G.R. No. 199766 - Sepe vs. Heirs of Kilang

Case Summary (G.R. No. 199766)

Factual Background

Anastacia, described as elderly, illiterate and bedridden, purportedly executed a notarized Deed of Sale dated November 18, 1992 conveying the subject lot to spouses Sepe for P15,000, with acknowledgment of receipt. On December 14, 1992 she executed a notarized Notice of Adverse Claim asserting the parcel was never sold and alleging a duplicate TCT had been found in Generoso Sepe’s possession. On December 17, 1992 four of Anastacia’s children (Maria, Donata, Feliciana and Severo) executed a notarized Confirmation of Sale for P40,000, acknowledging and warranting the sale. On January 14, 1993 Anastacia executed a notarized Notice of Withdrawal of Adverse Claim stating she had already sold the land on November 18, 1992 and the Adverse Claim was an error; that same day TCT T-35367 was issued in spouses Sepe’s names. Anastacia died October 20, 1993.

Procedural History and Relief Sought

Respondents initially filed a case for nullification on December 21, 1998 (dismissed Feb. 26, 2002 for failure to prosecute) and refiled on May 16, 2002 seeking annulment of the DOS, nullification of the COS (except Dominga’s non-signature), cancellation of TCT T-35367 and recovery of possession and damages. Petitioner moved a demurrer to evidence (July 13, 2006) on grounds of ratification and prescription. The RTC granted the demurrer and dismissed the complaint (Aug. 7, 2006); motion for reconsideration was denied (Sept. 14, 2006). The Court of Appeals reversed and rendered judgment nullifying the DOS and cancelling TCT T-35367, reinstating TCT T-10069, and awarding moral, exemplary damages and attorney’s fees (Aug. 4, 2010); its denial of reconsideration followed (Oct. 27, 2011). Petitioner filed a Rule 45 petition to the Supreme Court, which reversed the CA and reinstated the RTC orders (Apr. 10, 2019).

Issues Raised on Review

The principal issues presented were: (1) whether the CA erred in concluding there was no consideration for the sale; (2) whether the CA erred in interpreting the haste of the Adverse Claim as proof that no sale occurred; (3) whether the CA erred in finding the withdrawal of the Adverse Claim was procured by petitioner rather than executed by Anastacia; (4) whether the CA erred in finding petitioner took advantage of Anastacia and her children by misrepresenting the DOS as a subdivision/partition instrument; and (5) whether the CA erred in reasoning that a valid purchaser would not have procured the COS.

Trial Court Findings and Rationale

The RTC found respondents’ oral claims inadequate and unworthy of belief in the face of notarized documentary evidence favoring petitioner, applying the presumption of regularity accorded public instruments. The RTC noted that if the DOS were spurious and led to the Adverse Claim on December 14, 1992, it was unexplained why four children executed the COS three days later accepting P40,000; it observed an implied admission in an NBI interview and that Anastacia later withdrew the Adverse Claim, resulting in issuance of TCT T-35367. The RTC also addressed prescription, finding the action to annul the sale time-barred from the date of discovery of the purported fraud (December 14, 1992). On those bases the RTC granted petitioner’s demurrer to evidence and dismissed the case with costs and attorney’s fees.

Court of Appeals Findings and Rationale

The CA reversed the RTC, concluding respondents proved no consideration was actually paid and that the DOS was a false contract. It relied primarily on the testimony of Anastacia’s daughters that no payment was made and on its view that the Notice of Withdrawal was not genuinely executed by Anastacia but procured by petitioner. The CA found petitioner acted in bad faith, having taken advantage of Anastacia’s and the heirs’ ignorance by misleading them into treating the instrument as a partition or subdivision. On that finding the CA declared the DOS void, nullified TCT T-35367, reinstated TCT T-10069 in Anastacia’s name, and awarded moral and exemplary damages and attorney’s fees to respondents.

Supreme Court Standard of Review and Exception Applied

The Supreme Court noted that a Rule 45 petition ordinarily raises purely legal questions, but it may re-examine factual findings where appellate court conclusions are contrary to those of the trial court. Because the CA’s findings conflicted with the RTC’s, the Court undertook a re-examination of the evidence and legal standards applicable to notarial/public documents and the presumption of consideration.

