Title
Zaide vs. Court of Appeals
Case
G.R. No. L-46715-16
Decision Date
Jul 29, 1988
Edita Zaide sold land to Leoncia Zaide; deed defects and alleged forgery led to disputes over ownership, rent, and validity, resolved by courts favoring Zaides.
narvasa
first deed of sale
rightful owners of land
A

Case Summary (G.R. No. L-46715-16)

Factual Background: The Two Deeds and the Registration Process

The Zaide spouses claimed that the land transaction involved payment not only of cash but also consideration in the form of a jitney, while insisting that the vehicle transfer and the loan were undisputed. The record showed that on January 11, 1965, Editta Zaide executed a first deed of sale where, although the deed described Editta as vendor and Leoncia T. Zaide as vendee as “married,” it named neither of their husbands. Roberto de Leon signed the deed, indicating “marital consent.” Because of the omission of the vendee’s husband’s name (and, correspondingly, the husbands’ names were not stated for both spouses), the Register of Deeds refused to accept this first deed for registration.

Thereafter, a second deed of sale was executed in terms essentially identical to the first. It bore the same date (January 11, 1965), the same notarial registry identification (Judge Rafael Madrazo’s notarial registry entry “Doc. No. 955, Page No. 92, Book No. 4, Series of 1965”), and differed only by setting forth the names of the husbands of both the vendor and the vendee. This second deed was promptly accepted for registration. The Register of Deeds cancelled TCT No. 69088 and issued TCT No. 138606 in the names of “Leoncia T. Zaide, married to Primitivo Zaide.”

Using the land as collateral, the Zaide spouses later obtained a loan from the Government Service Insurance System in November 1964 in the amount of P28,500.00 and constructed a two-story apartment building. On June 1, 1969, the de Leon spouses’ house burned down. They thereafter occupied one of the apartment units and were asked to pay rentals, which they refused. On July 4, 1969, the de Leon spouses filed an action in the Court of First Instance of Rizal, docketed as Civil Case No. 11977, seeking cancellation of TCT No. 138606 and damages and attorney’s fees, alleging that their title had been cancelled and substituted on the strength of “a forged deed of sale” executed in Tagaytay City on January 11, 1965.

Civil Case No. 11977 and Civil Case No. 14044: Separate Claims, Joint Trial

Because both Primitivo Zaide and Leoncia T. Zaide died on January 14, 1970, the complaint in Civil Case No. 11977 was amended to substitute their minor children, Pacita, Alexander, and Maria Zerlina, surnamed Zaide, represented by their guardian ad litem, Simeon Tolentino. After the substitution, the minors, through the guardian, filed another case in the same court, docketed as Civil Case No. 14044, to recover possession of the apartment unit occupied by the de Leon spouses and to collect rentals based on a “verbal contract of lease.” The two cases were later tried jointly after assignment to the same branch.

The joint trial produced two layers of judgments. First, on September 25, 1972, the Court of First Instance rendered judgment in favor of the Zaide spouses by dismissing the complaint in Civil Case No. 11977, declaring the sale of the land covered by TCT No. 138606 valid, and ordering the de Leon spouses, as defendants in Civil Case No. 14044, to pay rentals and to vacate. Second, on April 10, 1973, another judge granted a timely motion for reconsideration filed by the de Leon spouses and reversed the earlier ruling as to Civil Case No. 11977. The amendment order ruled that “firm and unshakable” testimony from an NBI handwriting expert established that the signatures of Editta Zaide and Roberto de Leon appearing in the second deed of sale (Exhibit “A,” identified as Exhibit 2 in the case) were forgeries based on sample signatures in other documents. It further held that the defect in the admittedly genuine first deed of sale—its omission of husbands’ names—could not be cured by the forged document. Accordingly, it declared TCT No. 138606 null and void as the “fruit of a forged deed of sale,” and ordered the Register of Deeds to reissue title in favor of the de Leon spouses.

The Trial Court’s Amending Order and the Court of Appeals Review

The Supreme Court noted an “ambivalence” in the amending order: while it declared the de Leon spouses owners of the land and ordered reissuance of title to them, it also stated it would not disturb findings with respect to Civil Case No. 14044, where the earlier judgment had treated the Zaide children as entitled to rentals for the use and occupancy of part of the apartment. Nonetheless, both sides appealed to the Court of Appeals: the Zaide children (as plaintiffs-appellees in Civil Case No. 14044) and Roberto de Leon (as defendant in Civil Case No. 14044).

