Case Summary (G.R. No. 219071)
Procedural History
The Malance heirs lodged a complaint before the RTC for recovery of possession and nullity of the Kasulatan. The RTC dismissed the complaint for lack of proof of forgery and confirmed the antichresis contract. The CA affirmed the RTC, but calculated that only P218,106.84 had been received by Benjamin for expenses, resulting in an outstanding balance of P4,320.84 to be settled before turnover of possession. A motion for reconsideration was denied, prompting the certiorari petition.
Issues Presented
- Whether the Court of Appeals erred in limiting Benjamin’s actual proceeds from the P600,000 loan to only P218,106.84.
- Whether legal interest accrues despite the absence of an express stipulation.
Supreme Court’s Analysis on Notarization and Authenticity
Notarized documents carry a presumption of regularity, but this applies only when the notarization is compliant with the Rules on Notarial Practice. The Kasulatan lacked proper identification under Section 12, Rule II of the 2004 Rules on Notarial Practice. Nevertheless, the petitioners met the preponderance standard by presenting Atty. Cenon Navarro’s testimony that he recognized Benjamin from an official Senior Citizen ID and witnessed the execution and money exchange. The heirs’ unsupported allegation of forgery was insufficient to overcome this proof.
Validation of the Antichresis Contract
Under Article 2132 of the Civil Code, antichresis grants the creditor possession of the debtor’s immovable property and the right to apply its fruits to interest and principal. The Kasulatan explicitly authorized petitioners to collect and apply the harvest toward the P600,000 obligation for six years, extinguishing the contract upon full payment. No interest was stipulated; hence none accrues.
Computation of Outstanding Balance
The land yields 107 cavans of palay annually at P600 per cavan (gross P64,200; net P32,100 after expenses). From June 2006 to August 2016 (10.1667 years), the net income applied totals P326,351.07. De
Case Syllabus (G.R. No. 219071)
Facts
- Benjamin Malance owned a 1.4017-hectare parcel of agricultural land (Emancipation Patent No. 615124) in Dulong Malabon, Pulilan, Bulacan.
- On June 26, 2006, Benjamin obtained a P600,000.00 loan from Charito M. Reyes and Vilma M. Maravillo (the Magtalas sisters), evidenced by a notarized Kasulatan ng Ukol sa Utang.
- Under the Kasulatan, the Magtalas sisters were entitled to the fruits of the land for six years or until the loan was fully paid.
- Benjamin died on September 29, 2006; his heirs (the Malance heirs) found the petitioners and their spouses cultivating the land under the Kasulatan.
- The Malance heirs doubted the Kasulatan’s authenticity, alleging Benjamin was ill and incapacitated when he signed and that his signature was forged.
Procedural History
- The Malance heirs filed a Complaint for Recovery of Possession, Declaration of Nullity of the Kasulatan, and Damages before the RTC of Malolos (Branch 84), later re-raffled to Branch 9.
- The RTC dismissed the complaint on August 31, 2010, upholding the Kasulatan as a valid contract of antichresis and dismissing forgery claims.
- The Malance heirs appealed to the Court of Appeals (CA-G.R. CV No. 95984).
- The CA, in a Decision dated July 23, 2013, affirmed validity of the Kasulatan but computed actual proceeds received by Benjamin at only P218,106.84, ordered turnover of land upon payment of an outstanding P4,320.84.
- Petitioners’ motion for reconsideration was denied on June 18, 2015.
- A petition for review on certiorari was filed before the Supreme Court.
Issues
- Whether the CA erred in ruling that only P218,