Case Summary (G.R. No. 76728)
Applicable Law and Procedural History
The case was adjudicated under the 1987 Philippine Constitution, which mandates respect for due process and property rights. It fundamentally concerns the notarization and authenticity of deeds of conveyance under Philippine civil and evidentiary law, the Rules of Court (specifically Rule 132 on evidence), and statutory provisions on proper document acknowledgment.
Background and Factual Stipulations
- The petitioners purchased the land from Canlubang Sugar Estate (CSE) in 1980, evidenced by a properly notarized deed of sale.
- The land’s title was subsequently cancelled, and a new title was issued in favor of respondents based on a notarized deed of sale dated 1985.
- Oscar Papa was formerly the Assistant Vice-President and Head of Marketing of Laguna Estate Development Corporation (LEDC), a marketing arm connected to CSE.
- Both parties stipulated to various facts, including petitioners’ original ownership, the issuance of the second title to respondents, Papa’s position at LEDC, and the nature of LEDC’s business.
Trial Court Findings
The Regional Trial Court (RTC) of Calamba found overwhelming evidence that the petitioners’ signatures on the 1985 deed of sale were forged. Key points included:
- The testimony of respondent Papa admitted he did not witness or see petitioners sign the 1985 deed.
- Petitioners continuously paid real property taxes post-transfer, suggesting non-transfer of ownership.
- Respondents failed to prove good faith purchase, given their inability to see vendors’ signatures or establish possession.
- The court rejected arguments based on laches and estoppel, citing applicable laws that protected registered titles from prescription and the indefeasibility of contracts alleged to be nonexistent.
The RTC annulled the deed of sale, cancelled respondents’ title, and reinstated petitioners’ ownership.
Court of Appeals Decision and Legal Basis
The Court of Appeals reversed the RTC decision, upholding the validity of the 1985 deed of sale. It reasoned:
- Petitioners failed to convincingly prove forgery; their evidence was limited to Juan dela Rama’s “self-serving” denial.
- The burden to prove forgery required clear and convincing evidence; mere denial was insufficient.
- The trial court erred in not applying Section 22, Rule 132 of the Rules of Evidence, which prescribes the proper method to prove handwriting authenticity.
- Neither petitioner was confronted with the signatures in the deed to confirm disavowal unequivocally.
- The notarized deed was presumed regularly executed, strengthening respondents’ position.
Supreme Court’s Analysis on Notarization and Evidence
The Supreme Court emphasized the importance of proper notarization for deeds of conveyance involving real property:
- Notarization transforms a document into a public document, thereby raising a presumption of due execution and authenticity.
- The essential aspect of acknowledgment requires the party to personally appear before the notary, acknowledge the document as their free act and deed, and take an oath; mere notarization by signature without personal appearance does not fulfill this requirement.
- Oscar Papa’s admission that he did not sign the deed in the presence of the notary and no testimony from the notary himself effectively negated the presumption of regularity.
- The Court noted that irregular or faulty notarization removes the “public document” status and imposes a lesser standard of proof—the preponderance of evidence rather than clear and convincing evidence.
- The Court rejected respondents’ claims about customary business practices that might justify irregular execution, stating that lawful requirements for acknowledgment cannot be waived for convenience or common industry practices.
Evidentiary Weight of Petitioners’ Testimonies
The Court found that:
- Juan dela Rama’s testimonial denial of signing the 1985 deed was competent and relevant evidence under Section 22, Rule 132.
- The testimony of Oscar Papa as a hostile witness, in which he admitted not seeing petitioners sign, not remembering the transaction details, and acknowledging signing without petitioners’ presence, corroborated petitioners’ claims.
- Continued real property tax payments by petitioners after the purported sale corroborated non-transfer of ownership.
- The combined testimony established a prima facie case of forgery sufficient to shift the burden of proof to respondents.
Respondents’ Failure to Rebut Evidence
Respondents failed to present:
- The alleged witnesses to the deed of sale identified by Papa, Mrs. Galeos and Mrs. Reyes, who were staff responsible for document preparation.