The Court of Appeals affirmed the amending order of April 10, 1973 insofar as Civil Case No. 11977 declared the sale and title void due to forgery. It also modified Civil Case No. 14044 by relieving Roberto de Leon from rental payments for occupying one door of the apartment, reasoning that the apartment should not be vacated by him and his wife or any person claiming rights from them. The Court of Appeals’ core determinations included its holding that the de Leon spouses had not made an outright admission of the genuineness of the first deed (Exhibit 1), that the counsel’s trial statement “not contesting” Exhibit 1 only indicated an intent to confine the dispute to the alleged forgery of the second deed (Exhibit 2), and that the Zaides, relying on the second deed as basis of title, could not be considered buyers in good faith.

The Court of Appeals’ dispositive paragraph thus affirmed in part and modified in part, declaring the parents of the minors as builders in bad faith and excusing Roberto de Leon from paying rentals, while otherwise upholding the invalidation of the Zaide spouses’ title due to forgery.

The Parties’ Contentions Before the Supreme Court

Before the Supreme Court, the Zaide children asserted that Exhibit 2—the second deed set forth with the husbands’ names—was a forgery, while Exhibit 1—the first deed—had not been admitted by the de Leon spouses. They maintained that the procedural posture and admissions made at trial did not foreclose their forgery theory. They also insisted, in substance, that the Court of Appeals correctly treated the second deed as spurious and that the invalidity of the title followed.

The de Leon spouses’ position, as reflected in the record, was anchored on the handwriting expert’s conclusion that the signatures in Exhibit 2 were forged, and on the proposition that since forgery tainted the document used for registration, the resulting title was void.

Legal Basis: Admissions of Exhibit 1 and the Effect of a Defective but Genuine Deed

The Supreme Court first addressed whether the de Leon spouses could be treated as having admitted the genuineness and due execution of Exhibit 1. It held that the trial court had admitted the amended answer and that the de Leon spouses’ specific conduct at hearings supported the conclusion that they were not contesting Exhibit 1. The Court reasoned that it was “not the ceremonial phrase of express admission of an amended pleading” that controlled, but the “unequivocal acts of the Court” and the parties’ manifestations in relation to the revised pleading.

The Supreme Court observed that the trial court had categorically stated, for purposes of record, that it admitted the amended complaint and the amended answer. It further cited an order dated January 6, 1971 lifting an order of default, noting that defendants had filed not only an answer but also an amended answer. Most importantly, the Court relied on the recorded exchange at trial where counsel for the de Leon spouses expressly stated that they were not contesting Exhibit 1, and were contesting only Exhibit 2 as forgery. The Court therefore concluded that no evidence had been presented by the de Leon spouses of any spuriousness in Exhibit 1.

Having found Exhibit 1 genuine, the Supreme Court then addressed legal consequences. It acknowledged that Exhibit 1 was defective for registration because it omitted the name of the vendee’s husband, which caused refusal by the Register of Deeds. Nevertheless, it held that the omission was a defect in form for registration purposes and did not invalidate the sale itself. The Court reasoned that the parties had entered into a sale in writing, the price was recited as paid, and the de Leon spouses were aware that the Zaides had acted as owners by mortgaging the property and constructing the apartment building. The Court thus treated the transaction as valid and enforceable.

The Supreme Court emphasized that while a contract involving the sale of land must be in writing and subscribed by the party charged to be enforceable by action under the statute of frauds (Art. 1403(2), Civil Code), and that contracts affecting real rights over immovable property must appear in a public document under Art. 1358, Civil Code, the law also allows the parties to compel each other to observe the special form once the contract has been perfected (Art. 1357, Civil Code as discussed in the decision). Thus, even if Exhibit 1 was unregistrable due to the missing husband’s name, the Zaides had the right to compel the de Leon spouses to revise the public document by inserting the omitted circumstance. It followed that invalidating Exhibit 2 as a forgery would not render the sale ineffectual, because the de Leon spouses would still be subject to an action to require execution of a proper public document reflecting the sale originally agreed upon.

Rejection of the Forgery Finding Against Exhibit 2

The Supreme Court, however, also scrutinized the forgery determination itself. It stated it could not

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