[A.M. No. P-02-1644.

November 11, 2004]

ARNEL S. CRUZ, complainant, vs. ATTY. LUNINGNING Y. CENTRON, Acting Clerk of Court, RTC-OCC,
Calapan City, respondent.

Before us is an administrative matter which stemmed from a letter-complaint dated January 2, 2001,
originally filed with the Office of the Ombudsman, by Arnel S. Cruz against Atty. Luningning Y. Centron,
Clerk of Court VI, Regional Trial Court, Calapan City, Oriental Mindoro, for acts constitutive of gross
misconduct.

In a letter dated January 26, 2001, the Office of the Deputy Ombudsman for Luzon referred the instant
matter to the Office of the Court Administrator (OCA) of this Court.[1]

Complainant alleges: Atty. Centron assisted a certain Gloria Logdat and Conchita de la Cruz in
consummating the sale of a parcel of land covered by Original Certificate of Title (OCT) No. 2186, in the
name of one Joaquina Jabat. Respondents assistance consisted in preparing and notarizing the
documents of sale. The said sale is illegal because the property covered by the sale is still the subject of
reconstitution and Extra-Judicial Settlement among the heirs. As a result of the illegal sale, Logdat and
de la Cruz are charged with estafa through falsification of public documents. Respondent took
advantage of her being a lawyer to solicit the trust and confidence of the buyers of the subject parcel of
land. Respondent is involved in the disappearance of OCT No. 2186, and she refuses to surrender the
title which is in the possession of one of her relatives.[2] Complainant prays that respondent be
disbarred and removed from office.

In compliance with an Indorsement dated September 24, 2001 of the OCA, respondent filed her
Comment dated October 29, 2001, denying involvement in the preparation of the documents and in the
consummation of the sale of the parcel of land covered by OCT No. 2186. Respondent claims that her
only participation in the said sale is that she was the one who notarized the deed of sale on account that
she was requested by the parties to notarize the same because they cannot afford the notarial fee being
charged by the notary public they earlier approached. Respondent also denies any involvement in the
alleged loss of the owners duplicate copy of OCT No. 2186. She claims that Conchita Acyatan de la Cruz
and Gloria Acyatan Salamat-Logdat gave the said certificate of title to their lawyer, Atty. Apolonia A.
Comia-Soguilon.[3]

On July 26, 2002, the OCA submitted a report finding the complaint to be without basis. However, the
OCA observed that respondent violated the provisions of Section 242 of the Revised Administrative
Code as well as Section G, Chapter VIII of the Manual for Clerks of Court when she notarized a deed of
conveyance, a document which is not connected with the exercise of her official functions and duties as
Ex-Officio Notary Public. Accordingly, the OCA recommended that respondent be fined in the amount of
P2,000.00 and sternly warned that a repetition of the same or similar act(s) in the future will be dealt
with more severely.

In a resolution dated February 17, 2003, we resolved to require the parties to manifest within ten days
from notice if they are willing to submit the matter for resolution on the basis of the pleadings filed. In
compliance therewith, complainant filed a manifestation dated March 28, 2003, indicating his desire to
submit the case for resolution on the basis of the pleadings filed. Respondent failed to file the required
manifestation within the period allowed by the Court.
In a Resolution dated March 8, 2004, we required respondent to show cause why she should not be
disciplinarily dealt with or held in contempt for her failure to file the required manifestation.

In a Compliance dated May 3, 2004, respondent explained that her failure to timely file her
manifestation was brought about by her heavy volume of work and enormous responsibility as Clerk of
Court of the Regional Trial Court of Calapan City. She manifested her desire to submit the instant case
for resolution on the basis of the pleadings filed.

We agree with the findings and recommendation of the OCA.

In administrative cases for disbarment or suspension against lawyers, the quantum of proof required is
clearly preponderant evidence and the burden of proof rests upon the complainant.[4]

In the present case, we find that complainant failed to present clear and preponderant evidence to
show that respondent had direct and instrumental participation in the preparation of documents and
the subsequent sale of the subject parcel of land covered by OCT No. 2186. Aside from the deed of sale
covering the subject parcel of land which was notarized by respondent, no competent evidence was
shown that would directly link her to the said sale. While it may be logical to assume that respondent
was the one who prepared the deed of sale since she was the one who notarized it, we cannot give
evidentiary weight to such a supposition in the absence of any evidence to support it. Moreover,
complainants allegation that respondent influenced the buyers of the subject parcel of land is
contradicted by the sworn affidavit of Adelfa Manes, who is one of the buyers of the disputed piece of
land. Manes attested to the fact that respondent did not convince nor influence them in buying the
subject property. Likewise, we find no competent evidence to prove that respondent is responsible for
the alleged loss of the owners duplicate copy of OCT No. 2186.

Nonetheless, we find that respondent is guilty of violating Section 41 (as amended by Section 2 of R. A.
No. 6733)[5] and Section 242[6] of the Revised Administrative Code, in relation to Sections G,[7] M[8]
and N,[9] Chapter VIII of the Manual for Clerks of Court.

Under these provisions, Clerks of Court are notaries public ex officio, and may thus notarize documents
or administer oaths but only when the matter is related to the exercise of their official functions. As we
held in Astorga vs. Solas,[10] clerks of court should not, in their ex-officio capacity, take part in the
execution of private documents bearing no relation at all to their official functions.[11] In the present
case, it is not within respondents competence, as it is not part of her official function and duty, to
notarize the subject deed of sale. Respondent is guilty of abuse of authority.

In Astorga,[12] we imposed a fine of P5,000.00 on a clerk of court who was found guilty of notarizing
various documents and administering oaths on matters which are alien to his official duties. In the
present case, it appearing that this is respondents first offense of this nature and that she has only
notarized one document, we find the OCAs recommended penalty of a fine of P2,000.00 commensurate
to the offense committed.

WHEREFORE, Atty. Luningning Y. Centron, Clerk of Court, Regional Trial Court of Calapan City, Oriental
Mindoro, is found guilty of abuse of authority and is hereby ORDERED to pay a FINE of P2,000.00. She is
STERNLY WARNED that a repetition of the same or similar acts in the future shall be dealt with more
severely.
[G.R. No. 129416. November 25, 2004]

ZENAIDA B. TIGNO, IMELDA B. TIGNO and ARMI B. TIGNO, petitioners, vs. SPOUSES ESTAFINO AQUINO
and FLORENTINA AQUINO and the HONORABLE COURT OF APPEALS, respondents.
DECISION
TINGA, J.:

The controversy in the present petition hinges on the admissibility of a single document, a deed of sale
involving interest over real property, notarized by a person of questionable capacity. The assailed ruling
of the Court of Appeals, which overturned the findings of fact of the Regional Trial Court, relied primarily
on the presumption of regularity attaching to notarized documents with respect to its due execution.
We conclude instead that the document has not been duly notarized and accordingly reverse the Court
of Appeals.

The facts are as follow:

On 11 January 1980, respondent spouses Estafino and Florentina Aquino (the Aquinos) filed a complaint
for enforcement of contract and damages against Isidro Bustria (Bustria).[1] The complaint sought to
enforce an alleged sale by Bustria to the Aquinos of a one hundred twenty thousand (120,000) square
meter fishpond located in Dasci, Pangasinan. The property was not registered either under the Land
Registration Act or under the Spanish Mortgage Law, though registrable under Act No. 3344.[2] The
conveyance was covered by a Deed of Sale dated 2 September 1978.

Eventually, Bustria and the Aquinos entered into a compromise agreement, whereby Bustria agreed to
recognize the validity of the sale, and the Aquinos in turn agreed to grant to Bustria the right to
repurchase the same property after the lapse of seven (7) years.

Upon submission, the Court of First Instance of Pangasinan, Branch VII, approved and incorporated the
compromise agreement in a Decision which it rendered on 7 September 1981.

Bustria died in October of 1986.[3] On 1 December 1989, petitioner Zenaida B. Tigno (Tigno), in
substitution of her deceased father Isidro Bustria,[4] attempted to repurchase the property by filing a
Motion for Consignation. She deposited the amount of Two Hundred Thirty Thousand Pesos
(P200,000.00) with the trial court, now Regional Trial Court (RTC), Branch 55 at Alaminos, Pangasinan.
On 18 December 1989, the Aquinos filed an opposition, arguing that the right to repurchase was not yet
demandable and that Tigno had failed to make a tender of payment. In an Order dated 10 October 1999,
the RTC denied the Motion for Consignation.[5]

In June of 1991, Tigno filed a Motion for a Writ of Execution, which was likewise opposed by the
Aquinos, and denied by the RTC. Then, on 6 September 1991, Tigno filed an action for Revival of
Judgment,[6] seeking the revival of the decision in Civil Case No. A-1257, so that it could be executed
accordingly.[7] The Aquinos filed an answer, wherein they alleged that Bustria had sold his right to
repurchase the property to them in a deed of sale dated 17 October 1985.[8]

Among the witnesses presented by the Aquinos during trial were Jesus De Francia (De Francia), the
instrumental witness to the deed of sale, and former Judge Franklin Cario (Judge Cario), who notarized
the same. These two witnesses testified as to the occasion of the execution and signing of the deed of
sale by Bustria. Thereafter, in their Formal Offer of Documentary Evidence, the Aquinos offered for
admission as their Exhibit No. 8, the deed of sale (Deed of Sale)[9] purportedly executed by Bustria. The
admission of the Deed of Sale was objected to by Tigno on the ground that it was a false and fraudulent
document which had not been acknowledged by Bustria as his own; and that its existence was
suspicious, considering that it had been previously unknown, and not even presented by the Aquinos
when they opposed Tignos previous Motion for Consignation.[10]

In an Order dated 6 April 1994, the RTC refused to admit the Deed of Sale in evidence.[11] A Motion for
Reconsideration praying for the admission of said exhibit was denied in an Order dated 27 April
1994.[12]

Then, on 18 August 1994, a Decision was rendered by the RTC in favor of Tigno. The RTC therein
expressed doubts as to the authenticity of the Deed of Sale, characterizing the testimonies of De Francia
and Cario as conflicting.[13] The RTC likewise observed that nowhere in the alleged deed of sale was
there any statement that it was acknowledged by Bustria;[14] that it was suspicious that Bustria was not
assisted or represented by his counsel in connection with the preparation and execution of the deed of
sale[15] or that Aquino had raised the matter of the deed of sale in his previous Opposition to the
Motion for Consignation.[16] The RTC then stressed that the previous Motion for Execution lodged by
Tigno had to be denied since more than five (5) years had elapsed from the date the judgment in Civil
Case No. A-1257 had become final and executory; but the judgment could be revived by action such as
the instant complaint. Accordingly, the RTC ordered the revival of the judgment dated 7 September
1981 in Civil Case No. A-1257.[17]

The Aquinos interposed an appeal to the Court of Appeals.[18] In the meantime, the RTC allowed the
execution pending appeal of its Decision.[19] On 23 December 1996, the Court of Appeals Tenth Division
promulgated a Decision[20] reversing and setting aside the RTC Decision. The appellate court
ratiocinated that there were no material or substantial inconsistencies between the testimonies of Cario
and De Francia that would taint the document with doubtful authenticity; that the absence of the
acknowledgment and substitution instead of a jurat did not render the instrument invalid; and that the
non-assistance or representation of Bustria by counsel did not render the document null and
ineffective.[21] It was noted that a notarized document carried in its favor the presumption of regularity
with respect to its due execution, and that there must be clear, convincing and more than merely
preponderant evidence to contradict the same. Accordingly, the Court of Appeals held that the RTC
erred in refusing to admit the Deed of Sale, and that the document extinguished the right of Bustrias
heirs to repurchase the property.

After the Court of Appeals denied Tignos Motion for Reconsideration,[22] the present petition was filed
before this Court. Tigno imputes grave abuse of discretion and misappreciation of facts to the Court of
Appeals when it admitted the Deed of Sale. He also argues that the appellate court should have declared
the Deed of Sale as a false, fraudulent and unreliable document not supported by any consideration at
all.

The general thrusts of the arguments posed by Tigno are factually based. As such, they could normally
lead to the dismissal of this Petition for Review. However, while this Court is not ordinarily a trier of
facts,[23] factual review may be warranted in instances when the findings of the trial court and the
intermediate appellate court are contrary to each other.[24] Moreover, petitioner raises a substantial
argument regarding the capacity of the notary public, Judge Cario, to notarize the document. The Court
of Appeals was unfortunately silent on that matter, but this Court will take it up with definitiveness.
The notarial certification of the Deed of Sale reads as follows:

ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES)

PROVINCE OF PANGASINAN ) S.S.
MUNICIPALITY OF ALAMINOS )

SUBSCRIBED AND SWORN TO before me this 17th day of October 1985 at Alaminos, Pangasinan both
parties known to me to be the same parties who executed the foregoing instrument.

FRANKLIN CARIO
Ex-Officio Notary Public
Judge, M.T.C.
Alaminos, Pangasinan

There are palpable errors in this certification. Most glaringly, the document is certified by way of a jurat
instead of an acknowledgment. A jurat is a distinct creature from an acknowledgment. An
acknowledgment is the act of one who has executed a deed in going before some competent officer or
court and declaring it to be his act or deed; while a jurat is that part of an affidavit where the officer
certifies that the same was sworn before him.[25] Under Section 127 of the Land Registration Act,[26]
which has been replicated in Section 112 of Presidential Decree No. 1529,[27] the Deed of Sale should
have been acknowledged before a notary public.[28]

But there is an even more substantial defect in the notarization, one which is determinative of this
petition. This pertains to the authority of Judge Franklin Cario to notarize the Deed of Sale.

It is undisputed that Franklin Cario at the time of the notarization of the Deed of Sale, was a sitting judge
of the Metropolitan Trial Court of Alaminos.[29] Petitioners point out, citing Tabao v. Asis,[30] that
municipal judges may not undertake the preparation and acknowledgment of private documents,
contracts, and other acts of conveyance which bear no relation to the performance of their functions as
judges.[31] In response, respondents claim that the prohibition imposed on municipal court judges from
notarizing documents took effect only in December of 1989, or four years after the Deed of Sale was
notarized by Cario.[32]

Respondents contention is erroneous. Municipal Trial Court (MTC) and Municipal Circuit Trial Court
(MCTC) judges are empowered to perform the functions of notaries public ex officio under Section 76 of
Republic Act No. 296, as amended (otherwise known as the Judiciary Act of 1948) and Section 242 of the
Revised Administrative Code.[33] However, as far back as 1980 in Borre v. Moya,[34] the Court explicitly
declared that municipal court judges such as Cario may notarize only documents connected with the
exercise of their official duties.[35] The Deed of Sale was not connected with any official duties of Judge
Cario, and there was no reason for him to notarize it. Our observations as to the errant judge in Borre
are pertinent in this case, considering that Judge Cario identified himself in the Deed of Sale as Ex-Officio
Notary Public, Judge, MTC:

[A notary ex officio] should not compete with private law practitioners or regular notaries in transacting
legal conveyancing business.
In the instant case, it was not proper that a city judge should notarize documents involving private
transactions and sign the document in this wise: "GUMERSINDO ARCILLA, Notary Public Ex-Officio, City
Judge" (p. 16, Rollo, Annex D of Complaint). In doing so, he obliterated the distinction between a regular
notary and a notary ex officio.[36]

There are possible grounds for leniency in connection with this matter, as Supreme Court Circular No. I-
90 permits notaries public ex officio to perform any act within the competency of a regular notary public
provided that certification be made in the notarized documents attesting to the lack of any lawyer or
notary public in such municipality or circuit. Indeed, it is only when there are no lawyers or notaries
public that the exception applies.[37] The facts of this case do not warrant a relaxed attitude towards
Judge Carios improper notarial activity. There was no such certification in the Deed of Sale. Even if one
was produced, we would be hard put to accept the veracity of its contents, considering that Alaminos,
Pangasinan, now a city,[38] was even then not an isolated backwater town and had its fair share of
practicing lawyers.

There may be sufficient ground to call to task Judge Cario, who ceased being a judge in 1986, for his
improper notarial activity. Perhaps though, formal sanction may no longer be appropriate considering
Judge Carios advanced age, assuming he is still alive.[39] However, this Decision should again serve as an
affirmation of the rule prohibiting municipal judges from notarizing documents not connected with the
exercise of their official duties, subject to the exceptions laid down in Circular No. 1-90.