- Atty. William Gumtang, the notary purported to have notarized the deed.
- Any credible evidence to establish the due execution and authenticity of the deed beyond the now-negated legal presumption.
- Any detailed proof of payment or account for the purchase price, relying instead on vague and inconsistent testimony.
This failure critically undermined respondents’ defense.
Legal Standards on Authenticity and Handwriting Proof
The Court reaffirmed relevant jurisprudence that:
- The testimony of the purported writer (owner) of a signature is competent proof of the genuineness or forgery of that signature.
- Sections 22 and 23 of Rule 132 govern proof of handwriting and documentary authenticity with preferences for witnesses familiar with the handwriting and evidence through comparisons.
- Mere denial of the signature’s authenticity by the purported writer cannot be discounted as “self-serving” without contrary evidence.
- The absence of notarization regularity lowers the required standard of proof, assisting petitioners.
Rejection of Good Faith Purchase Argument
The Court ruled that respondents cannot claim the status of purchasers in good faith because:
- Respondent Papa failed to directly communicate with or verify authorization from the petitioners or their lawful representatives.
- He ack
Case Syllabus (G.R. No. 76728)
Facts of the Case
- Juan and Eugenia dela Rama were the registered owners of a parcel of land in Calamba, Laguna, evidenced by Transfer Certificate of Title (TCT) No. 91166, acquired from Canlubang Sugar Estate (CSE) for P96,000.00, as shown in a notarized Absolute Deed of Sale dated July 10, 1980.
- Juan dela Rama became a U.S. resident in 1984 and acquired American citizenship by 1989.
- In 1992, petitioners learned from the assessor’s office that their title was cancelled and a new title, TCT No. 102128, was issued to respondents Oscar and Ameuerfina Papa.
- Respondents acquired the property through a notarized Deed of Absolute Sale dated March 29, 1985, purporting petitioners as vendors and respondents as vendees.
- The 1985 deed bears signatures of both parties, two witnesses (unnamed), and was notarized by Atty. William Gumtang.
- Respondents’ title was issued on June 21, 1985.
- Petitioners filed a complaint for cancellation of the title obtained under a forged deed of sale, denying execution or authorization of the 1985 deed.
- Respondents counterclaimed that the deed was properly executed, barred by laches, that they bought in good faith relying on possession of the owner’s duplicate title, and that any fraud should be directed against the perpetrators.
Issues Presented
- Whether the signatures of petitioners on the 1985 Deed of Absolute Sale were forged.
- Whether the deed of sale was duly notarized and could be considered a public document.
- Whether respondents were purchasers in good faith.
- The propriety of cancellation of the respondents’ title and reinstatement of petitioners’ title.
- The correct standard of evidence to establish forgery or authenticity of the document.
Procedural History
- The Regional Trial Court (RTC), Branch 92 of Calamba, on June 26, 1986, annulled the 1985 deed of sale, canceled respondents’ title, and reinstated petitioners’ title.
- The Court found preponderant evidence pointing to forged signatures and rejected respondents’ good faith claim.
- The Court of Appeals, on September 7, 1999, reversed the RTC, ruling that petitioners failed to establish forgery with clear and convincing evidence.
- Petitioner filed a petition for review before the Supreme Court.
Legal Principles and Rules Applied
- An improperly notarized document is not considered a public document and does not enjoy the presumption of due execution and authenticity.
- Under Public Act No. 2103 and relevant jurisprudence, proper acknowledgment requires that parties appear before the notary public, manifest under oath that they executed the instrument freely.
- Section 19, Rule 132 of the Rules of Court classifies acknowledged documents as public documents; absence of proper notarization converts them into private documents.
- Section 22, Rule 132 requires that genuineness of handwriting be proved by witnesses having knowledge of the handwriting, including the alleged writer himself.
- Burden of proof for forgery lies on the party alleging it and must be by clear, positive, and convincing evidence if the document is public; if private, it is by preponderance of evidence.
- A purchaser in good faith must exercise diligence to ensure the authority of the seller and bona fide transaction.
- Titles to registered land cannot be acquired thru prescription or adverse poss