.

Applicable Legal Principles Emphasized by the Courts

  • Presumption of regularity and due execution for notarized documents, which are entitled to evidentiary weight and presumed to be valid unless rebutted by clear, convincing, and satisfactory evidence.
  • Burden of proof rule: those who allege fraud, simulation, or lack of consideration in a notarized instrument must prove it by clear and convincing evidence.
  • Standards for newly discovered evidence to justify a new trial: (a) discovered after trial; (b) could not have been discovered earlier with reasonable diligence; and (c) material and likely to alter the result.
  • Legal standard for mental incapacity: age or infirmity alone does not establish incapacity to contract; incapacity exists only if mental faculties are impaired to the extent that the person cannot intelligently and fairly protect property rights.

Facts Found by the Trial Court

The RTC found: (1) the April 28, 1989 sale to the nephews (Mario, Antonio, Luis Mendezona) of three parcels, reserving usufruct to Carmen Ozamiz, for P1,040,000; (2) transfer of titles and subsequent partition resulting in the petitioners holding the subject TCTs; (3) annotation on titles acknowledging reservation of usufruct; (4) payment of capital gains tax and BIR certification authorizing transfer; (5) guardianship petition and listing of the Lahug property in the inventories filed by the joint guardians, and filing of a notice of lis pendens; and (6) existence of powers of attorney granted by Carmen Ozamiz to family members both before and after the sale relating to the property’s administration.

Trial Evidence and Witnesses

Petitioners produced the vendees and instrumental witnesses (two named witnesses) and the notary public who attested that Carmen executed the deed knowingly and voluntarily. Respondents presented several witnesses including family members, household staff, a part-time bookkeeper, an appraiser, and a physician (Dr. Faith Go), who testified about decline in Carmen’s mental and physical condition. Petitioners offered a neurologist (Dr. William Buot) in rebuttal and attempted to introduce documentary evidence (three checks) to prove payment.

Court of Appeals’ Ruling and Rationale

The Court of Appeals reversed the RTC, concluding the April 28, 1989 Deed of Absolute Sale was simulated because petitioners did not prove payment of the consideration (checks not produced) and because respondents established, in the appellate court’s view, that Carmen’s mental faculties were seriously impaired by the date of the sale. The CA ordered cancellation of the titles in petitioners’ names and reissuance in favor of Carmen or her estate.

Supreme Court’s Review: Motion for New Trial and “Newly Discovered Evidence”

The Supreme Court examined petitioners’ contention that Judge Teodorico Durias’ testimony (from the guardianship proceeding) was newly discovered evidence establishing Carmen’s soundness of mind shortly before the sale. Applying the three-pronged test for newly discovered evidence, the Court found lack of reasonable diligence: Durias’ testimony existed and was discoverable before or during the trial, and petitioners failed to show they could not have secured it with due diligence. Therefore, the testimony did not meet the criteria to warrant a new trial.

Supreme Court’s Analysis: Whether the Deed Was a Simulated Contract and Burden of Proof

The Court reiterated the statutory presumption in favor of notarized instruments: a notarized Deed of Absolute Sale is presumed regularly executed and its contents, including acknowledgment of receipt of consideration, carry evidentiary weight. The Court emphasized that the burden of proving simulation or nonpayment rests on the party attacking the deed and must be met with clear and convincing evidence. The Supreme Court held that the CA erred in treating the absence of produced checks as dispositive of simulation; the deed itself expressly acknowledged receipt of P1,040,000 and the petitioners had documentary indicia (TCTs, tax receipts, BIR certification) supporting regular transfer. The Court found the CA improperly favored inconsistent oral testimony of household staff and bookkeepers over the notarized deed.

Supreme Court’s Analysis: Mental Capacity of the Vendor

On capacity, the Supreme Court observed that respondents’ witnesses gave sweeping, inconsistent, and insufficiently probative testimony to prove that Carmen lacked mental capacity on April 28, 1989. The Court noted that episodic forgetfulness or physical infirmity, as evidenced by Dr. Faith Go’s notes, did not equate to legal incapacity; the neurologist’s rebuttal undermined the contention that clinical notes established incapacity on the precise date of the sale. The Court also underscored that several other documents signed by Carmen before and after April 28, 1989 were not assailed and tended to show competence in managing affairs, supporting the presumption of continued capacity. Consequently, respondents failed to rebut the presumption that Carmen was of sound mind when she execut

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