Most crucially for this case, we should deem the Deed of Sale as not having been notarized at all. The
validity of a notarial certification necessarily derives from the authority of the notarial officer. If the
notary public does not have the capacity to notarize a document, but does so anyway, then the
document should be treated as unnotarized. The rule may strike as rather harsh, and perhaps may prove
to be prejudicial to parties in good faith relying on the proferred authority of the notary public or the
person pretending to be one. Still, to admit otherwise would render merely officious the elaborate
process devised by this Court in order that a lawyer may receive a notarial commission. Without such a
rule, the notarization of a document by a duly appointed notary public will have the same legal effect as
one accomplished by a non-lawyer engaged in pretense.

The notarization of a document carries considerable legal effect. Notarization of a private document
converts such document into a public one, and renders it admissible in court without further proof of its
authenticity.[40] Thus, notarization is not an empty routine; to the contrary, it engages public interest in
a substantial degree and the protection of that interest requires preventing those who are not qualified
or authorized to act as notaries public from imposing upon the public and the courts and administrative
offices generally.[41]

On the other hand, what then is the effect on the Deed of Sale if it was not notarized? True enough,
from a civil law perspective, the absence of notarization of the Deed of Sale would not necessarily
invalidate the transaction evidenced therein. Article 1358 of the Civil Code requires that the form of a
contract that transmits or extinguishes real rights over immovable property should be in a public
document, yet it is also an accepted rule that the failure to observe the proper form does not render the
transaction invalid. Thus, it has been uniformly held that the form required in Article 1358 is not
essential to the validity or enforceability of the transaction, but required merely for convenience.[42]
We have even affirmed that a sale of real property though not consigned in a public instrument or
formal writing, is nevertheless valid and binding among the parties, for the time-honored rule is that
even a verbal contract of sale or real estate produces legal effects between the parties.[43]

Still, the Court has to reckon with the implications of the lack of valid notarization of the Deed of Sale
from the perspective of the law on evidence. After all, the case rests on the admissibility of the Deed of
Sale.

Clearly, the presumption of regularity relied upon by the Court of Appeals no longer holds true since the
Deed of Sale is not a notarized document. Its proper probative value is governed by the Rules of Court.
Section 19, Rule 132 states:

Section 19. Classes of documents.For the purpose of their presentation in evidence, documents are
either public or private.

Public documents are:

(a) The written official acts, or records of the official acts of the sovereign authority, official bodies and
tribunals, and public officers, whether of the Philippines, or of a foreign country;

(b) Documents acknowledged before a notary public except last wills and testaments; and

(c) Public records, kept in the Philippines, of private documents required by law to be entered therein.

All other writings are private. (Emphasis supplied.)

The Deed of Sale, invalidly notarized as it was, does not fall under the enumeration of public documents;
hence, it must be considered a private document. The nullity of the alleged or attempted notarization
performed by Judge Cario is sufficient to exclude the document in question from the class of public
documents. Even assuming that the Deed of Sale was validly notarized, it would still be classified as a
private document, since it was not properly acknowledged, but merely subscribed and sworn to by way
of jurat.

Being a private document, the Deed of Sale is now subject to the requirement of proof under Section 20,
Rule 132, which states:

Section 20. Proof of private document.Before any private document offered as authentic is received in
evidence, its due execution and authenticity must be proved either:

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the maker.

Any other private document need only be identified as that which is claimed to be.

The Deed of Sale was offered in evidence as authentic by the Aquinos, who likewise insist that its
enforceability militates against Tignos claim. Correspondingly, the burden falls upon the Aquinos to
prove its authenticity and due execution. The Court of Appeals clearly erred in not appreciating the
Deed of Sale as a private document and in applying the presumption of regularity that attaches only to
duly notarized documents, as distinguished from private documents.

Did the RTC err then in refusing to admit the Deed of Sale? We hold that it did not. Section 20, Rule 132
provides ample discretion on the trier of fact before it may choose to receive the private document in
evidence. The RTC wisely refused to admit the Deed of Sale, taking great lengths as it did to explain its
doubts as to its veracity. The RTC was not convinced of the proffered proof by the Aquinos, and the
exercise of its sound discretion as the primary trier of fact warrants due respect.

The most telling observation of the RTC relates to the fact that for the very first time respondents
alleged the existence of the Deed of Sale when they filed their answer to petitioners current action to
revive judgment.[44] Prior to the initiation of the present action, Tigno had tried to operationalize and
implement the Compromise Agreement through two judicial means: consignation and execution of
judgment. The Aquinos duly opposed these prior attempts of the petitioner to exercise the right to
repurchase, but they did not raise then the claim that such right to repurchase was already extinguished
by the Deed of Sale. Tigno attempted to exercise the right to repurchase only a few years after the
execution of the Deed of Sale to which respondents themselves were signatories. Thus, it is incredulous
that the Aquinos did not invoke the Deed of Sale when they opposed in court petitioners successive
attempts at consignation and execution of judgment. The Deed of Sale, if in existence and valid, would
have already precluded Tignos causes of action for either consignation or execution of judgment. The
only believable conclusion, as drawn by the RTC, was that the Deed of Sale had yet to be created when
petitioner moved in 1990 for consignation and execution of judgmentan existential anomaly if we were
to agree with the respondents that such document had been signed and notarized back in 1985.

The dubiousness in origin of the Deed of Sale is not alleviated by the other observations of the RTC. It
also pointed to certain incredible aspects in the Aquinos tale of events. It noted that no receipts were
ever presented by the respondents to evidence actual payment of consideration by them to Bustria,
despite the allegation of the respondents that the amount was covered by seven (7) receipts.[45] The
Aquinos claimed that Bustria kept all the receipts, an assertion which the RTC found as unbelievable,
citing ordinary human nature to ask for receipts for significant amounts given and to keep the same.[46]
In itself, the absence of receipts, or any proof of consideration, would not be conclusive since
consideration is always presumed. However, given the totality of the circumstances surrounding this
case, the absence of such proof further militates against the claims of the Aquinos.

We can appreciate in a similar vein the observation of the Court of Appeals that Bustria did not bother
to seek his lawyers assistance as regards the execution of the Deed of Sale, considering that the subject
property had previously been fiercely litigated. Although the Court of Appeals was correct in ruling that
the document would not be rendered null or ineffective due to the lack of assistance of counsel, the
implausibility of the scenario strikes as odd and therefore reinforces the version found by the RTC as
credible.

The Court likewise has its own observations on the record that affirm the doubts raised by the Court of
Appeals. Isidro Bustria, who would die in 1986, was already ninety-three (93) years old when he
allegedly signed the Deed of Sale in 1985. Still, the Aquinos asserted before the RTC that Bustria traveled
unaccompanied from his home in Dasol, Pangasinan, passing through two towns to Alaminos, to execute
the Deed of Sale. Without discrediting the accomplishments of nonagenarians capable of great physical
feats, it should be acknowledged as a matter of general assumption that persons of Bustrias age are
typically sedentary and rarely so foolhardy as to insist on traveling significant distances alone.
Also of note is the fact that there are glaring differences as to the alleged signature of Bustria on the
Deed of Sale and as it otherwise appears on the judicial record. Bustrias signature in the 1981
Compromise Agreement is noticeably shaky which is not surprising, considering that it was subscribed
when Bustria was eighty-nine (89) years old. However, Bustrias signature on the Deed of Sale, which if
genuine was affixed when he was already ninety-three (93) years old, is remarkably steady in its strokes.
There are also other evident differences between Bustrias signature on the Deed of Sale and on other
documents on the record.

Admittedly, these doubts cast above arise in chief from an appreciation of circumstantial evidence.
These have to be weighed against the findings of the Court of Appeals that the fact that Bustria signed
the Deed of Sale was established by the respective testimonies of witnesses De Francia and Judge Cario.
In its own appreciation of these testimonies, the RTC alluded to notable inconsistencies in their
testimonies. As a final measure of analysis, the Court shall now examine whether the appellate court
was in error in reversing the conclusion of the RTC on these testimonies.

The inconsistencies cited by the RTC were that De Francia testified that Judge Cario himself prepared
and typed the Deed of Sale in his office, where the document was signed,[47] while Judge Cario testified
that he did not type the Deed of Sale since it was already prepared when the parties arrived at his office
for the signing.[48] On this point, the Court of Appeals stated with utter nonchalance that a perusal of
the record revealed no material or substantial inconsistencies between the testimonies of Judge Cario
and De Francia.

Strangely, the appellate court made no comment as to the inconsistency pointed out by the RTC as to
who prepared the Deed of Sale. If the only point of consideration was the due execution of the Deed of
Sale, then the Court of Appeals should have properly come out with its finding. Other variances aside,
there are no contradictions in the testimonies of Judge Cario and De Francia on the question of whether
or not Bustria signed the Deed of Sale.

However, as earlier established, the Deed of Sale is a private document. Thus, not only the due
execution of the document must be proven but also its authenticity. This factor was not duly considered
by the Court of Appeals. The testimonies of Judge Cario and De Francia now become material not only
to establish due execution, but also the authenticity of the Deed of Sale. And on this point, the
inconsistencies pointed out by the RTC become crucial.

The matter of authenticity of the Deed of Sale being disputed, the identity of the progenitor of this all-
important document is a material evidentiary point. It is disconcerting that the very two witnesses of the
respondent offered to prove the Deed of Sale, flatly contradict each other on the basis of their own
personal and sensory knowledge. Worse, the purported author of the Deed of Sale disavowed having
drafted the document, notwithstanding the contrary testimony grounded on personal knowledge by the
documentary witness.

Establishing the identity of the person who wrote the Deed of Sale would not ordinarily be necessary to
establish the validity of the transaction it covers. However, since it is the authenticity of the document
itself that is disputed, then the opposing testimonies on that point by the material witnesses properly
raises questions about the due execution of the document itself. The inconsistencies in the testimonies
of Judge Cario and De Francia are irreconcilable. It is not possible to affirm the testimony of either
without denigrating the competence and credibility of the other as a witness. If Judge Cario was truthful
in testifying that he did not write the Deed of Sale, then doubt can be cast as to the reliability of the
notarial witness De Francia. It takes a leap of imagination, a high level of gumption, and perverse
deliberation for one to erroneously assert, under oath and with particularities, that a person drafted a
particular document in his presence.

However, if we were to instead believe De Francia, then the integrity of the notary public, Judge Cario,
would be obviously compromised. Assuming that Judge Cario had indeed authored the Deed of Sale, it
would indeed be odd that he would not remember having written the document himself yet sufficiently
recall notarizing the same. If his testimony as to authorship of the document is deemed as dubious, then
there is all the reason to make a similar assumption as to his testimony on the notarization of the Deed
of Sale.

These inconsistencies are not of consequence because there is need to indubitably establish the author
of the Deed of Sale. They are important because they cast doubt on the credibility of those witnesses of
the Aquinos, presented as they were to attest to the due execution and authenticity of the Deed of Sale.
The Court of Appeals was clearly in error in peremptorily disregarding this observation of the RTC.

As a result, we are less willing than the Court of Appeals to impute conclusive value to the testimonies of
de Francia and Judge Cario. The totality of the picture leads us to agree with the trial court that the Deed
of Sale is ineluctably dubious in origin and in execution. The Court deems as correct the refusal of the
RTC to admit the Deed of Sale, since its due execution and authenticity have not been proven. The
evidence pointing to the non-existence of such a transaction is so clear and convincing that it is
sufficient even to rebut the typical presumption of regularity arising from the due execution of notarial
documents. However, for the reasons stated earlier, the Deed of Sale is ineluctably an unnotarized
document. And the lower court had more than sufficient basis to conclude that it is a spurious
document.

Since the validity of the Deed of Sale has been successfully assailed, Tignos right to repurchase was not
extinguished at the time of the filing of the Petition for revival of judgment, as correctly concluded by
the RTC. The Court of Appeals being in error when it concluded otherwise, the reinstatement of the RTC
Decision is warranted.

WHEREFORE, the Petition is GRANTED. The assailed Decision dated 23 December 1996 and Resolution
dated 9 June 1997 of the Court of Appeals in CA-G.R. CV No. 49879 is REVERSED, and the Decision dated
18 August 1994 of the Regional Trial Court of Alaminos, Pangasinan, Branch 55, in Civil Case No. A-1918
is REINSTATED. Costs against respondents.

SO ORDERED.
ERONIMO C. FUENTES, Complainant,

- versus -

JUDGE ROMUALDO G. BUNO,

Presiding Judge, Municipal Circuit Trial Court (MCTC), Talibon-Getafe, Bohol,

Respondent.

A.M. No. MTJ-99-1204

(Formerly OCA IPI No. 97-355-MTJ)

This administrative case against Judge Romualdo G. Buno of the 4TH Municipal Circuit Trial Court
(MCTC), Talibon-Getafe, Bohol, stemmed from a complaint filed by Geronimo C. Fuentes charging him
with abuse of discretion and authority and graft and corruption.

In his complaint, Geronimo Fuentes alleged that he is one of the nine (9) heirs of Bernardo Fuentes,
their father, who owned an agricultural land located at San Jose, Talibon, Bohol, and that respondent
judge prepared and notarized an Extra-Judicial Partition with Simultaneous Absolute Deed of Sale of the
said agricultural land, executed by complainants mother Eulalia Credo Vda. de Fuentes, widow of
Bernardo Fuentes, and Alejandro Fuentes, on his own behalf and on behalf of his brothers and sisters,
including Geronimo Fuentes, as heirs/vendors and one Ma. Indira A. Auxtero, as vendee; that in the
aforesaid document, the aforementioned agricultural land was sold, transferred/conveyed by the
heirs/vendors to the vendee despite the fact that in his Special Power of Attorney (SPA), he merely
appointed his brother, Alejandro Fuentes to mortgage said agricultural land but not to partition, much
more to sell the same. According to complainant Geronimo Fuentes respondent judge notarized said
document as ex-officio Notary Public, thereby abusing his discretion and authority as well as committing
graft and corruption.

In his 1st Indorsement dated December 2, 1997, the then Court Administrator required the respondent
to file his comment on the complaint within ten days. In compliance thereto respondent judge
submitted his answer, which prayed for the dismissal of the complaint. He admitted that on December
24, 1996, while he was the Presiding Judge of the MCTC, Talibon-Getafe, stationed at Talibon, Bohol, he
notarized an Extra-Judicial Partition of Real Property with Simultaneous Absolute Deed of Sale,
described as Document No. 1158, Series of 1996. He explained his reasons and related the
circumstances surrounding the case as follows:

1. That in the last week of the month of September, 1996, Mrs. Eulalia Vda. de Fuentes, Alejandro
Fuentes together with Mrs. Helen A. Auxtero and Miss Ma. Indira Auxtero came to my house and
requested me to make and prepare a document of sale between the Heirs of Bernardo Fuentes and Ma.
Indira Auxtero as Vendee and upon verification of the papers they presented to the undersigned it was
found out that the land subject of the sale is a conjugal property of the deceased Bernardo Fuentes and
Eulalia Credo Vda. de Fuentes. Being a conjugal property, the undersigned advised them to secure
special power of attorney for the children of Bernardo Fuentes who are out of town.

2. On the 20th of December, 1996 Eulalia Vda. de Fuentes and Alejandro Fuentes came back to the
house bringing a special power of attorney executed by Bonifacio Fuentes, Benjamin Fuentes, Urbano
Fuentes, Samuela Fuentes, Rufina Fuentes and Bernardo Fuentes, Jr. carbon copy of the said Special
Power of Attorney herewith attached as Annex A of the answer. All these special power of attorney
empowers Alejandro Fuentes to execute a Deed of Sale of a parcel of land under Transfer Certificate of
Title No. 24937 registered in the name of Bernardo Fuentes, their deceased father.

Since no special power of attorney was presented to the undersigned executed by PO2 Geronimo
Fuentes, the undersigned refused to make their document of sale but Eulalia Vda. de Fuentes and
Alejandro Fuentes earnestly requested the undersigned to make and prepare the necessary document
saying that the special power of attorney of PO2 Geronimo Fuentes is coming and they are in urgent
need of the money and because of their request, the undersigned prepared the document, and Extra-
Judicial Partition of Real Property with Simultaneous Absolute Deed of Sale in favor of Ma. Indira
Auxtero. That PO2 Geronimo Fuentes was included in the Deed of Sale because of the assurance of
Alejandro Fuentes and Eulalia Vda. de Fuentes that the Special Power of Attorney of PO2 Geronimo
Fuentes is coming.