Legal Principles on Presumption of Consideration and Public Documents

The Court reiterated the disputable presumption that a contract is supported by consideration (Civil Code, Art. 1354) and the specific disputable presumption under Rule 131 Sec. 3(r) that there was sufficient consideration for a contract. The burden of proving lack of consideration rests on the party alleging it. Notarially acknowledged instruments are public documents under Rule 132 and carry presumptions of regularity and due execution; to contradict facts in a notarial document, the adversary must produce clear, convincing and more than merely preponderant evidence (citing Alcantara-Daus and Spouses Santos). Oral declarations by non-parties that contradict notarial documents must be approached with caution.

Supreme Court’s Factual and Legal Analysis

The Court found the CA erred in concluding lack of consideration. The record contained multiple notarized public documents supporting the sale and receipt of consideration: the DOS explicitly acknowledging receipt of P15,000; the notarized Notice of Withdrawal of Adverse Claim

Case Syllabus (G.R. No. 199766)

Case Caption and Procedural Posture

Supreme Court Second Division, G.R. No. 199766, Decision dated April 10, 2019; penned by Associate Justice Eduardo P. Caguioa, with Carpio (Chairperson), J. Reyes, Jr., and Lazaro-Javier, JJ. concurring; Perlas-Bernabe, J., on leave.
Petition for Review on Certiorari under Rule 45 of the Rules of Court by Generoso Sepe (petitioner) assailing:
- Court of Appeals Decision dated August 4, 2010 in C.A.-G.R. C.V. No. 01786, which granted respondents’ appeal and nullified the Deed of Sale and TCT issued to petitioner;
- Court of Appeals Resolution dated October 27, 2011 denying petitioner’s motion for reconsideration.
Lower court orders under review:
- Regional Trial Court (RTC), Branch 3, City of Tagbilaran, Orders dated August 7, 2006 (granting demurrer to evidence and dismissing case) and September 14, 2006 (denying motion for reconsideration), in Civil Case No. 6703.
Outcome at the Supreme Court level:
- Petition granted; CA Decision and Resolution reversed and set aside; RTC Orders reinstated and affirmed.

Relevant Dates and Chronology

November 18, 1992: Deed of Sale of a Registered Land (DOS) executed by Anastacia Kilang with marital consent of Fabian Solijon in favor of spouses Generoso and Gaudencia Sepe for P15,000.00.
December 14, 1992: Anastacia executed a notarized Notice of Adverse Claim alleging loss of duplicate TCT and that parcel was "never sold nor encumbered to anybody else."
December 17, 1992: Confirmation of Sale (COS) executed by respondents, except Dominga, for P40,000.00 confirming sale to spouses Sepe.
January 14, 1993: Anastacia executed a notarized Notice of Withdrawal of Adverse Claim; same day TCT T-10069 in Anastacia’s name was cancelled and TCT T-35367 issued in spouses Sepe’s names.
October 20, 1993: Death of Anastacia Kilang.
November 17, 1998: Maria wrote to the NBI seeking assistance; statements taken by NBI investigator on August 30, 2000.
December 21, 1998: Respondents, represented by Maria, filed Civil Case No. 6703 for nullification (first filing), later dismissed without prejudice on February 26, 2002 due to failure to prosecute.
May 16, 2002: Respondents refiled the complaint (Complaint dated March 25, 2002) — Civil Case No. 6703 (refiled).
July 13, 2006: Petitioner filed Demurrer to Evidence before RTC, raising ratification and prescription.
August 7, 2006: RTC granted demurrer to evidence; dismissed the case.
September 14, 2006: RTC denied respondents’ motion for reconsideration.
CA Decision August 4, 2010: Reversed RTC, declared DOS null and void, canceled TCT T-35367, reinstated TCT T-10069, awarded damages and attorney’s fees.
CA Resolution October 27, 2011: Denied petitioner’s motion for reconsideration.
April 10, 2019: Supreme Court Decision reversing CA and reinstating RTC Orders.

Parties and Representation

Petitioner: Generoso Sepe (also named as spouse in deed and owner on TCT T-35367).
Respondents: Heirs of Anastacia Kilang, represented by her children Maria, Donata, Feliciana, Dominga and Severo Solijon (respondents).
Anastacia Kilang: Deceased alleged vendor; described in complaint as then 84 years old, illiterate, rheumatic and bedridden.
Marital consent to sale by Fabian Solijon noted in DOS.

