Case Summary (G.R. No. 205487)
Procedural History
• January 27, 2004: Suzuki files complaint in RTC Branch 213, Mandaluyong City, for specific performance and damages against Kang and Orion.
• June 29, 2009: RTC rules in favor of Suzuki, orders Orion to deliver the titles and awards damages.
• August 23, 2012: Court of Appeals (CA) partially affirms, sustains Suzuki’s ownership but deletes damages.
• January 25, 2013: CA denies Orion’s motion for reconsideration.
• November 12, 2014: Supreme Court resolves the petition for review under Rule 45.
Factual Background
In early August 2003, Suzuki negotiated with Soneja to purchase a condominium unit and parking slot from Kang at an agreed price of ₱2,800,000. On August 5 and 21, 2003, Suzuki paid Kang by checks totaling ₱2,800,000 and executed a Deed of Absolute Sale on August 26, 2003. Suzuki took possession and began renovations but Kang failed to deliver the certificates of title, claiming they were held by Orion’s Perez. Investigation at the Registry of Deeds revealed no active encumbrances except:
• CCT 18186 carried (a) an SRRV‐related annotation requiring Philippine Retirement Authority (PRA) approval for conveyance, and (b) a cancelled Orion mortgage.
• CCT 9118 showed no encumbrance.
Suzuki filed Affidavits of Adverse Claim on September 8 and October 28, 2003, and demanded title delivery, which Orion refused, citing a supposed Dacion en Pago executed February 2, 2003, by Kang in Orion’s favor.
Applicable Law
• 1987 Philippine Constitution (decision date post‐1990)
• New Civil Code: Article 1544 on conflict of double sales
• Rules of Court: Rule 45 (petition for review), Rule 132 on foreign law proof
• Family Code, Article 80 on property relations of spouses
• Implementing Rules of Executive Order 1037 (PRA SRRV restrictions)
Issues Presented
- Validity of the Deed of Absolute Sale under Korean spousal consent requirements.
- Suzuki’s status as a purchaser in good faith and Orion’s due diligence.
- Effect of the PRA annotation on Suzuki’s title.
- Existence and due execution of the alleged Dacion en Pago in Orion’s favor.
Scope of Supreme Court Review
Under Rule 45, the Court generally accepts lower courts’ factual findings but may reexamine manifestly mistaken inferences. Here, factual incongruences warranted limited review.
Spousal Consent and Foreign Law
Real property dispositions are governed by lex loci rei sitae (Philippine law), while conjugal property regimes follow the spouses’ national law. Orion failed to properly plead or prove Korean law on spousal consent as required by Rule 132, Secs. 24–25. In absence of proof, Philippine law presumes foreign law identical to domestic law. The certificate of title’s married status notation is merely descriptive; there was no evidence that the property constituted conjugal or community property under either law.
Validity of the Dacion en Pago
Orion claimed a February 2, 2003 Dacion en Pago for a ₱1,800,000 loan from Kang. The trial court excluded the documentary exhibits for lack of proper identification; Orion failed to tender excluded evidence. Testimonial and documentary inconsistencies underscored:
• No due and demandable obligation existed when the Dacion en Pago was executed (maturity was August 27, 2003).
• Perez’s uncertain testimony on interest, penalties, and collateralization.
• Absence of any mortgage document securing the ₱1,800,000 loan.
• Lack of possession or assertion of ownership by Orion following the alleged sale.
These factors, coupled with badges of fraud (absence of creditor entry into possession), established the spurious nature of the Dacion en Pago.
Presumption of Notarial Regularity
Notarial form raises a presumption of regularity, but it is not conclusive. Clear and convincing evidence may overtu
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Factual Antecedents
- In the first week of August 2003, respondent Shigekane Suzuki, a Japanese national, inquired about Unit No. 536 (CCT No. 18186) and Parking Slot No. 42 (CCT No. 9118) at Cityland Pioneer, Mandaluyong City, allegedly owned by Korean national Yung Sam Kang, an SRRV holder.
- The asking price was ₱3,000,000.00, later reduced to ₱2,800,000.00 after negotiation.
- On August 5, 2003, Suzuki paid a ₱100,000.00 reservation fee by BPI Check No. 83349; on August 21, he paid the ₱2,700,000.00 balance by BPI Check No. 83350.
- A Deed of Absolute Sale was executed on August 26, 2003; Suzuki took possession of the unit and parking slot and began renovations.
- Kang failed to deliver the original titles, claiming they were with Alexander Perez, Orion’s loan officer.
- Suzuki discovered upon inquiry at the Registry of Deeds that CCT No. 9118 bore no encumbrances but remained in Cityland Pioneer’s name, and CCT No. 18186 showed only a PRA-approval annotation and a cancelled Orion mortgage.
- To protect his interest, Suzuki filed two Affidavits of Adverse Claim (September 8 and October 28, 2003) and repeatedly demanded delivery of the titles, which Orion (through Perez) refused.
Procedural History
- January 27, 2004: Suzuki filed for specific performance and damages against Kang and Orion.
- At pre-trial, the parties stipulated that Kang was the registered owner; Orion’s mortgage had been cancelled; the Dacion en Pago was not annotated; and Suzuki had sought title delivery in good faith.
- June 29, 2009: The RTC, Branch 213, Mandaluyong City, ruled for Suzuki as an innocent purchaser for value, ordered Orion to deliver the titles, and awarded moral and exemplary damages, attorney’s fees, litigation expenses, appearance fees, and costs.