3. That after the necessary document was prepared Eulalia Vda. de Fuentes and Alejandro Fuentes
together with the vendee, Ma. Indira Auxtero signed the document on December 24, 1996 and on that
day the said document was notarized by the undersigned.

4. That few days after the document was notarized, the undersigned learned that the Special Power of
Attorney executed by PO2 Geronimo Fuentes empowered Alejandro Fuentes only to mortgage the
property so Mrs. Eulalia Vda. de Fuentes, Alejandro Fuentes and the vendee, Ma. Indira Auxtero were
called by the undersigned about the Special Power of Attorney executed by PO2 Geronimo Fuentes but
Eulalia Fuentes and Alejandro Fuentes explained to the undersigned that they will be responsible for
PO2 Geronimo Fuentes considering that the money was already spent by them and the vendee, Ma.
Indira Auxtero also assured the undersigned that if PO2 Geronimo Fuentes insists to take back his share,
she is willing and in fact she reserved the share of Geronimo Fuentes, hence, the transaction was
completed.

5. The undersigned is making and notarizing the document outside of office hour cannot be said to have
abuse his discretion and authority since he was earnestly requested by Eulalia Vda. de Fuentes and
Alejandro Fuentes to prepare and notarized the document with authority from his brothers and sisters
and with respect to Eulalia Vda. de Fuentes, she is selling her share of the conjugal property which is
one-half (1/2) of the entire parcel of land.

In the aforementioned answer, respondent judge contended that he could not be charged of graft and
corruption, since in a municipality where a notary public is unavailable, a municipal judge is allowed to
notarize documents or deeds as ex-officio notary public. To support his claim, he presented two
certifications: one, from Atty. Azucena C. Macalolot, Clerk of Court VI of the RTC, Branch 52, Talibon,
Bohol, who certified that according to their records and dockets, no petition for commission and/or
renewal of commission as notary public was granted by the said court for calendar year 1996 and no
appointment as notary public was issued for that year; and the other, from Mayor Juanario A. Item of
Talibon, Bohol who also certified that no notary public was staying and residing in the Municipality of
Talibon, Bohol during the year 1996.

Respondent judge contended that he did nothing wrong in preparing and notarizing the said document
and that he acted in good faith and in obedience to the earnest plea of complainants mother and
siblings who were in urgent need of money, and with their assurance that complainants SPA was
forthcoming. In his attempt to explain his lack of malice, respondent judge narrated that after learning
that the SPA only authorized his brother, Alejandro Fuentes to mortgage the property, he summoned
the latter, his mother and the buyer of the land. Alejandro then assured him that they would be
responsible to the complainant and that the buyer was willing to return complainants share in the
property. Respondent further questioned complainants sincerity in filing the complaint because the
latter allegedly wanted merely the respondent to persuade the buyer to return the whole property to
him instead of his share only.

In its Memorandum Report, the OCA recommended that the present case be re-docketed as a regular
administrative matter and that respondent be fined in the amount of P10,000.00 for unauthorized
notarization of a private document, the same to be deducted from his retirement benefit. The said OCA
recommendation was premised on the lack of authority of respondent judge to prepare and notarize the
document in question, which had no direct relation to the performance of his official functions as a
judge.

While Section 76 of Republic Act No. 296,[1] as amended, and Section 242 of the Revised Administrative
Code[2] authorize MTC and MCTC judges to perform the functions of notaries public ex officio, the Court
laid down the scope of said authority in SC Circular No. 1-90. Pertinently, the said Circular reads:

MTC and MCTC judges may act as notaries public ex officio in the notarization of documents connected
only with the exercise of their official functions and duties [Borre v. Mayo, Adm. Matter No. 1765-CFI,
October 17, 1980, 100 SCRA 314; Penera v. Dalocanog, Adm. Matter No. 2113-MJ, April 22, 1981, 104
SCRA 193]. They may not, as notaries public ex officio, undertake the preparation and acknowledgment
of private documents, contracts and other acts of conveyances which bear no direct relation to the
performance of their functions as judges. The 1989 Code of Judicial Conduct not only enjoins judges to
regulate their extra-judicial activities in order to minimize the risk of conflict with their judicial duties,
but also prohibits them from engaging in the private practice of law (Canon 5 and Rule 5.07).

However, the Court, taking judicial notice of the fact that there are still municipalities which have
neither lawyers nor notaries public, rules that MTC and MCTC judges assigned to municipalities or
circuits with no lawyers or notaries public may, in the capacity as notaries public ex officio, perform any
act within the competency of a regular notary public, provided that: (1) all notarial fees charged be for
the account of the Government and turned over to the municipal treasurer (Lapena, Jr. vs. Marcos, Adm.
Matter No. 1969-MJ, June 29, 1982, 114 SCRA 572); and, (2) certification be made in the notarized
documents attesting to the lack of any lawyer or notary public in such municipality or circuit.

The above-quoted SC Circular No. 1-90 prohibits judges from undertaking the preparation and
acknowledgment of private documents, contracts and other deeds of conveyances which have no direct
relation to the discharge of their official functions. In this case, respondent judge admitted that he
prepared both the document itself, entitled Extra-judicial Partition with Simultaneous Absolute Deed of
Sale and the acknowledgment of the said document, which had no relation at all to the performance of
his function as a judge. These acts of respondent judge are clearly proscribed by the aforesaid Circular.
While it may be true that no notary public was available or residing within respondent judges territorial
jurisdiction, as shown by the certifications issued by the RTC Clerk of Court and the Municipal Mayor of
Talibon, Bohol, SC Circular No. 1-90 specifically requires that a certification attesting to the lack of any
lawyer or notary public in the said municipality or circuit be made in the notarized document. Here, no
such certification was made in the Extra-Judicial Partition with Simultaneous Deed of Sale. Respondent
judge also failed to indicate in his answer as to whether or not any notarial fee was charged for that
transaction, and if so, whether the same was turned over to the Municipal Treasurer of Talibon, Bohol.
Clearly, then, respondent judge, who was the sitting judge of the MCTC, Talibon-Getafe, Bohol, failed to
comply with the aforesaid conditions prescribed by SC Circular No. 1-90, even if he could have acted as
notary public ex-officio in the absence of any lawyer or notary public in the municipality or circuit to
which he was assigned.

Whether or not respondent judge truly acted in good faith when he prepared and acknowledged the
subject document is beside the point since he failed to strictly observe the requirements of SC Circular
No. 1-90. As noted by the then Court Administrator, the document involved here is Document No. 1158,
which shows that numerous documents were notarized by respondent judge in the year 1996 alone.
Respondent judge was silent as to whether he charged fees when he notarized documents and if so,
whether he turned over the notarial fees to the municipal treasurer. Moreover, contrary to Rule IV, Sec.
6(a) of the Rules on Notarial Practice of 2004,[3] respondent notarized the said document without the
SPA of the attorney-in-fact of the vendors which gave rise to the legal problem between the vendors
and the vendee concerning the scope of authority of the aforesaid attorney-in-fact. By failing to comply
with the conditions set for SC Circular No. 1-90 and violating the provision of the Rules on Notarial
Practice of 2004, respondent judge failed to conduct himself in a manner that is beyond reproach and
suspicion. Any hint of impropriety must be avoided at all cost. Judges are enjoined by the Code of
Judicial Conduct to regulate their extra-judicial activities in order to minimize the risk of conflict with
their judicial duties.[4]

Rule 140 of the Rules of Court deals with the administrative sanctions imposable on erring judges.
Violation of Supreme Court rules, directives and circulars is a Less Serious Charge punishable by
suspension from office or a fine of more than P10,000.00 but not exceeding P20,000.00. However,
respondent judges application for optional retirement had already been approved by the Court en banc
on March 10, 1998 in Administrative Matter No. 9449-Ret. and the release of his retirement benefits
was allowed provided that the amount of P20,000.00 was withheld from the said retirement benefits,
pursuant to the Resolution of this Courts Third Division on June 16, 1999 in this administrative case,
formerly docketed as Administrative Matter OCA IPI No. 97-355-MTJ.

WHEREFORE, respondent Judge ROMUALDO G. BUNO, now retired, of the Municipal Circuit Trial Court
of Talibon-Getafe, Bohol, is found LIABLE for failure to comply with SC Circular No. 1-90 and the Rules on
Notarial Practice. He is hereby ORDERED to pay a FINE of Twelve Thousand Pesos (P12,000.00), to be
deducted from the amount withheld from his retirement benefits.
A.C. No. 5645 July 2, 2002

ROSALINDA BERNARDO VDA DE ROSALES, complainant,

vs.
ATTY. MARIO G. RAMOS, respondent.

BELLOSILLO, J.:

This complaint for disbarment was filed in behalf of complainant Rosalinda Bernardo Vda. de Rosales by
the National Bureau of Investigation (NBI) against respondent Atty. Mario G. Ramos for violation of Act
No. 2711 of the Revised Administrative Code of 1917, Title IV, Ch. 11, otherwise know as the Notarial
Law, particularly Secs. 245 and 246 thereof.

In September 1990 Manuel A. Bernardo, brother of complainant Rosalinda Bernardo Vda. de Rosales,
borrowed from Rosalinda the Original Transfer Certificate of Title No. 194464 covering Lot No. 1-B-4-H
in her name. The lot measures 112 square meters and is located at the back of Manuel's house on Fabie
Street, Paco, Metro Manila. On 25 November 1990 Rosalinda sold this lot to one Alfredo P. Castro.
When she asked her brother Manuel to return her title he refused.

On 22 October 1990 Rosalinda executed an Affidavit of Loss of her title and presented the affidavit to
the Register of Deeds of Manila.

On 3 September 1991 the Register of Deeds informed Rosalinda that her title to the property was
already transferred to Manuel by virtue of a Deed of Absolute Sale she purportedly executed in favor of
Manuel on 5 September 1990. The document was notarized by respondent Atty. Mario G. Ramos on 1
October 1990 and entered in his Notarial Register as Doc. No. 388, Page No. 718, Book No. 10, Series of
1990. Rosalinda however denied having signed any deed of sale over her property in favor of Manuel.

On 3 September 1991 Rosalinda filed with the NBI a complaint for falsification of public document
against her brother Manuel. The NBI invited respondent Atty. Ramos for questioning. The complaint
alleged among others that on 12 September 1991 Atty. Mario G. Ramos executed an affidavit before the
NBI admitting that when Manuel presented the purported Deed of Absolute Sale to him for notarization,
he (Atty. Ramos) found some defects in the document and that complainant Rosalinda was not around.
The NBI Questioned Documents Division also compared Rosalinda's signature appearing in the Deed of
Absolute Sale with samples of her genuine signature, and found that the signature in the purported
Deed of Absolute Sale and her genuine signatures were not written by one and the same person.

On 5 October 1992 the NBI transmitted its findings to the Office of the City Prosecutor of Manila with
the recommendation that Manuel and Atty. Ramos be prosecuted for Falsification of Public Document
under Art. 172 in relation to Art. 171 of The Revised Penal Code, and that Atty. Ramos be additionally
charged with violation of the Notarial Law.

The NBI also transmitted to the Integrated Bar of the Philippines (IBP) Commission on Bar Discipline
(CBD) photocopies of the NBI investigation report and its annexes, and a verified complaint1 for
disbarment signed by Rosalinda. The CBD received the records on 5 October 1992. On the same date,
the CBD through Commissioner Victor C. Fernandez directed respondent to submit an answer to the
complaint within fifteen (15) days from notice.

Respondent admitted in his Answer2 that he had affixed his signature on the purported Deed of
Absolute Sale but failed to enter the document in his Notarial Registry Book. He also admitted executing
before the NBI on 12 September 1991 an affidavit regarding the matter. Respondent prayed for the
dismissal of the complaint since according to him he only inadvertently signed the purported Deed of
Absolute Sale and/or that his signature was procured through mistake, fraud, undue influence or
excusable negligence, claiming that he simply relied on the assurances of Manuel that the document
would not be used for purposes other than a loan between brother and sister, and that he affixed his
signature thereon with utmost good faith and without intending to obtain personal gain or to cause
damage or injury to another.

The CBD set the case for hearing on 3 March 2000, 28 April 2000, 16 June 2000 and 5 October 2000.
Complainant never appeared. The records show that the notices sent to her address at 1497 Fabie
Street, Paco, Manila, were returned unclaimed.3

On 26 January 2002 the IBP Board of Governors approved the report and recommendation of the CBD
through Commissioner Fernandez that the case against respondent be dismissed in view of
complainant's failure to prosecute and for lack of evidence on record to substantiate the complaint.4
The Investigating Commissioner found that the notices sent to complainant were returned unclaimed
with the annotation "moved out," and that she did not leave any forwarding address, and neither did
she come to the CBD to inquire about the status of her case. From these actuations, he concluded that
complainant had lost interest in the further prosecution of this case,5 and so recommended its
dismissal.

We cannot wholly agree with the findings and recommendation of the Investigating Commissioner. It is
clear from the pleadings before us that respondent violated the Notarial Law in failing to register in his
notarial book the deed of absolute sale he notarized, which fact respondent readily admitted.

The Notarial Law is explicit on the obligations and duties of a notary public. It requires him to keep a
notarial register where he shall record all his official acts as notary,6 and specifies what information with
regard to the notarized document should be entered therein.7 Failure to perform this duty results in the
revocation of his commission as notary public.8

The importance attached to the act of notarization cannot be overemphasized. Notarization is not an
empty, meaningless, routinary act. It is invested with substantive public interest, such that only those
who are qualified or authorized may act as notaries public.9 Notarization converts a private document
into a public document thus making that document admissible in evidence without further proof of its
authenticity.10 A notarial document is by law entitled to full faith and credit upon its face. Courts,
administrative agencies and the public at large must be able to rely upon the acknowledgment executed
by a notary public and appended to a private instrument.11
For this reason notaries public must observe with utmost care the basic requirements in the
performance of their duties.12 Otherwise, the confidence of the public in the integrity of this form of
conveyance would be undermined.13 Hence a notary public should not notarize a document unless the
persons who signed the same are the very same persons who executed and personally appeared before
him to attest to the contents and truth of what are stated therein.14 The purpose of this requirement is
to enable the notary public to verify the genuineness of the signature of the acknowledging party and to
ascertain that the document is the party's free act and deed.15

The notary public is further enjoined to record in his notarial registry the necessary information
regarding the document or instrument notarized and retain a copy of the document presented to him
for acknowledgment and certification especially when it is a contract.16 The notarial registry is a record
of the notary public's official acts. Acknowledged documents and instruments recorded in it are
considered public documents. If the document or instrument does not appear in the notarial records
and there is no copy of it therein, doubt is engendered that the document or instrument was not really
notarized, so that it is not a public document and cannot bolster any claim made based on this
document. Considering the evidentiary value given to notarized documents, the failure of the notary
public to record the document in his notarial registry is tantamount to falsely making it appear that the
document was notarized when in fact it was not.

We take note of respondent's admission in his Answer that he had affixed his signature in the purported
Deed of Absolute Sale but he did not enter it in his notarial registry. This is clearly in violation of the
Notarial Law for which he must be disciplined.

Respondent alleges that he merely signed the Deed of Absolute Sale inadvertently and that his signature
was procured through mistake, fraud, undue influence or excusable negligence as he relied on the
assurances of Manuel A. Bernardo, a kababayan from Pampanga, that the document would not be used
for any illegal purpose.

We cannot honor, much less give credit to this allegation. That respondent notarized the document out
of sympathy for his kababayan is not a legitimate excuse. It is appalling that respondent did away with
the basics of notarial procedure in order to accommodate the alleged need of a friend and client. In
doing so, he displayed a decided lack of respect for the solemnity of an oath in a notarial document. He
also exhibited his clear ignorance of the importance of the office of a notary public. Not only did he
violate the Notarial Law, he also did so without thinking of the possible damage that might result from
its non-observance.

The principal function of a notary public is to authenticate documents. When a notary public certifies to
the due execution and delivery of the document under his hand and seal he gives the document the
force of evidence. Indeed, one of the purposes of requiring documents to be acknowledged before a
notary public, in addition to the solemnity which should surround the execution and delivery of
documents, is to authorize such documents to be given without further proof of their execution and
delivery.17 Where the notary public is a lawyer, a graver responsibility is placed upon him by reason of
his solemn oath to obey the laws and to do no falsehood or consent to the doing of any.18 Failing in this,
he must accept the consequences of his unwarranted actions.

