Title
Spouses De Vera vs. Catungal
Case
G.R. No. 211687
Decision Date
Feb 10, 2021
Fausta, illiterate, unknowingly signed a deed of sale, later contested as fraudulent. Courts ruled deed null, restoring property to heirs, citing vitiated consent.
fraudulent acquisition of land
deed null and void
illiteracy
A

Case Summary (G.R. No. 211687)

Factual Background

Vicente Catungal owned two parcels of unregistered land in Macabito, Calasiao, Pangasinan. Upon his death on December 1, 1944, he was survived by five children, including Fausta Catungal and Genaro Catungal. On July 23, 1994, Fausta and Genaro executed a Deed of Extrajudicial Settlement Among Heirs with Absolute Sale (the Deed), adjudicating between themselves the two parcels and conveying the properties to Spouses Eugenio de Vera and Rosalia Padilla for P30,000.00. Fausta affixed her thumbmark in lieu of a signature. The instrument was signed in the presence of witnesses Teodoro de Vera and Valentino de Vera, and new tax declarations were thereafter issued in the name of the Spouses De Vera. After the transaction, the Spouses De Vera allowed Fausta to continue residing on the parcels.

Trial Court Proceedings

On July 23, 1997 Fausta filed a complaint for Declaration of Nullity of Documents, Recovery of Ownership, Reconveyance, and Damages, alleging that the Spouses De Vera deceived her into affixing her thumbmark by taking advantage of her old age and illiteracy, and that the Deed was represented to be evidence of indebtedness rather than an absolute sale. The RTC denied the Spouses De Vera’s motion to dismiss and granted a temporary restraining order, later dispensing with a preliminary injunction by agreement. At trial, Fausta testified, by advance testimony, that she was illiterate and never received any amount from the Spouses De Vera. Her daughter Lourdes corroborated that Fausta could not read or write. The defense presented Eugenio and Valentino, who admitted knowledge of Fausta’s illiteracy but maintained that the Deed was valid and properly executed. On July 7, 2009, the RTC dismissed the complaint, finding that Fausta failed to prove by a preponderance of evidence that her thumbmark was procured through deceit, false pretense, or fraudulent misrepresentation, and that the Deed was properly signed and notarized.

Court of Appeals Decision

The Court of Appeals reversed the RTC on September 26, 2013. It held that the presumption of mistake or fraud under CIVIL CODE, Art. 1332 applied because Fausta admitted that she was illiterate at the time of execution and therefore likely did not comprehend the document to which she affixed her thumbmark. The CA found that the Spouses De Vera failed to overcome this presumption because they did not prove that the Deed’s terms were fully explained to Fausta. The CA further ruled that the presumption of due execution of notarized documents was inapplicable where regularity of execution was successfully challenged. The CA declared the Deed null and void, ordered restoration of the parcels to Fausta’s heirs, and awarded attorney’s fees of P30,000 and costs of suit.

Issues on Appeal to the Supreme Court

The Spouses De Vera contested the CA’s reversal on several grounds: that the CA relied on self-serving and contradicted testimony of the now deceased Fausta; that the appellate court improperly shifted the burden of proof to the petitioners; and that the CA disregarded the presumption of genuineness and due execution accorded to a notarized extrajudicial settlement and sale. The heirs defended the CA’s application of Article 1332, emphasizing Fausta’s illiteracy, her lack of accompaniment at execution, the familial relationship between witnesses and the Spouses De Vera, and the absence of testimony from the notary public.

Parties’ Contentions

The Spouses De Vera maintained that Fausta failed to meet the requisite quantum of proof to show fraud or mistake and that the Deed’s notarization established a presumption of regularity and due execution. They argued that it was illogical to invalidate the Deed as to Fausta but uphold it as to Genaro, who co-signed the instrument. The heirs and substituted plaintiffs asserted that the Spouses De Vera exploited Fausta’s illiteracy and advanced age, that the Deed’s contents were not explained to her, and that the CA correctly applied Article 1332 to shift the burden to the Spouses De Vera to prove explanation of the instrument.

Supreme Court’s Ruling

The Court treated the question whether fraud vitiated consent as a factual issue and noted the general rule that it would defer to the CA’s findings, subject to recognized exceptions. Finding the case to fall within the exception where the CA’s findings differed from those of the trial court, the Supreme Court affirmed with modification the CA’s conclusion that Fausta’s consent was vitiated by fraud or mistake. The Court held that Fausta established by preponderant evidence that she was illiterate at the time of execution through her own testimony, corroborated by Lourdes, and by admissions of Eugenio and Valentino. Consequently, the presumption under CIVIL CODE, Art. 1332 operated and the Spouses De Vera bore the burden to show by clear and convincing evidence that the Deed’s terms were fully explained to Fausta. The Spouses De Vera failed to meet that burden. The Court therefore annulled the Deed, ordered restoration of the parcels to the heirs of Fausta and of Genaro, and confirmed the award of attorney’s fees of P30,000.00 and costs of suit. The petition for review on certiorari was denied.

Legal Basis and Reasoning

The Court grounded its decision on the contractual requisites and on the doctrine that consent must be free, voluntary, and made with reasonable understanding as to obligations assumed. It reiterated that consent may be vitiated by mistake, violence, intimidation, undue influence, or fraud, and that a voidable contract remains valid until annulled. The Court explicated the operation of CIVIL CODE, Art. 1332: when one contracting party is unable to read and mistake or fraud is alleged, the person enforcing the contract must show that the terms were fully explained. The Court applied Leonardo v. Court of Appeals and related authorities to require the party seeking to enforce the document to rebut the presumption of fraud or mistake by clear and convincing evidence that explanation occurred. The Court found such rebuttal absent on the record, and it emphasized that the presumption of regularity attaching to notarized documents yields when the regularity of execution is successfully challenged. The Court relied on the testimony excerpts in the record wherein Fausta denied any exp

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