Facts Alleged by Respondents (Plaintiffs)

Respondents sought nullification of:
- Deed of Sale dated November 18, 1992 (DOS) executed by Anastacia with marital consent of Fabian in favor of spouses Sepe;
- Confirmation of Sale dated December 17, 1992 (COS) executed by respondents, except Dominga;
- Transfer Certificate of Title No. T-35367 registered in spouses Sepe’s names.
Respondents alleged:
- Anastacia agreed to petitioner’s offer to undertake subdivision of her land under TCT T-10069 in exchange for one lot in the subdivision and first preference to buy portions; this was the true agreement.
- Petitioner took advantage of the family’s ignorance and misled Feliciana and Donata into believing the DOS was an instrument of subdivision, thereby obtaining signatures and the DOS.
- Anastacia executed the DOS under circumstances amounting to fraud or lack of true consent; no actual consideration was paid to Anastacia.
- On December 14, 1992 Anastacia executed a Notice of Adverse Claim asserting the parcel was never sold; later she executed a Notice of Withdrawal of Adverse Claim on January 14, 1993 stating she had sold the land on November 18, 1992 and that the Adverse Claim was an error.
- Respondents filed suit for nullification and recovery of title and possession with damages.

Documentary Evidence Introduced in Trial

Deed of Sale of a Registered Land (DOS), notarized November 18, 1992, stating consideration of P15,000.00 paid to Anastacia by spouses Generoso and Gaudencia Sepe, with receipt acknowledged.
Notice of Adverse Claim, notarized December 14, 1992, in which Anastacia claimed TCT duplicate was found in Generoso Sepe's possession and that parcel was never sold.
Confirmation of Sale (COS), notarized December 17, 1992, executed by four of Anastacia’s children (Maria, Donata, Feliciana, Severo) for consideration of P40,000.00, confirming sale to spouses Sepe and waiving rights.
Notice of Withdrawal of Adverse Claim, notarized January 14, 1993, wherein Anastacia stated she remembered already selling the land to spouses Sepe on November 18, 1992 and wanted the Adverse Claim withdrawn.
Transfer Certificate of Title (TCT) T-10069 in the name of Anastacia and TCT T-35367 issued in the names of spouses Sepe (issued January 14, 1993).
Community Tax Certificate No. 9863767 (signature comparison evidence referenced).
NBI document examination reports and signature comparisons, including findings by Rhoda B. Flores, NBI Document Examiner IV and Assistant Chief, Questioned Documents Section, confirming that signatures of Generoso Sepe on the Notice of Withdrawal of Adverse Claim and the community tax certificate were written by the same Generoso Sepe whose signature appeared on standard documents.

Witnesses and Testimonies Presented by Respondents

Feliciana Solijon (then 65 years old) — testified for respondents.
Maria Solijon (then 63 years old) — testified; earlier submitted a letter to NBI and gave statements.
Julieta Solijon (wife of Severo) — testified for respondents.
Eufronio Tanupan Bayot — supply officer of Tagbilaran City Treasurer’s Office — testified regarding records.
Remedios Lamoste — Records Officer I, Office of the Tagbilaran City Register of Deeds — testified and brought records relative to TCT T-10069, including TCT, DOS, Notice of Adverse Claim, Notice of Withdrawal of Adverse Claim and TCT T-35367.
Rhoda B. Flores — NBI Document Examiner IV and Assistant Chief, Questioned Documents Section, NBI, Manila — testified that signatures matched those of Generoso Sepe on certain documents.

Petitioner’s Procedural Tactic and Arguments at Trial

Petitioner’s counsel opted to file a demurrer to evidence after respondents presented documentary evidence and testimonies.
Demurrer to Evidence (filed July 13, 2006) asserted grounds of ratification and prescription:
- Argument that if the DOS was voidable and respondents’ testimony suggested they were mistaken or thought the DOS pertained to subdivision, the action to nullify a voidable contract had prescribed — prescriptive period of four years, reckoned from January 14, 1993 when TCT was issued in petitioner’s name.
- Argument that the execution of the COS by respondents constituted ratification of the sale, thus barring their action.
Petitioner maintained that the DOS, being duly notarized and stating P15,000.00 as consideration, and the subsequent issuance of TCT T-35367 supported the legitimacy of the sale and the payment of consideration.
Petitioner relied on disputable presumptions of existence and legality of consideration (Article 1354, Civil Code) and presumption of regularity afforded to notarial/public documents (Rule 132), arguing respondents failed to produce clear and convincing evidence to over