From his admissions we find that Atty. Mario G. Ramos failed to exercise the due diligence required of
him in the performance of the duties of notary public. We do not agree however that his negligence
should merit disbarment, which is the most severe form of disciplinary sanction. Disbarment should
never be imposed unless it is evidently clear that the lawyer, by his serious misconduct, should no longer
remain a member of the bar. Removal from the bar should not really be decreed when any punishment
less severe - reprimand, temporary suspension or fine - would accomplish the end desired.19 Under the
circumstances, imposing sanctions decreed under the Notarial Law and suspension from the practice of
law would suffice.

WHEREFORE, for lack of diligence in the observance of the Notarial Law, the commission of respondent
Atty. Mario G. Ramos as Notary Public, if still existing, is REVOKED and thereafter Atty. Ramos should be
DISQUALIFIED from reappointment to the office of Notary Public.

Respondent Atty. Mario G. Ramos is also SUSPENDED from the practice of law for a period of six (6)
months effective immediately. He is DIRECTED to report to this Court his receipt of this Decision to
enable it to determine when his suspension shall have taken effect.

The Clerk of Court of this Court is DIRECTED to immediately circularize this Decision for the proper
guidance of all concerned.

Let copies of this Decision be furnished the Office of the Bar Confidant and the Integrated Bar of the
Philippines.

SO ORDERED.

Mendoza, and Corona, J

[A.C. No. 6294. November 17, 2004]

ATTY. MINIANO B. DELA CRUZ, complainant, vs. ATTY. ALEJANDRO P. ZABALA, respondent.
RESOLUTION
QUISUMBING, J.:

In his Letter-Complaint for Disbarment filed before the Committee on Bar Discipline of the Integrated
Bar of the Philippines, complainant Atty. Miniano B. Dela Cruz charged respondent, Atty. Alejandro P.
Zabala, for violating his oath as a notary public.

Complainant alleged that respondent notarized with unknown witnesses, a fake deed of sale allegedly
executed by two dead people, in gross violation of his oath as a Commissioned Notary Public in Quezon
City.[1]

Complainant averred that he was retained by a certain Demetrio C. Marero last December 21, 1996, to
finance and undertake the filing of a Petition for the Issuance of a Second Duplicate Original of the
Owners copy of Original Certificate of Title (OCT) No. 4153, in the names of Sps. Pedro Sumulong and
Cirila Tapales before the Regional Trial Court of Antipolo City, Branch 72. The court issued an Order
approving the said petition on March 10, 1997.[2]
On May 20, 1997, complainant purchased the said property from Marero and had the title transferred to
him and his wife. OCT No. 4153 was then cancelled and replaced by Transfer Certificate of Title (TCT) No.
330000.[3]

The next day, complainant requested a certain Mrs. Adoracion Losloso and Mr. Nestor Aguirre to
register the title in the formers name at the Assessors Office of Antipolo City. However, they were
unable to do so because the property was already registered in the name of Antipolo Properties, Inc.,
under TCT No. N-107359.[4]

On May 27, 1997, respondent notarized a Deed of Absolute Sale over the land covered by OCT No. 4153,
executed by Cirila Tapales and Pedro Sumulong in favor of the complainant and his wife.[5]

On December 9, 1997, Mr. Marero filed a Complaint for Reconveyance of Title of the land, subject of the
Deed of Sale which was notarized by respondent, with damages against the complainant and his wife.
The Deed of Sale was the same document Marero used when he filed a complaint for Estafa thru
Falsification of Public Document docketed as I.S. No. 98-16357 before the Quezon City Prosecutors
Office and in a disbarment case docketed as Adm. Case No. 4963 against complainant.[6]

Purportedly, to clear his name, complainant filed this complaint for disbarment against respondent.
According to complainant, respondent notarized an irregular document where one of the parties to the
transaction was already dead, grossly violating his oath as a notary public.[7]

The IBP then required the respondent to file his answer to the said allegations.

Respondent, in his Answer alleged that as a notary, he did not have to go beyond the documents
presented to him for notarization. In notarial law, he explains, the minimum requirements to notarize a
document are the presence of the parties and their presentation of their community tax certificate. As
long as these requirements are met, the documents may be notarized. Furthermore, he adds, when he
notarized the Deed of Sale, he had no way of knowing whether the persons who appeared before him
were the real owners of the land or were merely poseurs.[8]

Thereafter, the parties were ordered to appear before the IBP Commission on Bar Discipline on July 31,
2001 and August 21, 2001, and required to submit their position papers.

The IBP Commission on Bar Discipline, in its Report dated September 29, 2003, recommended that
respondent be reprimanded for violating Canon 5 of the Code of Professional Responsibility.[9] The
allegations with respect to the prayer for disbarment were recommended for dismissal for insufficiency
of evidence. The Commissioner held that complainant failed to establish by convincing proof that
respondent had to be disbarred because of his notarial negligence. The alleged failures of respondent
did not indicate a clear intent to engage in unlawful, dishonest, immoral or deceitful conduct, according
to the Commissions Report.

Noteworthy, however, respondent did not deny that he notarized the cited Deed of Sale under the
circumstances alleged by complainant. It appears that there was negligence on respondents part which,
in our view, is quite serious. Thus, we cannot conclude that he did not violate the Notarial Law,[10] and
our rules regarding Notarial Practice.[11] Nor could we agree that, as recommended by the IBP, he
should only be reprimanded. At least his commission as Notary Public should be revoked and for two
years he should be disqualified from being commissioned as such.
The IBP noted that on its face, the Deed of Sale was not executed by the purported vendee and that only
Pedro Sumulong appeared and executed the deed even though the property was co-owned by Pedro
Sumulong and Cirila Tapales. In addition, a copy of the title was not attached to the said Deed of Sale
when it was presented for notarization. The aforementioned circumstances should have alerted
respondent. Given the ease with which community tax certificates are obtained these days, respondent
should have been more vigilant in ascertaining the identity of the persons who appeared before him.

We have empathically stressed that notarization is not an empty, meaningless routinary act. It is
invested with substantive public interest. It must be underscored that the notarization by a notary
public converts a private document into a public document, making that document admissible in
evidence without further proof of authenticity thereof. A notarial document is, by law, entitled to full
faith and credit upon its face. For this reason, a notary public must observe with utmost care the basic
requirements in the performance of their duties; otherwise, the confidence of the public in the integrity
of this form of conveyance would be undermined.[12]

Section 1 of Public Act No. 2103 provides,

...

(a) The acknowledgment shall be made before a notary public or an officer duly authorized by law of the
country to take acknowledgments of instruments or documents in the place where the act is done. The
notary public or the officer taking the acknowledgment shall certify that the person acknowledging the
instrument or document is known to him and that he is the same person who executed it, and
acknowledged that the same is his free act and deed. The certificate shall be made under his official
seal, if he is by law required to keep a seal, and if not, his certificate shall so state. [Emphasis ours.]

A notary public should not notarize a document unless the persons who signed the same are the very
same persons who executed and personally appeared before him to attest to the contents and the truth
of what are stated therein. These acts of the affiants cannot be delegated because what are stated
therein are facts they have personal knowledge of and are personally sworn to. Otherwise, their
representatives names should appear in the said documents as the ones who executed the same.[13]

The function of a notary public is, among others, to guard against any illegal or immoral
arrangements.[14] By affixing his notarial seal on the instrument, he converted the Deed of Absolute
Sale, from a private document into a public document. In doing so, respondent, in effect, proclaimed to
the world that (1) all the parties therein personally appeared before him; (2) they are all personally
known to him; (3) they were the same persons who executed the instruments; (4) he inquired into the
voluntariness of execution of the instrument; and (5) they acknowledged personally before him that
they voluntarily and freely executed the same.[15] As a lawyer commissioned to be a notary public,
respondent is mandated to discharge his sacred duties with faithful observance and utmost respect for
the legal solemnity of an oath in an acknowledgment or jurat.[16] Simply put, such responsibility is
incumbent upon him, he must now accept the commensurate consequences of his professional
indiscretion. His act of certifying under oath an irregular Deed of Absolute Sale without ascertaining the
identities of the persons executing the same constitutes gross negligence in the performance of duty as
a notary public.
WHEREFORE, this Court finds respondent Atty. Alejandro P. Zabala GUILTY of gross negligence in his
conduct as a notary public. His notarial commission, if still existing, is hereby REVOKED and he is
DISQUALIFIED from being commissioned as a notary public for a period of two (2) years. He is DIRECTED
to report the date of his receipt of this Resolution to the Court within five (5) days from such receipt.
Further, he is ordered to SHOW CAUSE why he should not be subject to disciplinary action as a member
of the Bar.

Let copies of this Resolution be furnished to all the courts of the land as well as the Integrated Bar of the
Philippines, and the Office of the Bar Confidant. Let this Resolution be also made of record in the
personal files of the respondent.

SO ORDERED.

MANUEL L. LEE, A.C. No. 5281

Complainant,
Present:
PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA and
LEONARDO-DE CASTRO, JJ.

ATTY. REGINO B. TAMBAGO,

Respondent. Promulgated:
February 12, 2008
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

RESOLUTION
CORONA, J.:

In a letter-complaint dated April 10, 2000, complainant Manuel L. Lee charged respondent Atty. Regino
B. Tambago with violation of the Notarial Law and the ethics of the legal profession for notarizing a
spurious last will and testament.

In his complaint, complainant averred that his father, the decedent Vicente Lee, Sr., never executed the
contested will. Furthermore, the spurious will contained the forged signatures of Cayetano Noynay and
Loreto Grajo, the purported witnesses to its execution.

In the said will, the decedent supposedly bequeathed his entire estate to his wife Lim Hock Lee, save for
a parcel of land which he devised to Vicente Lee, Jr. and Elena Lee, half-siblings of complainant.

The will was purportedly executed and acknowledged before respondent on June 30, 1965.[1]
Complainant, however, pointed out that the residence certificate[2] of the testator noted in the
acknowledgment of the will was dated January 5, 1962.[3] Furthermore, the signature of the testator
was not the same as his signature as donor in a deed of donation[4] (containing his purported genuine
signature). Complainant averred that the signatures of his deceased father in the will and in the deed of
donation were in any way (sic) entirely and diametrically opposed from (sic) one another in all
angle[s].[5]

Complainant also questioned the absence of notation of the residence certificates of the purported
witnesses Noynay and Grajo. He alleged that their signatures had likewise been forged and merely
copied from their respective voters affidavits.

Complainant further asserted that no copy of such purported will was on file in the archives division of
the Records Management and Archives Office of the National Commission for Culture and the Arts
(NCCA). In this connection, the certification of the chief of the archives division dated September 19,
1999 stated:

Doc. 14, Page No. 4, Book No. 1, Series of 1965 refers to an AFFIDAVIT executed by BARTOLOME
RAMIREZ on June 30, 1965 and is available in this Office[s] files.[6]

Respondent in his comment dated July 6, 2001 claimed that the complaint against him contained false
allegations: (1) that complainant was a son of the decedent Vicente Lee, Sr. and (2) that the will in
question was fake and spurious. He alleged that complainant was not a legitimate son of Vicente Lee, Sr.
and the last will and testament was validly executed and actually notarized by respondent per
affidavit[7] of Gloria Nebato, common-law wife of Vicente Lee, Sr. and corroborated by the joint
affidavit[8] of the children of Vicente Lee, Sr., namely Elena N. Lee and Vicente N. Lee, Jr. xxx.[9]

Respondent further stated that the complaint was filed simply to harass him because the criminal case
filed by complainant against him in the Office of the Ombudsman did not prosper.

Respondent did not dispute complainants contention that no copy of the will was on file in the archives
division of the NCCA. He claimed that no copy of the contested will could be found there because none
was filed.

Lastly, respondent pointed out that complainant had no valid cause of action against him as he
(complainant) did not first file an action for the declaration of nullity of the will and demand his share in
the inheritance.

In a resolution dated October 17, 2001, the Court referred the case to the Integrated Bar of the
Philippines (IBP) for investigation, report and recommendation.[10]

In his report, the investigating commissioner found respondent guilty of violation of pertinent provisions
of the old Notarial Law as found in the Revised Administrative Code. The violation constituted an
infringement of legal ethics, particularly Canon 1[11] and Rule 1.01[12] of the Code of Professional
Responsibility (CPR).[13] Thus, the investigating commissioner of the IBP Commission on Bar Discipline
recommended the suspension of respondent for a period of three months.

The IBP Board of Governors, in its Resolution No. XVII-2006-285 dated May 26, 2006, resolved:

[T]o ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, with modification, the Report and
Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this
Resolution as Annex A; and, finding the recommendation fully supported by the evidence on record and
the applicable laws and rules, and considering Respondents failure to comply with the laws in the
discharge of his function as a notary public, Atty. Regino B. Tambago is hereby suspended from the
practice of law for one year and Respondents notarial commission is Revoked and Disqualified from
reappointment as Notary Public for two (2) years.[14]

We affirm with modification.

A will is an act whereby a person is permitted, with the formalities prescribed by law, to control to a
certain degree the disposition of his estate, to take effect after his death.[15] A will may either be
notarial or holographic.

The law provides for certain formalities that must be followed in the execution of wills. The object of
solemnities surrounding the execution of wills is to close the door on bad faith and fraud, to avoid
substitution of wills and testaments and to guarantee their truth and authenticity.[16]

A notarial will, as the contested will in this case, is required by law to be subscribed at the end thereof
by the testator himself. In addition, it should be attested and subscribed by three or more credible
witnesses in the presence of the testator and of one another.[17]

The will in question was attested by only two witnesses, Noynay and Grajo. On this circumstance alone,
the will must be considered void.[18] This is in consonance with the rule that acts executed against the
provisions of mandatory or prohibitory laws shall be void, except when the law itself authorizes their
validity.

The Civil Code likewise requires that a will must be acknowledged before a notary public by the testator
and the witnesses.[19] The importance of this requirement is highlighted by the fact that it was
segregated from the other requirements under Article 805 and embodied in a distinct and separate
provision.[20]

An acknowledgment is the act of one who has executed a deed in going before some competent officer
or court and declaring it to be his act or deed. It involves an extra step undertaken whereby the
signatory actually declares to the notary public that the same is his or her own free act and deed.[21]
The acknowledgment in a notarial will has a two-fold purpose: (1) to safeguard the testators wishes long
after his demise and (2) to assure that his estate is administered in the manner that he intends it to be
done.

A cursory examination of the acknowledgment of the will in question shows that this particular
requirement was neither strictly nor substantially complied with. For one, there was the conspicuous
absence of a notation of the residence certificates of the notarial witnesses Noynay and Grajo in the
acknowledgment. Similarly, the notation of the testators old residence certificate in the same
acknowledgment was a clear breach of the law. These omissions by respondent invalidated the will.

As the acknowledging officer of the contested will, respondent was required to faithfully observe the
formalities of a will and those of notarization. As we held in Santiago v. Rafanan:[22]

The Notarial Law is explicit on the obligations and duties of notaries public. They are required to certify
that the party to every document acknowledged before him had presented the proper residence
certificate (or exemption from the residence tax); and to enter its number, place of issue and date as
part of such certification.

These formalities are mandatory and cannot be disregarded, considering the degree of importance and
evidentiary weight attached to notarized documents.[23] A notary public, especially a lawyer,[24] is
bound to strictly observe these elementary requirements.

The Notarial Law then in force required the exhibition of the residence certificate upon notarization of a
document or instrument:

Section 251. Requirement as to notation of payment of [cedula] residence tax. Every contract, deed, or
other document acknowledged before a notary public shall have certified thereon that the parties
thereto have presented their proper [cedula] residence certificate or are exempt from the [cedula]
residence tax, and there shall be entered by the notary public as a part of such certificate the number,
place of issue, and date of each [cedula] residence certificate as aforesaid.[25]

The importance of such act was further reiterated by Section 6 of the Residence Tax Act[26] which
stated:

When a person liable to the taxes prescribed in this Act acknowledges any document before a notary
public xxx it shall be the duty of such person xxx with whom such transaction is had or business done, to
require the exhibition of the residence certificate showing payment of the residence taxes by such
person xxx.

In the issuance of a residence certificate, the law seeks to establish the true and correct identity of the
person to whom it is issued, as well as the payment of residence taxes for the current year. By having
allowed decedent to exhibit an expired residence certificate, respondent failed to comply with the
requirements of both the old Notarial Law and the Residence Tax Act. As much could be said of his
failure to demand the exhibition of the residence certificates of Noynay and Grajo.

On the issue of whether respondent was under the legal obligation to furnish a copy of the notarized
will to the archives division, Article 806 provides:

Art. 806. Every will must be acknowledged before a notary public by the testator and the witness. The
notary public shall not be required to retain a copy of the will, or file another with the office of the Clerk
of Court. (emphasis supplied)

Respondents failure, inadvertent or not, to file in the archives division a copy of the notarized will was
therefore not a cause for disciplinary action.

Nevertheless, respondent should be faulted for having failed to make the necessary entries pertaining to
the will in his notarial register. The old Notarial Law required the entry of the following matters in the
notarial register, in chronological order:
1. nature of each instrument executed, sworn to, or acknowledged before him;
2. person executing, swearing to, or acknowledging the instrument;
3. witnesses, if any, to the signature;
4. date of execution, oath, or acknowledgment of the instrument;
5. fees collected by him for his services as notary;
6. give each entry a consecutive number; and
7. if the instrument is a contract, a brief description of the substance of the instrument.[27]

In an effort to prove that he had complied with the abovementioned rule, respondent contended that
he had crossed out a prior entry and entered instead the will of the decedent. As proof, he presented a
photocopy of his notarial register. To reinforce his claim, he presented a photocopy of a certification[28]
stating that the archives division had no copy of the affidavit of Bartolome Ramirez.

A photocopy is a mere secondary evidence. It is not admissible unless it is shown that the original is
unavailable. The proponent must first prove the existence and cause of the unavailability of the
original,[29] otherwise, the evidence presented will not be admitted. Thus, the photocopy of
respondents notarial register was not admissible as evidence of the entry of the execution of the will
because it failed to comply with the requirements for the admissibility of secondary evidence.

In the same vein, respondents attempt to controvert the certification dated September 21, 1999[30]
must fail. Not only did he present a mere photocopy of the certification dated March 15, 2000;[31] its
contents did not squarely prove the fact of entry of the contested will in his notarial register.

Notaries public must observe with utmost care[32] and utmost fidelity the basic requirements in the
performance of their duties, otherwise, the confidence of the public in the integrity of notarized deeds
will be undermined.[33]

Defects in the observance of the solemnities prescribed by law render the entire will invalid. This
carelessness cannot be taken lightly in view of the importance and delicate nature of a will, considering
that the testator and the witnesses, as in this case, are no longer alive to identify the instrument and to
confirm its contents.[34] Accordingly, respondent must be held accountable for his acts. The validity of
the will was seriously compromised as a consequence of his breach of duty.[35]

In this connection, Section 249 of the old Notarial Law provided:

Grounds for revocation of commission. The following derelictions of duty on the part of a notary public
shall, in the discretion of the proper judge of first instance, be sufficient ground for the revocation of his
commission:

xxx xxx xxx

(b) The failure of the notary to make the proper entry or entries in his notarial register touching his
notarial acts in the manner required by law.

xxx xxx xxx

(f) The failure of the notary to make the proper notation regarding cedula certificates.[36]
These gross violations of the law also made respondent liable for violation of his oath as a lawyer and
constituted transgressions of Section 20 (a), Rule 138 of the Rules of Court[37] and Canon 1[38] and Rule
1.01[39] of the CPR.

The first and foremost duty of a lawyer is to maintain allegiance to the Republic of the Philippines,
uphold the Constitution and obey the laws of the land.[40] For a lawyer is the servant of the law and
belongs to a profession to which society has entrusted the administration of law and the dispensation of
justice.[41]

While the duty to uphold the Constitution and obey the law is an obligation imposed on every citizen, a
lawyer assumes responsibilities well beyond the basic requirements of good citizenship. As a servant of
the law, a lawyer should moreover make himself an example for others to emulate.[42] Being a lawyer,
he is supposed to be a model in the community in so far as respect for the law is concerned.[43]

The practice of law is a privilege burdened with conditions.[44] A breach of these conditions justifies
disciplinary action against the erring lawyer. A disciplinary sanction is imposed on a lawyer upon a
finding or acknowledgment that he has engaged in professional misconduct.[45] These sanctions meted
out to errant lawyers include disbarment, suspension and reprimand.

Disbarment is the most severe form of disciplinary sanction.[46] We have held in a number of cases that
the power to disbar must be exercised with great caution[47] and should not be decreed if any
punishment less severe such as reprimand, suspension, or fine will accomplish the end desired.[48] The
rule then is that disbarment is meted out only in clear cases of misconduct that seriously affect the
standing and character of the lawyer as an officer of the court.[49]

Respondent, as notary public, evidently failed in the performance of the elementary duties of his office.
Contrary to his claims that he exercised his duties as Notary Public with due care and with due regard to
the provision of existing law and had complied with the elementary formalities in the performance of his
duties xxx, we find that he acted very irresponsibly in notarizing the will in question. Such recklessness
warrants the less severe punishment of suspension from the practice of law. It is, as well, a sufficient
basis for the revocation of his commission[50] and his perpetual disqualification to be commissioned as
a notary public.[51]

WHEREFORE, respondent Atty. Regino B. Tambago is hereby found guilty of professional misconduct. He
violated (1) the Lawyers Oath; (2) Rule 138 of the Rules of Court; (3) Canon 1 and Rule 1.01 of the Code
of Professional Responsibility; (4) Art. 806 of the Civil Code and (5) the provisions of the old Notarial
Law.

Atty. Regino B. Tambago is hereby SUSPENDED from the practice of law for one year and his notarial
commission REVOKED. Because he has not lived up to the trustworthiness expected of him as a notary
public and as an officer of the court, he is PERPETUALLY DISQUALIFIED from reappointment as a notary
public.
Let copies of this Resolution be furnished to all the courts of the land, the Integrated Bar of the
Philippines and the Office of the Bar Confidant, as well as made part of the personal records of
respondent.

You are here: Home 2013 July Case Digest: Lee v. Tambago (544 SCRA 393)

SECOND DIVISION

DOLORES L. DELA CRUZ, A.C. No. 7781

MILAGROS L. PRINCIPE,
NARCISA L. FAUSTINO, Present:
JORGE V. LEGASPI, and
JUANITO V. LEGASPI, QUISUMBING, J., Chairperson,
Complainants, CARPIO MORALES,
TINGA,
VELASCO, JR., and
- versus - BRION, JJ.
Promulgated:
ATTY. JOSE R. DIMAANO, JR.,
Respondent. September 12, 2008
x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

In their complaint for disbarment against respondent Atty. Jose R. Dimaano, Jr., Dolores L. Dela Cruz,
Milagros L. Principe, Narcisa L. Faustino, Jorge V. Legaspi, and Juanito V. Legaspi alleged that on July 16,
2004, respondent notarized a document denominated as Extrajudicial Settlement of the Estate with
Waiver of Rights purportedly executed by them and their sister, Zenaida V.L. Navarro. Complainants
further alleged that: (1) their signatures in this document were forged; (2) they did not appear and
acknowledge the document on July 16, 2004 before respondent, as notarizing officer; and (3) their
purported community tax certificates indicated in the document were not theirs.

According to complainants, respondent had made untruthful statements in the acknowledgment

portion of the notarized document when he made it appear, among other things, that complainants
personally came and appeared before him and that they affixed their signatures on the document in his
presence. In the process, complainants added, respondent effectively enabled their sister, Navarro, to
assume full ownership of their deceased parents property in Tibagan, San Miguel, Bulacan, covered by
Transfer Certificate of Title No. T-303936 and sell the same to the Department of Public Works and
Highways.

In his answer, respondent admitted having a hand in the preparation of the document in question, but
admitted having indeed notarized it. He explained that he notarized [the] document in good faith relying
on the representation and assurance of Zenaida Navarro that the signatures and the community tax
certificates appearing in the document were true and correct. Navarro would not, according to
respondent, lie to him having known, and being neighbors of, each other for 30 years. Finally,
respondent disclaimed liability for any damage or injury considering that the falsified document had
been revoked and canceled.

In his Report and Recommendation, the Investigating Commissioner of the Office of the Commission on
Bar Discipline, Integrated Bar of the Philippines (IBP), found the following as established: (1) the
questioned document bore the signatures and community tax certificates of, and purports to have been
executed by, complainants and Navarro; (2) respondent indeed notarized the questioned document on
July 16, 2004; (3) complainants did not appear and acknowledge the document before respondent on
July 16, 2004; (4) respondent notarized the questioned document only on Navarros representation that
the signatures appearing and community tax certificates were true and correct; and (5) respondent did
not ascertain if the purported signatures of each of the complainants appearing in the document
belonged to them.

The Commission concluded that with respondents admission of having notarized the document in
question against the factual backdrop as thus established, a clear case of falsification and violation of
the Notarial Law had been committed when he stated in the Acknowledgment that:
Before me, on this 16th day of July 16, 2004 at Manila, personally came and appeared the above-named
persons with their respective Community Tax Certificates as follows:
xxxx

who are known to me to be the same persons who executed the foregoing instrument and they
acknowledge to me that the same is their own free act and deed. x x x

For the stated infraction, the Commission recommended, conformably with the Courts ruling in
Gonzales v. Ramos,[1] that respondent be suspended from the practice of law for one (1) year; that his
notarial commission, if still existing, be revoked; and that he be disqualified for reappointment as notary
public for two (2) years. On September 28, 2007, the IBP Board of Governors passed Resolution No.
XVIII-2007-147, adopting and approving the report and recommendation of the Commission.

We agree with the recommendation of the Commission and the premises holding it together. It bears
reiterating that notaries public should refrain from affixing their signature and notarial seal on a
document unless the persons who signed it are the same individuals who executed and personally
appeared before the notaries public to attest to the truth of what are stated therein, for under Section 1
of Public Act No. 2103 or the Notarial Law, an instrument or document shall be considered authentic if
the acknowledgment is made in accordance with the following requirements:

(a) The acknowledgment shall be made before a notary public or an officer duly authorized by law of the
country to take acknowledgments of instruments or documents in the place where the act is done. The
notary public or the officer taking the acknowledgment shall certify that the person acknowledging the
instrument or document is known to him and that he is the same person who executed it, and
acknowledged that the same is his free act and deed. The certificate shall be made under his official
seal, if he is by law required to keep a seal, and if not, his certificate shall so state.[2]

Without the appearance of the person who actually executed the document in question, notaries public
would be unable to verify the genuineness of the signature of the acknowledging party and to ascertain
that the document is the partys free act or deed.[3] Furthermore, notaries public are required by the
Notarial Law to certify that the party to the instrument has acknowledged and presented before the
notaries public the proper residence certificate (or exemption from the residence certificate) and to
enter its number, place, and date of issue as part of certification.[4] Rule II, Sec. 12 of the 2004 Rules on
Notarial Practice[5] now requires a party to the instrument to present competent evidence of identity.
Sec. 12 provides:
Sec. 12. Competent Evidence of Identity.The phrase competent evidence of identity refers to the
identification of an individual based on:

(a) at least one current identification document issued by an official agency bearing the photograph and
signature of the individual, such as but not limited to, passport, drivers license, Professional Regulations
Commission ID, National Bureau of Investigation clearance, police clearance, postal ID, voters ID,
Barangay certification, Government Service Insurance System (GSIS) e-card, Social Security System (SSS)
card, Philhealth card, senior citizen card, Overseas Workers Welfare Administration (OWWA) ID, OFW
ID, seamans book, alien certificate of registration/immigrant certificate of registration, government
office ID, certificate from the National Council for the Welfare of Disabled Persons (NCWDP),
Department of Social Welfare and Development certification [as amended by A.M. No. 02-8-13-SC dated
February 19, 2008]; or

(b) the oath or affirmation of one credible witness not privy to the instrument, document or transaction
who is personally known to the notary public and who personally knows the individual, or of two
credible witnesses neither of whom is privy to the instrument, document or transaction who each
personally knows the individual and shows to the notary public documentary identification.

One last note. Lawyers commissioned as notaries public are mandated to discharge with fidelity the
duties of their offices, such duties being dictated by public policy and impressed with public interest. It
must be remembered that notarization is not a routinary, meaningless act, for notarization converts a
private document to a public instrument, making it admissible in evidence without the necessity of
preliminary proof of its authenticity and due execution.[6] A notarized document is by law entitled to
full credit upon its face and it is for this reason that notaries public must observe the basic requirements
in notarizing documents. Otherwise, the confidence of the public on notorized documents will be
eroded.

WHEREFORE, for breach of the Notarial Law, the notarial commission of respondent Atty. Jose R.
Dimaano, Jr., if still existing, is REVOKED. He is DISQUALIFIED from being commissioned as notary public
for a period of two (2) years and SUSPENDED from the practice of law for a period of one (1) year,
effective upon receipt of a copy of this Decision, with WARNING that a repetition of the same negligent
act shall be dealt with more severely.

Let all the courts, through the Office of the Court Administrator, as well as the IBP and the Office of the
Bar Confidant, be notified of this Decision and be it entered into respondents personal record.

SO ORDERED.

FIRST DIVISION

G.R. No. L-46892 September 30, 1981

HEIRS OF AMPARO DEL ROSARIO, plaintiffs-appellees,
vs.
AURORA O. SANTOS, JOVITA SANTOS GONZALES, ARNULFO O. SANTOS, ARCHIMEDES O. SANTOS,
ERMELINA SANTOS RAVIDA, and ANDRES O. SANTOS, JR., defendants-appellants.

GUERRERO, J.:

The Court of Appeals, 1 in accordance with Section 31 of the Judiciary Act of 1948, as amended, certified
to Us the appeal docketed as CA-G.R. No. 56674-R entitled "Amparo del Rosario, plaintiff-appellee, vs.
Spouses Andres Santos and Aurora Santos, defendants-appellants," as only questions of law are
involved.

On January 14, 1974, Amparo del Rosario filed a complaint against the spouses Andres F. Santos and
Aurora O. Santos, for specific performance and damages allegedly for failure of the latter to execute the
Deed of Confirmation of Sale of an undivided 20,000 square meters of land, part of Lot 1, Psu-206650,
located at Barrio Sampaloc, Tanay, Rizal, in malicious breach of a Deed of Sale (Exhibit A or 1) dated
September 28, 1964.

Amparo del Rosario died on Sept. 21, 1980 so that she is now substituted by the heirs named in her will
still undergoing probate proceedings. Andres F. Santos also died, on Sept. 5, 1980, and he is substituted
by the following heirs: Jovita Santos Gonzales, Arnulfo O. Santos, Archimedes O. Santos, Germelina
Santos Ravida, and Andres O. Santos, Jr.

The Deed of Sale (Exh. A or 1) is herein reproduced below:

DEED OF SALE

KNOW ALL MEN BY THESE PRESENTS:

I, ANDRES F. SANTOS, of legal age, married to Aurora 0. Santos, Filipino and resident cf San Dionisio,
Paranaque, Rizal, Philippines, for and in consideration of the sum of TWO THOUSAND (P 2,000.00)
PESOS, Philippine Currency, the receipt whereof is hereby acknowledged, do hereby SELLS, CONVEYS,
and TRANSFERS (sic) unto Amparo del Rosario, of legal age, married to Fidel del Rosario but with legal
separation, Filipino and resident of San Dionisio, Paranaque, Rizal, Philippines that certain 20,000 square
meters to be segregated from Lot 1 of plan Psu-206650 along the southeastern portion of said lot, which
property is more particularly described as follows:

A parcel of land (Lot 1 as shown on plan Psu-206650, situated in the Barrio of Sampaloc, Municipality of
Tanay, Province of Rizal. Bounded on the SW., along lines 1-2-3, by Lot 80 of Tanay Public Land
Subdivision, Pls-39; on the NW., along lines 3-4-5, by Lot 2; and along lines 5-6-7-8-9-10-11, by Lot 6; on
the NE., along lines 11-12-13, by Lot 3: and along lines 13-1415, by Lot 4, all of plan Psu-206650; and on
the SE., along line 15-1, by Lot 5 of plan Psu- 206650 ... ; containing an area of ONE HUNDRED EIGHTY
ONE THOUSAND FOUR HUNDRED TWENTY (181,420) SQUARE METERS. All points referred to are
indicated on the plan and are marked on the ground as follows: ...
of which above-described property, I own one-half (1/2) interest thereof being my attorney's fee, and
the said 20,000 square meters will be transferred unto the VENDEE as soon as the title thereof has been
released by the proper authority or authorities concerned:

That the parties hereto hereby agree that the VENDOR shall execute a Deed of Confirmation of Deed of
Sale in favor of the herein VENDEE as soon as the title has been released and the subdivision plan of said
Lot 1 has been approved by the Land Registration Commissioner.

IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of September, 1964, in the City of
Manila, Philippines.

s/ ANDRES F. SANTOS t/ ANDRES F. SANTOS

With My Marital Consent:

s/ Aurora O. Santos (Wife) t/ Aurora O. Santos (Wife)

SIGNED IN THE PRESENCE OF: s/ Felicitas C. Moro s/ Corona C. Venal

REPUBLIC OF THE PHILIPPINES) ) SS.

BEFORE ME, a Notary Public for and in Rizal, Philippines, personally appeared Andres F. Santos, with Res.
Cert. No. 4500027 issued at Paranaque, Rizal, on Jan. 9, 1964, B-0935184 issued at Paranaque, Rizal on
April 15, 1964, and Aurora 0. Santos, with Res. Cert. No. A-4500028 issued at Paranaque, Rizal, on Jan. 9,
1964, giving her marital consent to this instrument, both of whom are known to me and to me known to
be the same persons who executed the foregoing instruments and they acknowledged to me that the
same is their free act and voluntary deed.

IN WITNESS WHEREOF, I have hereunto signed this instrument and affixed my notarial seal this lst day of
October, 1964, in Pasig, Rizal, Philippines.

Doc. No. 1792; Page No. 85; Book No. 19; Series of 1964.

s/ FLORENCIO LANDRITO t/ FLORENCIO LANDRITO

NOTARY PUBLIC Until December 31, 1965 2

Plaintiff claimed fulfillment of the conditions for the execution of the Deed of Confirmation of Sale,
namely: the release of the title of the lot and the approval of the subdivision plan of said lot by the Land
Registration Commission. She even enumerated the titles with their corresponding land areas derived by
defendants from the aforesaid lot, to wit:

(a) TCT 203580 30,205 sq. meters

(b) TCT 203581 19, 790 sq. meters

(c) TCT 167568 40,775 sq. meters

In a motion to dismiss, defendants pleaded, inter alia, the defenses of lack of jurisdiction of the court a
quo over the subject of the action and lack of cause of action allegedly because there was no allegation
as to the date of the approval of the subdivision plan, no specific statement that the titles therein
mentioned were curved out of Lot I and no clear showing when the demands were made on the
defendants. They likewise set up the defense of prescription allegedly because the deed of sale was
dated September 28, 1964 and supposedly ratified October 1, 1964 but the complaint was filed only on
January 14, 1974, a lapse of more than nine years when it should have been filed within five years from
1964 in accordance with Article 1149, New Civil Code.

Defendant also claimed that the demand set forth in the complaint has been waived, abandoned or
otherwise extinguished. It is alleged that the deed of sale was "only an accommodation graciously
extended, out of close friendship between the defendants and the plaintiff and her casual business
partner in the buy and sell of real estate, one Erlinda Cortez;" 3 that in order to allay the fears of plaintiff
over the non-collection of the debt of Erlinda Cortez to plaintiff in various sums exceeding P 2,000.00,
defendants, who were in turn indebted to Erlinda Cortez in the amount of P 2,000.00, voluntarily
offered to transfer to plaintiff their inexistent but expectant right over the lot in question, the same to
be considered as part payment of Erlinda Cortez' indebtedness; that as Erlinda Cortez later on paid her
creditor what was then due, the deed of sale had in effect been extinguished. Defendants thereby
characterized the said deed of sale as a mere tentative agreement which was never intended nor meant
to be ratified by and acknowledged before a notary public. In fact, they claimed that they never
appeared before Notary Public Florencio Landrito.

Finally, defendants alleged that the claim on which the action or suit is founded is unenforceable under
the statute of frauds and that the cause or object of the contract did not exist at the time of the
transaction.

After an opposition and a reply were filed by the respective parties, the Court a quo resolved to deny
the motion to dismiss of defendants. Defendants filed their answer with counterclaim interposing more
or less the same defenses but expounding on them further. In addition, they claimed that the titles
allegedly derived by them from Lot 1 of Annex A or I were cancelled and/or different from said Lot I and
that the deed of sale was simulated and fictitious, plaintiff having paid no amount to defendants; and
that the deed was entrusted to plaintiff's care and custody on the condition that the latter; (a) would
secure the written consent of Erlinda Cortez to Annex A or I as part payment of what she owed to
plaintiff; (b) would render to defendants true accounting of collections made from Erlinda showing in
particular the consideration of 2,000.00 of Annex A or I duly credited to Erlinda's account. 4

Plaintiff filed a reply and answer to counterclaim and thereafter a motion for summary judgment and/or
judgment on the pleadings on the ground that the defenses of defendants fail to tender an issue or the
same do not present issues that are serious enough to deserve a trial on the merits, 5 submitting on a
later date the affidavit of merits. Defendants filed their corresponding opposition to the motion for
summary judgment and/or judgment on the pleadings. Not content with the pleadings already
submitted to the Court, plaintiff filed a reply while defendants filed a supplemental opposition.

With all these pleadings filed by the parties in support of their respective positions, the Court a quo still
held in abeyance plaintiff's motion for summary judgment or judgment on the pleadings pending the
pre-trial of the case. At the pre-trial, defendants offered by way of compromise to pay plaintiff the sum
of P2,000.00, the consideration stated in the deed of sale. But the latter rejected the bid and insisted on
the delivery of the land to her. Thus, the pre-trial proceeded with the presentation by plaintiff of
Exhibits A to Q which defendants practically admitted, adopted as their own and marked as Exhibits 1 to
17. In addition, the latter offered Exhibit 18, which was their reply to plaintiff's letter of demand dated
December 21, 1973.

From the various pleadings filed in this case by plaintiff, together with the annexes and affidavits as well
as the exhibits offered in evidence at the pre-trial, the Court a quo found the following facts as having
been duly established since defendant failed to meet them with countervailing evidence:

In February, 1964, Teofilo Custodia owner of a parcel of unregistered land with an area of approximately
220,000 square meters in Barrio Sampaloc, Tanay, Rizal, hired Attorney Andres F. Santos "to cause the
survey of the above-mentioned property, to file registration proceedings in court, to appear and
represent him in all government office relative thereto, to advance all expenses for surveys, taxes to the
government, court fees, registration fees ... up to the issuance of title in the name" of Custodia. They
agreed that after the registration of the title in Custodio's name, and "after deducting all expenses from
the total area of the property," Custodio would assign and deliver to Santos "one-half (1/2) share of the
whole property as appearing in the certificate of title so issued." Exh. B or 2).

On March 22, 1964, Custodio's land was surveyed under plan Psu-226650 (Exh. D or 4). It was divided
into six (6) lots, one of which was a road lot. The total area of the property as surveyed was 211,083
square meters. The respective areas of the lots were as follows:

Lot 1

181,420 square meters

Lot 2

7,238 square meters

Lot 3

7,305 square meters

Lot 4

5,655 square meters

Lot 5

5,235 square meters

Road Lot 6

4,230 square meters

TOTAL

211,083 square meters

xxx xxx xxx

On December 27, 1965, a decree of registration No. N-108022 was issued in Land Registration Case No.
N-5023, of the Court of First Instance of Rizal, LRC Record No. N-27513, in favor of Teofilo Custodia
married to Miguela Perrando resident of Tanay, Rizal. On March 23, 1966, Original Certificate of Title No.
5134 (Exh. Q or 17) was issued to Custodio for Lots 1, 2, 3, 4 and 5, Psu- 206650, with a total area of
206,853 square meters. The areas of the five (5) lots were as follows:

Lot 1

181,420 square meters

Lot 2

7,238 square meters

Lot 3

7,305 square meters

Lot 4

5,655 square meters

Lot 5

5,235 square meters

In April to May, 1966, a consolidation-subdivision survey (LRC) Pcs-5273 (Exh. E or 5) was made on the
above lots converting them into six (6) new lots as follows:

xxx xxx xxx

Lot 1

20,000 square meters

Lot 2

40,775 square meters

Lot 3

50,000 square meters

Lot 4
40,775 square meters

Lot 5

50,000 square meters

Road Lot 6

5,303 square meters

TOTAL

206,853 square meters

On June 22, 1966, the consolidation-subdivision plan (LRC) Pcs-5273 (Exh. E or 5) was approved by the
Land Registration Commission and by the Court of First Instance of Rizal in an order dated July 2, 1966
(Entry No. 61037 T-167561, Exh. Q). Upon its registration, Custodio's O.C.T. No. 5134 (Exh. Q) was
cancelled and TCT Nos. 167561, 167562, 167563, 167564 (Exh. G), 167565 (Exh. H and 167566 were
issued for the six lots in the name of Custodio (Entry No. 61035, Exh. Q).

On June 23, 1966, Custodio conveyed to Santos Lots 4 and 5, Pcs-5273 with a total area of 90,775 square
meters (Exh. B or 2) described in Custodio's TCT No. 167564 (Exh. G or 7) and TCT No. 167565 (Exh. H or
8), plus a one-half interest in the Road Lot No. 6, as payment of Santos' attorney's fees and advances for
the registration of Custodio's land.

Upon registration of the deed of conveyance on July 5, 1966, Custodio's TCT Nos. 167564 and 167565
(Exhs. G and H) were cancelled. TCT No. 167568 (Exh. I or 9) for Lot 4 and TCT No. 167585 (Exh. J or 10)
for Lot 5 were issued to Santos.

On September 2, 1967, Santos' Lot 5, with an area of 50,000 square meters was subdivided into two (2)
lots, designated as Lots 5-A and 5-B in the plan Psd-78008 (Exh. F or 6), with the following areas:

Lot 5-A

30,205 square meters

Lot 5-B

19,795 square meters

TOTAL

50,000 square meters

Upon registration of Psd-78008 on October 3, 1967, Santos' TCT No. 167585 (Exh. J) was cancelled and
TCT No. 203578 for Lot 5- A and TCT No. 203579 for Lot 5-B were supposed to have been issued to
Santos (See Entry 6311 in Exh. J or 10). Actually, TCT No. 203580 was issued for Lot 5-A (Exh. K or 1 1),
and TCT No. 203581 for Lot 5-B (Exh. L or 12), both in the name of Andres F. Santos.
Out of Custodio's original Lot 1, Psu-206650, with an area of 181,420 square meters, Santos was given a
total of 90,775 square meters, registered in his name as of October 3, 1967 under three (3) titles,
namely:

TCT No. 167585 for

Lot 4 Pcs-5273

40,775 sq. m.

(Exh. J or 10)

TCT No. 203580 for

Lot 5-A Psd-78008

30,205 sq. m.

(Exh. K or 11)

TCT No. 203581 for

Lot 5-B Psd-78008

19,795 sq. m.

(Exh. L or 12)

90,775 sq.m.
plus one-half of the road lot, Lot 6, PCS-5273, with an area of 5,303 square meters, which is registered
jointly in the name of Santos and Custodio (Exh. B & E) 6

The court a quo thereupon concluded that there are no serious factual issues involved so the motion for
summary judgment may be properly granted. Thereafter, it proceeded to dispose of the legal issues
raised by defendants and rendered judgment in favor of plaintiff. The dispositive portion of the decision
states as follows:

WHEREFORE, defendants Andres F. Santos and Aurora Santos are ordered to execute and convey to
plaintiff Amparo del Rosario, within ten (10) days from the finality of this decision, 20,000 square meters
of land to be taken from the southeastern portion of either Lot 4, Pcs-5273, which has an area of 40,775
square meters, described in TCT No. 167568 (Exh. I or 9) of from their LOL 5-A. with an area of 30,205
square meters, described in TCI No. 203; O (Exh. K or 11). The expenses of segregating the 20,000 square
meters portion shall be borne fqually by the parties. rhe expenses for the execution and registration of
the sale shall be borne by the defendants (Art. 1487, Civil Code). Since the defendants compelled the
plaintiff to litigate and they failed to heed plainliff's just demand, they are further ordered to pay the
plaintiff the sum of P2,000.00 as attorney's fees and the costs of this action.

SO ORDERED. 7

Aggrieved by the aforesaid decision, the defendant's filed all appeal to the Court of Appeals submitting
for resolution seven assignments of errors, to wit:

I. The lower court erred in depriving the appellants of their right to the procedural due process.

II. The lower court erred in holding that the appellee's claim has not been extinguished.

III. The lower court erred in sustaining appellee's contention that there are no other unwritten
conditions between the appellants and the appellee except those express in Exh. "1" or "A", and that
Erlinda Cortez' conformity is not required to validate the appellants' obligation.

IV. The lower court erred in holding that Exh. "l" or "A" is not infirmed and expressed the true
intent of the parties.

V. The lower court erred in declaring that the appellants are co-owners of the lone registered
owner Teofilo Custodia.

VI. The lower court erred in ordering the appellants to execute and convey to the appellee 20,000
sq. m. of land to be taken from the southeastern portion of either their lot 4, Pcs-5273, which has an
area of 40,775 sq.m., described in T.C.T. No. 167568 (Exh. 9 or 1), or from their lot No. 5-A, with an area
of 30,205 sq.m. described in T.C.T. No. 203580 (Exh. 11 or K), the expenses of segregation to be borne
equally by the appellants and the appellee and the expenses of execution and registration to be borne
by the appellants.

VII. Thelowercourterredinorderingtheappellantstopayto the appellee the sum of P2,000. 00 as

attorney's fee and costs. 8
The first four revolve on the issue of the propriety of the rendition of summary judgment by the court a
quo, which concededly is a question of law. The last three assail the summary judgment itself.
Accordingly, the Court of Appeals, with whom the appeal was filed, certified the records of the case to
this Court for final determination.

For appellants herein, the rendition of summary judgment has deprived them of their right to
procedural due process. They claim that a trial on the merits is indispensable in this case inasmuch as
they have denied under oath all the material allegations in appellee's complaint which is based on a
written instrument entitled "Deed of Sale", thereby putting in issue the due execution of said deed.

Appellants in their opposition to the motion for summary judgment and/or judgment on the pleadings,
however, do not deny the genuineness of their signatures on the deed of sale.

(Par. 3 of said Motion, p. 101, Record on Appeal). They do not contest the words and figures in said deed
except in the acknowledgment portion thereof where certain words were allegedly cancelled and
changed without their knowledge and consent and where, apparently, they appeared before Notary
Public Florencio Landrito when, in fact, they claimed that they did not. In effect, there is an admission of
the due execution and genuineness of the document because by the admission of the due execution of a
document is meant that the party whose signature it bears admits that voluntarily he signed it or that it
was signed by another for him and with his authority; and the admission of the genuineness of the
document is meant that the party whose signature it bears admits that at the time it was signed it was in
the words and figures exactly as set out in the pleading of the party relying upon it; and that any formal
requisites required by law, such as swearing and acknowledgment or revenue stamps which it requires,
are waived by him. 9

As correctly pointed out by the court a quo, the alleged false notarization of the deed of sale is of no
consequence. For a sale of real property or of an interest therein to be enforceable under the Statute of
Frauds, it is enough that it be in writing. 10 It need not be notarized. But the vendee may avail of the
right under Article 1357 of the New Civil Code to compel the vendor to observe the form required by law
in order that the instrument may be registered in the Registry of Deeds. 11 Hence, the due execution
and genuineness of the deed of sale are not really in issue in this case. Accordingly, assigned error I is
without merit.

What appellants really intended to prove through the alleged false notarization of the deed of sale is the
true import of the matter, which according to them, is a mere tentative agreement with appellee. As
such, it was not intended to be notarized and was merely entrusted to appellee's care and custody in
order that: first, the latter may secure the approval of one Erlinda Cortez to their (appellants') offer to
pay a debt owing to her in the amount of P2,000.00 to appellee instead of paying directly to her as she
was indebted to appellee in various amounts exceeding P2,000.00; and second once the approval is
secured, appellee would render an accounting of collections made from Erlinda showing in particular the
consideration of P2,000.00 of the deed of sale duly credited to Erlinda's account.

According to appellants, they intended to prove at a full dress trial the material facts: (1) that the
aforesaid conditions were not fulfilled; (2) that Erlinda Cortez paid her total indebtedness to appellee in
the amount of P14,160.00, the P2,000.00 intended to be paid by appellant included; and (3) that said
Erlinda decided to forego, renounce and refrain from collecting the P2,000.00 the appellants owed her
as a countervance reciprocity of the countless favors she also owes them.
Being conditions which alter and vary the terms of the deed of sale, such conditions cannot, however,
be proved by parol evidence in view of the provision of Section 7, Rule 130 of the Rules of Court which
states as follows:

Sec. 7. Evidence of written agreements when the terms of an agreement have been reduced to writing,
it is to be considered as containing all such terms, and, therefore, there can be, between the parties and
their successors in interest, no evidence of the terms of the agreement other than the contents of the
writing, except in the following cases:

(a) Where a mistake or imperfection of the writing, or its failure to express the true intent and
agreement of the parties, or the validity of the agreement is put in issue by the pleadings;

(b) When there is an intrinsic ambiguity in the writing. The term "agreement" includes wills."

The parol evidence rule forbids any addition to or contradiction of the terms of a written instrument by
testimony purporting to show that, at or before the signing of the document, other or different terms
were orally agreed upon by the parties. 12

While it is true, as appellants argue, that Article 1306 of the New Civil Code provides that "the
contracting parties may establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided that they are not contrary to law, morals, good customs, public order, or public
policy" and that consequently, appellants and appellee could freely enter into an agreement imposing as
conditions thereof the following: that appellee secure the written conformity of Erlinda Cortez and that
she render an accounting of all collections from her, said conditions may not be proved as they are not
embodied in the deed of sale.

The only conditions imposed for the execution of the Deed of Confirmation of Sale by appellants in favor
of appellee are the release of the title and the approval of the subdivision plan. Thus, appellants may not
now introduce other conditions allegedly agreed upon by them because when they reduced their
agreement to writing, it is presumed that "they have made the writing the only repository and memorial
of truth, and whatever is not found in the writing must be understood to have been waived and
abandoned." 13

Neither can appellants invoke any of the exceptions to the parol evidence rule, more particularly, the
alleged failure of the writing to express the true intent and agreement of the parties. Such an exception
obtains where the written contract is so ambiguous or obscure in terms that the contractual intention of
the parties cannot be understood from a mere reading of the instrument. In such a case, extrinsic
evidence of the subject matter of the contract, of the relations of the parties to each other, and of the
facts and circumstances surrounding them when they entered into the. contract may be received to
enable the court to make a proper interpretation of the instrumental. 14 In the case at bar, the Deed of
Sale (Exh. A or 1) is clear, without any ambiguity, mistake or imperfection, much less obscurity or doubt
in the terms thereof. We, therefore, hold and rule that assigned errors III and IV are untenable.

According to the court a quo, "(s)ince Santos, in his Opposition to the Motion for Summary Judgment
failed to meet the plaintiff's evidence with countervailing evidence, a circumstance indicating that there
are no serious factual issues involved, the motion for summary judgment may properly be granted." We
affirm and sustain the action of the trial court.
Indeed, where a motion for summary judgment and/or judgment on the pleadings has been filed, as in
this case, supporting and opposing affidavits shall be made on personal knowledge, shall set forth such
facts as may be admissible in evidence, and shall show affirmatively that the affiant is competent to
testify as to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred
to in the affidavitshalibeattachedtheretoorservedtherewith. 15

Examining the pleadings, affidavits and exhibits in the records, We find that appellants have not
submitted any categorical proof that Erlinda Cortez had paid the P2,000.00 to appellee, hence,
appellants failed to substantiate the claim that the cause of action of appellee has been extinguished.
And while it is true that appellants submitted a receipt for P14,160.00 signed by appellee, appellants,
however, have stated in their answer with counterclaim that the P2,000.00 value of the property
covered by the Deed of Sale, instead of being credited to Erlinda Cortez, was conspicuously excluded
from the accounting or receipt signed by appellee totalling P14,160.00. The aforesaid receipt is no proof
that Erlinda Cortez subsequently paid her P2,000.00 debt to appellee. As correctly observed by the court
a quo, it is improbable that Cortez would still pay her debt to appellee since Santos had already paid it.

Appellants' claim that their P2,000.00 debt to Erlinda Cortez had been waived or abandoned is not also
supported by any affidavit, document or writing submitted to the court. As to their allegation that the
appellee's claim is barred by prescription, the ruling of the trial court that only seven years and six
months of the ten-year prescription period provided under Arts. 1144 and 155 in cases of actions for
specific performance of the written contract of sale had elapsed and that the action had not yet
prescribed, is in accordance with law and, therefore, We affirm the same.

The action of the court a quo in rendering a summary judgment has been taken in faithful compliance
and conformity with Rule 34, Section 3, Rules of Court, which provides that "the judgment sought shall
be rendered forthwith if the pleadings, depositions, and admissions on file together with the affidavits,
show that, except as to the amount of damages, there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of law. "

Resolving assignments of errors, V, VI, and VII which directly assail the summary judgment, not the
propriety of the rendition thereof which We have already resolved to be proper and correct, it is Our
considered opinion that the judgment of the court a quo is but a logical consequence of the failure of
appellants to present any bona fide defense to appellee's claim. Said judgment is simply the application
of the law to the undisputed facts of the case, one of which is the finding of the court a quo, to which
We agree, that appellants are owners of one-half (1/2) interest of Lot I and, therefore, the fifth
assignment of error of appellants is without merit.

By the terms of the Deed of Sale itself, which We find genuine and not infirmed, appellants declared
themselves to be owners of one-half (1/2) interest thereof. But in order to avoid appellee's claim, they
now contend that Plan Psu-206650 where said Lot I appears is in the exclusive name of Teofilo Custodio
as the sole and exclusive owner thereof and that the deed of assignment of one-half (1/2) interest
thereof executed by said Teofilo Custodio in their favor is strictly personal between them.
Notwithstanding the lack of any title to the said lot by appellants at the time of the execution of the
deed of sale in favor of appellee, the said sale may be valid as there can be a sale of an expected thing,
in accordance with Art. 1461, New Civil Code, which states:

Art. 1461. Things having a potential existence may be the object of the contract of sale.
The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that the thing
will come into existence.

The sale of a vain hope or expectancy is void.

In the case at bar, the expectant right came into existence or materialized for the appellants actually
derived titles from Lot I .

We further reject the contention of the appellants that the lower court erred in ordering the appellants
to execute and convey to the appellee 20,000 sq.m. of land to be taken from the southeastern portion
of either their Lot 4, Pcs-5273, which has an area of 40,775 sq.m., described in T.C.T. No. 167568 (Exh. 9
or 1), or from their Lot No. 5-A, with an area of 30,205 sq.m. described in T.C.T. No. 203580 (Exh. 11 or
K), the expenses of segregation to be borne equally by the appellants and the appellee and the expenses
of execution and registration to be borne by the appellants. Their argument that the southeastern
portion of Lot 4 or Lot 5-A is no longer the southeastern portion of the bigger Lot 1, the latter portion
belonging to the lone registered owner, Teofilo Custodia is not impressed with merit. The subdivision of
Lot I between the appellants and Teofilo Custodio was made between themselves alone, without the
intervention, knowledge and consent of the appellee, and therefore, not binding upon the latter.
Appellants may not violate nor escape their obligation under the Deed of Sale they have agreed and
signed with the appellee b3 simply subdividing Lot 1, bisecting the same and segregating portions to
change their sides in relation to the original Lot 1.

Finally, considering the trial court's finding that the appellants compelled the appellee to litigate and
they failed to heed appellee's just demand, the order of the court awarding the sum of P2,000.00 as
attorney's fees is just and lawful, and We affirm the same.

WHEREFORE, IN VIEW OF THE FOREGOING, the judgment appealed from is hereby AFFIRMED in toto,
with costs against the appellants.

SO ORDERED.

HEIRS OF AMPARO DEL ROSARIO,

plaintiffs-appellees, vs.
AURORA O. SANTOS, JOVITA SANTOS GONZALES, ARNULFO O. SANTOS, ARCHIMEDESO. SANTOS,
ERMELINA SANTOS RAVIDA, and ANDRES O. SANTOS, JR.,
defendants-appellants.
G.R. No. L-46892 September 30, 1981FACTS:
Amparo Del Rosario entered into a contract with Atty. Andres Santos and his wifeAurora Santos
whereby the latter sold to the former a 20,000 sq. m. of land which is to besegregated from Lot 1. Said
lot forms part of the several lots belonging to a certain Teofilo
Custodio, of which lots, Attorney Santos, by agreement with the latter, as his attorneys fees,owns
interests thereof. Parties agreed that spouses Andres shall thereafter execute a
Deed of Confirmation of Sale in favor of Del Rosario as soon as the title has been releasedand the
subdivision plan of said Lot 1 has been approved by the Land RegistrationCommissioner. Due to the
failure of the spouses Andres to execute the deed after thefulfilment of the condition, Del Rosario claims
malicious breach of a Deed of Sale. Defendantthereafter filed a motion to dismiss setting up the
defenses of lack of jurisdiction of thecourt over the subject of the action lack of cause of action as well
as the defense of prescription. They further alleged that the deed of sale was only an
accommodationgraciously extended, out of close friendship between the defendants and the plaintiff,
hence,tantamount to waiver, abandonment or otherwise extinguishment of the demand set forthin the
complaint. Finally, defendants alleged that the claim on which the action or suit isfounded is
unenforceable under the statute of frauds and that the cause or object of thecontract did not exist at
the time of the transaction. The lower court resolved to deny themotion to dismiss. After actions by
respective parties, the lower court ordered thedefendants to execute and convey to plaintiff the
200,000 sq. m. of land to be taken eitherfrom Lot 4 or from Lot 5-
A of Custodios lots, which defendants own interest thereof.
Aggrieved by the aforesaid decision, the defendants filed an appeal with the Court of Appeals which
certified the records of the case to the Supreme Court for final determination.
ISSUE: WON THE SALE IS VALID AS TO THE CAUSE OR OBJECT OF THE CONTRACT.HELD:
Yes. The Supreme Court held that the execution of the Deed of Sale is validnotwithstanding the lack of
any title to the lot by appellants at the time of execution of theDeed of Sale in favor of appellee as there
can be a sale of an expected thing in accordance
with Article 1461 of the NCC: Article 1461: Things having a potential existence may be the
object of the contract of sale. The efficacy of the sale of a mere hope of expectancy isdeemed subject to
the condition that the thing will come into existence. The sale of a vainhope or expectancy
is void. The case at bar is not a case of a vain hope or expectancy
which is void under the law. The expectant right came into existence or materialized for theappellants
actually derived titles from Lot 1which subsequently became the object of subdivision.

[G.R. NO. 140608. September 23, 2004]

PERMANENT SAVINGS AND LOAN BANK, petitioner, vs. MARIANO VELARDE, respondent.
DECISION
AUSTRIA-MARTINEZ, J.:

In a complaint for sum of money filed before the Regional Trial Court of Manila (Branch 37), docketed as
Civil Case No. 94-71639, petitioner Permanent Savings and Loan Bank sought to recover from
respondent Mariano Velarde, the sum of P1,000,000.00 plus accrued interests and penalties, based on a
loan obtained by respondent from petitioner bank, evidenced by the following: (1) promissory note
dated September 28, 1983;[1] (2) loan release sheet dated September 28, 1983;[2] and (3) loan
disclosure statement dated September 28, 1983.[3] Petitioner bank, represented by its Deputy
Liquidator after it was placed under liquidation, sent a letter of demand to respondent on July 27, 1988,
demanding full payment of the loan.[4] Despite receipt of said demand letter,[5] respondent failed to
settle his account. Another letter of demand was sent on February 22, 1994,[6] and this time,
respondents counsel replied, stating that the obligation is not actually existing but covered by
contemporaneous or subsequent agreement between the parties [7]

In his Answer, respondent disclaims any liability on the instrument, thus:

2. The allegations in par. 2, Complaint, on the existence of the alleged loan of P1-Million, and the
purported documents evidencing the same, only the signature appearing at the back of the promissory
note, Annex A seems to be that of herein defendant. However, as to any liability arising therefrom, the
receipt of the said amount of P1-Million shows that the amount was received by another person, not
the herein defendant. Hence, no liability attaches and as further stated in the special and affirmative
defenses that, assuming the promissory note exists, it does not bind much less is there the intention by
the parties to bind the herein defendant. In other words, the documents relative to the loan do not
express the true intention of the parties.[8]

Respondents Answer also contained a denial under oath, which reads:

I, MARIANO Z. VELARDE, of age, am the defendant in this case, that I caused the preparation of the
complaint and that all the allegations thereat are true and correct; that the promissory note sued upon,
assuming that it exists and bears the genuine signature of herein defendant, the same does not bind him
and that it did not truly express the real intention of the parties as stated in the defenses; [9]

During pre-trial, the issues were defined as follows:

1. Whether or not the defendant has an outstanding loan obligation granted by the plaintiff;

2. Whether or not the defendant is obligated to pay the loan including interests and attorneys fees;

3. Whether or not the defendant has really executed the Promissory Note considering the doubt as to
the genuineness of the signature and as well as the non-receipt of the said amount;

4. Whether or not the obligation has prescribed on account of the lapse of time from date of execution
and demand for enforcement; and

5. Whether or not the defendant is entitled to his counterclaim and other damages.[10]

On September 6, 1995, petitioner bank presented its sole witness, Antonio Marquez, the Assistant
Department Manager of the Philippine Deposit Insurance Corporation (PDIC) and the designated Deputy
Liquidator for petitioner bank, who identified the Promissory Note[11] dated September 28, 1983, the
Loan Release Sheet[12] dated September 28, 1983, and the Disclosure Statement of Loan Credit
Transaction.[13]

After petitioner bank rested its case, respondent, instead of presenting evidence, filed with leave of
court his demurrer to evidence, alleging the grounds that:

(a) PLAINTIFF FAILED TO PROVE ITS CASE BY PREPONDERANCE OF EVIDENCE.

(b) THE CAUSE OF ACTION, CONCLUDING ARGUENTI THAT IT EXISTS, IS BARRED BY PRESCRIPTION
AND/OR LACHES.[14]

The trial court, in its Decision dated January 26, 1996, found merit in respondents demurrer to evidence
and dismissed the complaint including respondents counterclaims, without pronouncement as to
costs.[15]

On appeal, the Court of Appeals agreed with the trial court and affirmed the dismissal of the complaint
in its Decision[16] dated October 27, 1999.[17] The appellate court found that petitioner failed to
present any evidence to prove the existence of respondents alleged loan obligations, considering that
respondent denied petitioners allegations in its complaint. It also found that petitioner banks cause of
action is already barred by prescription.[18]
Hence, the present petition for review on certiorari under Rule 45 of the Rules Court, with the following
assignment of errors:

4.1

THE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONER FAILED TO ESTABLISH THE GENUINENESS,
DUE EXECUTION AND AUTHENTICITY OF THE SUBJECT LOAN DOCUMENTS.

4.2

THE COURT OF APPEALS ERRED IN HOLDING THAT PETITIONERS CAUSE OF ACTION IS ALREADY BARRED
BY PRESCRIPTION AND OR LACHES.[19]

Before going into the merits of the petition, the Court finds it necessary to reiterate the well-settled rule
that only questions of law may be raised in a petition for review on certiorari under Rule 45 of the Rules
of Court, as the Supreme Court is not a trier of facts.[20] It is not our function to review, examine and
evaluate or weigh the probative value of the evidence presented.[21]

There are, however, exceptions to the rule, e.g., when the factual inferences of the appellate court are
manifestly mistaken; the judgment is based on a misapprehension of facts; or the CA manifestly
overlooked certain relevant and undisputed facts that, if properly considered, would justify a different
legal conclusion.[22] This case falls under said exceptions.

The pertinent rule on actionable documents is found in Rule 8, Section 7 of the Rules of Court which
provides that when the cause of action is anchored on a document, the genuineness or due execution of
the instrument shall be deemed impliedly admitted unless the defendant, under oath, specifically denies
them, and sets forth what he claims to be the facts.

It was the trial courts opinion that:

The mere presentation of supposed documents regarding the loan, but absent the testimony of a
competent witness to the transaction and the documentary evidence, coupled with the denial of liability
by the defendant does not suffice to meet the requisite preponderance of evidence in civil cases. The
documents, standing alone, unsupported by independent evidence of their existence, have no legal
basis to stand on. They are not competent evidence. Such failure leaves this Court without ample basis
to sustain the plaintiffs cause of action and other reliefs prayed for. The loan document being
challenged. (sic) Plaintiff did not exert additional effort to strengthen its case by the required
preponderance of evidence. On this score, the suit must be dismissed.[23]

The Court of Appeals concurred with the trial courts finding and affirmed the dismissal of the complaint,
viz.:

The bank should have presented at least a single witness qualified to testify on the existence and
execution of the documents it relied upon to prove the disputed loan obligations of Velarde. This falls
short of the requirement that (B)efore any private writing may be received in evidence, its due
execution and authenticity must be proved either: (a) By anyone who saw the writing executed; (b) By
evidence of the genuineness of the handwriting of the maker; or (c) By a subscribing witness. (Rule 132,
Sec. 21, Rules of Court)

It is not true, as the Bank claims, that there is no need to prove the loan and its supporting papers as
Velarde has already admitted these. Velarde had in fact denied these in his responsive pleading. And
consistent with his denial, he objected to the presentation of Marquez as a witness to identify the
Exhibits of the Bank, and objected to their admission when these were offered as evidence. Though
these were grudgingly admitted anyway, still admissibility of evidence should not be equated with
weight of evidence. [24]

A reading of respondents Answer, however, shows that respondent did not specifically deny that he
signed the loan documents. What he merely stated in his Answer was that the signature appearing at
the back of the promissory note seems to be his. Respondent also denied any liability on the promissory
note as he allegedly did not receive the amount stated therein, and the loan documents do not express
the true intention of the parties.[25] Respondent reiterated these allegations in his denial under oath,
stating that the promissory note sued upon, assuming that it exists and bears the genuine signature of
herein defendant, the same does not bind him and that it did not truly express the real intention of the
parties as stated in the defenses [26]

Respondents denials do not constitute an effective specific denial as contemplated by law. In the early
case of Songco vs. Sellner,[27] the Court expounded on how to deny the genuineness and due execution
of an actionable document, viz.:

This means that the defendant must declare under oath that he did not sign the document or that it is
otherwise false or fabricated. Neither does the statement of the answer to the effect that the
instrument was procured by fraudulent representation raise any issue as to its genuineness or due
execution. On the contrary such a plea is an admission both of the genuineness and due execution
thereof, since it seeks to avoid the instrument upon a ground not affecting either.

In fact, respondents allegations amount to an implied admission of the due execution and genuineness
of the promissory note. The admission of the genuineness and due execution of a document means that
the party whose signature it bears admits that he voluntarily signed the document or it was signed by
another for him and with his authority; that at the time it was signed it was in words and figures exactly
as set out in the pleading of the party relying upon it; that the document was delivered; and that any
formalities required by law, such as a seal, an acknowledgment, or revenue stamp, which it lacks, are
waived by him.[28] Also, it effectively eliminated any defense relating to the authenticity and due
execution of the document, e.g., that the document was spurious, counterfeit, or of different import on
its face as the one executed by the parties; or that the signatures appearing thereon were forgeries; or
that the signatures were unauthorized.[29]

Clearly, both the trial court and the Court of Appeals erred in concluding that respondent specifically
denied petitioners allegations regarding the loan documents, as respondents Answer shows that he
failed to specifically deny under oath the genuineness and due execution of the promissory note and its
concomitant documents. Therefore, respondent is deemed to have admitted the loan documents and
acknowledged his obligation with petitioner; and with respondents implied admission, it was not
necessary for petitioner to present further evidence to establish the due execution and authenticity of
the loan documents sued upon.
While Section 22, Rule 132 of the Rules of Court requires that private documents be proved of their due
execution and authenticity before they can be received in evidence, i.e., presentation and examination
of witnesses to testify on this fact; in the present case, there is no need for proof of execution and
authenticity with respect to the loan documents because of respondents implied admission thereof.[30]

Respondent claims that he did not receive the net proceeds in the amount of P988,333.00 as stated in
the Loan Release Sheet dated September 23, 1983.[31] The document, however, bears respondents
signature as borrower.[32] Res ipsa loquitur.[33] The document speaks for itself. Respondent has
already impliedly admitted the genuineness and due execution of the loan documents. No further proof
is necessary to show that he undertook the obligation with petitioner. A person cannot accept and reject
the same instrument.[34]

The Court also finds that petitioners claim is not barred by prescription.

Petitioners action for collection of a sum of money was based on a written contract and prescribes after
ten years from the time its right of action arose.[35] The prescriptive period is interrupted when there is
a written extrajudicial demand by the creditors.[36] The interruption of the prescriptive period by
written extrajudicial demand means that the said period would commence anew from the receipt of the
demand.[37]

Thus, in the case of The Overseas Bank of Manila vs. Geraldez,[38] the Court categorically stated that the
correct meaning of interruption as distinguished from mere suspension or tolling of the prescriptive
period is that said period would commence anew from the receipt of the demand. In said case, the
respondents Valenton and Juan, on February 16, 1966, obtained a credit accommodation from the
Overseas Bank of Manila in the amount of P150,000.00. Written extrajudicial demands dated February
9, March 1 and 27, 1968, November 13 and December 8, 1975 and February 7 and August 27, 1976 were
made upon the respondents but they refused to pay. When the bank filed a case for the recovery of said
amount, the trial court dismissed the same on the ground of prescription as the bank's cause of action
accrued on February 16, 1966 (the date of the manager's check for P150,000.00 issued by the plaintiff
bank to the Republic Bank) and the complaint was filed only on October 22, 1976. Reversing the ruling of
the trial court, the Court ruled:

An action upon a written contract must be brought within ten years from the time the right of action
accrues (Art. 1144[1], Civil Code). "The prescription of actions is interrupted when they are filed before
the court, when there is a written extrajudicial demand by the creditors, and when there is any written
acknowledgment of the debt by the debtor" (Art. 1155, Ibid, applied in Gonzalo Puyat & Sons, Inc. vs.
City of Manila, 117 Phil. 985, 993; Philippine National Bank vs. Fernandez, L-20086, July 10, 1967, 20
SCRA 645, 648; Harden vs. Harden, L-22174, July 21, 1967, 20 SCRA 706, 711).

A written extrajudicial demand wipes out the period that has already elapsed and starts anew the
prescriptive period. Giorgi says: "La interrupcion difiere de la suspension porque borra el tiempo
transcurrido anteriormente y obliga a la prescripcion a comenzar de nuevo" (9 Teoria de las
Obligaciones, 2nd Ed., p. 222). "La interrupcion . . . quita toda eficacia al tiempo pasado y abre camino a
un computo totalmente nuevo, que parte del ultimo momento del acto interruptivo, precisamente,
como si en aquel momento y no antes hubiese nacido el credito" (8 Giorgi, ibid pp. 390-2).

That same view as to the meaning of interruption was adopted in Florendo vs. Organo, 90 Phil. 483, 488,
where it ruled that the interruption of the ten-year prescriptive period through a judicial demand means
that "the full period of prescription commenced to run anew upon the cessation of the suspension".
"When prescription is interrupted by a judicial demand, the full time for the prescription must be
reckoned from the cessation of the interruption" (Spring vs. Barr, 120 So. 256 cited in 54 C.J.S. 293, note
27). That rule was followed in Nator and Talon vs. CIR, 114 Phil. 661, Sagucio vs. Bulos, 115 Phil. 786 and
Fulton Insurance Co. vs. Manila Railroad Company, L-24263, November 18, 1967, 21 SCRA 974, 981.

Interruption of the prescriptive period as meaning renewal of the original term seems to be the basis of
the ruling in Ramos vs. Condez, L-22072, August 30, 1967, 20 SCRA 1146, 1151. In that case the cause of
action accrued on June 25, 1952. There was a written acknowledgment by the vendors on November 10,
1956 of the validity of the deed of sale.

In National Marketing Corporation vs. Marquez, L-25553, January 31, 1969, 26 SCRA 722, it appears that
Gabino Marquez executed on June 24, 1950 a promissory note wherein he bound himself to pay to the
Namarco P12,000 in installments within the one-year period starting on June 24, 1951 and ending on
June 25, 1952. After making partial payments on July 7, 1951 and February 23, 1952, Marquez
defaulted.

His total obligation, including interest, as of October 31, 1964, amounted to P19,990.91. Written
demands for the payment of the obligation were made upon Marquez and his surety on March 22,
1956, February 16, 1963, June 10, September 18 and October 13, 1964. Marquez did not make any
further payment.

The Namarco sued Marquez and his surety on December 16, 1964. They contended that the action had
prescribed because the ten-year period for suing on the note expired on June 25, 1962. That contention
was not sustained. It was held that the prescriptive period was interrupted by the written demands,
copies of which were furnished the surety.

Respondents obligation under the promissory note became due and demandable on October 13, 1983.
On July 27, 1988, petitioners counsel made a written demand for petitioner to settle his obligation. From
the time respondents obligation became due and demandable on October 13, 1983, up to the time the
demand was made, only 4 years, 9 months and 14 days had elapsed. The prescriptive period then
commenced anew when respondent received the demand letter on August 5, 1988.[39] Thus, when
petitioner sent another demand letter on February 22, 1994,[40] the action still had not yet prescribed
as only 5 years, 6 months and 17 days had lapsed. While the records do not show when respondent
received the second demand letter, nevertheless, it is still apparent that petitioner had the right to
institute the complaint on September 14, 1994, as it was filed before the lapse of the ten-year
prescriptive period.

Lastly, if a demurrer to evidence is granted but on appeal the order of dismissal is reversed, the movant
shall be deemed to have waived the right to present evidence.[41] The movant who presents a
demurrer to the plaintiffs evidence retains the right to present their own evidence, if the trial court
disagrees with them; if the trial court agrees with them, but on appeal, the appellate court disagrees
with both of them and reverses the dismissal order, the defendants lose the right to present their own
evidence. The appellate court shall, in addition, resolve the case and render judgment on the merits,
inasmuch as a demurrer aims to discourage prolonged litigations.[42] Thus, respondent may no longer
offer proof to establish that he has no liability under the loan documents sued upon by petitioner.
The promissory note signed and admitted by respondent provides for the loan amount of
P1,000,000.00, to mature on October 13, 1983, with interest at the rate of 25% per annum. The note
also provides for a penalty charge of 24% per annum of the amount due and unpaid, and 25% attorneys
fees. Hence, respondent should be held liable for these sums.

WHEREFORE, the petition is GRANTED. The Decisions of the Regional Trial Court of Manila (Branch 37)
dated January 26, 1996, and the Court of Appeals dated October 27, 1999 are SET ASIDE. Respondent is
ordered to pay One Million Pesos (P1,000,000.00) plus 25% interest and 24% penalty charge per annum
beginning October 13, 1983 until fully paid, and 25% of the amount due as attorneys fees.

Costs against respondent.

LORETA AGUSTIN CHONG, G.R. No. 148280

also known as LORETA GARCIA
AGUSTIN,
Petitioner, Present:
- versus - Ynares-Santiago, J. (Chairperson),
Austria-Martinez,
Chico-Nazario, and
Nachura, JJ.
THE HONORABLE COURT OF
APPEALS, SPOUSES PEDRO and Promulgated:
ROSITA DE GUZMAN and FORTUNE
DEVELOPMENT CORPORATION,
Respondents.
July 10, 2007

x ---------------------------------------------------------------------------------------- x

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari assails the September 14, 2000 Decision[1] of the Court of Appeals
in CA-G.R. CV No. 47487, which affirmed the August 8, 1994 Decision[2] of the Regional Trial Court of
Manila, Branch 7 in Civil Case No. 89-50138 dismissing petitioners complaint, and ordering her to pay
P50,000.00 as moral damages, P10,000.00 as attorneys fees and costs of the suit, as well as the May 28,
2001 Resolution which denied petitioners motion for reconsideration.

On August 25, 1989, petitioner Loreta Agustin Chong filed a Complaint[3] for annulment of contracts
and recovery of possession against respondent-spouses Pedro and Rosita de Guzman, and Fortune
Development Corporation before the Regional Trial Court of Manila.
Petitioner alleged that she is the common-law wife of Augusto Chong; that on February 13, 1980, she
bought a parcel of land (subject lot) from respondent corporation as evidenced by Contract to Sell No.
195, particularly described as follows:
A parcel of land (Lot 1 Block 4, of the consolidation-subdivision plan (LRC) Pcs-18730, being a portion of
the consolidation of Lot 4522 and 4524, Paraaque Cadastre, Lots 1 & 2 (LRC) Psd-169203) L.R.C. Rec.
Nos. N-27442, N-27463, N-13960), situated in the Barrio of San Dionisio, Province of Rizal, containing an
area of TWO HUNDRED SIXTY SIX (266) square meters, more or less.

She further alleged that by virtue of a special power of attorney she executed in favor of Augusto, the
latter sold the subject lot to respondent-spouses under the Transfer of Rights and Assumption of
Obligation dated January 30, 1984 allegedly for P80,884.95 which petitioner or Augusto never received,
thus, said sale is null and void for lack of consideration; and that despite repeated demands,
respondent-spouses refused to turn over the possession of the subject lot to petitioner.

Petitioner likewise denied selling the house constructed on the subject lot to respondent-spouses for
P25,000.00, claiming that she could not have executed the Deed of Sale because at the time it was
allegedly notarized on February 24, 1987, she was working in Hong Kong as a domestic helper. Thus, said
sale is void for being a forgery. Petitioner alleged that despite repeated demands, respondent-spouses
refused to surrender the possession of the aforesaid house.

Petitioner also claimed that she is the owner of a house located at 1191 P. Zapanta, Singalong, Manila;
that without her knowledge and consent, respondent-spouses rented said house to other persons and
collected rent; and that despite repeated demands, respondent-spouses refused to return the
possession of the house as well as the rentals collected therefrom.

Petitioner prayed that the Transfer of Rights and Assumption of Obligation as well as the Deed of Sale be
declared null and void; that respondent-spouses be ordered to turn over the possession of the houses
and lots in Paraaque and Singalong to petitioner; and that respondents indemnify her for actual, moral
and exemplary damages as well as attorneys fees.

Respondent-spouses moved to dismiss[4] the complaint for failure to state a cause of action but it was
denied by the trial court. On December 11, 1989, respondent-spouses filed their Answer[5] to the
Complaint while respondent corporation failed to file its answer within the reglementary period hence,
it was declared in default.

During the pre-trial, respondent-spouses orally moved for leave of court to file an amended answer
which was granted. On May 18, 1990, respondent-spouses filed their Amended Answer with
Counterclaim.[6] Petitioner filed a Motion to Strike Out Amended Answer[7] alleging that no prior
written motion for leave to file amended answer was filed in violation of Section 3, Rule 10 of the Rules
of Court and that the amended answer contained substantial amendments, but same was denied by the
trial court in an Order[8] dated July 16, 1990.

In their amended answer, respondent-spouses asserted that the Transfer of Rights and Assumption of
Obligation was supported by sufficient consideration; that they paid P125,000.00, and not P25,000.00 as
alleged by petitioner, for the house on the subject lot; that the Deed of Sale over the house constructed
on the subject lot was signed by petitioner on February 22, 1987 while she was still in the country but it
was notarized only on February 24, 1987 or after she had left to work abroad; that petitioner failed to
allege or submit any actionable document to prove her claim of ownership; that the house located in
Singalong is owned by respondent-spouses; and that petitioners complaint is malicious and baseless
which entitles them to actual, moral, exemplary and nominal damages, as well as attorneys fees.
After trial on the merits, the trial court rendered a Decision finding thus:

The Court is convinced that the document entitled Transfer of Rights and Assumption of Obligation is
sufficiently supported by valuable consideration. The evidence presented by the [respondent-spouses]
has shown that for the house and lot [respondent-spouses] paid almost P480,000.00 and this definitely
is more than sufficient compensation for the house and lot in question. The Court believes, considering
the evidence on record, that [petitioner] on February 22, 1987 received the amount of P25,000.00 from
Pedro de Guzman before she left for Hongkong. Unfortunately, the document was not notarized on that
day but two days thereafter. The Court also believes that it was the [respondent- spouses] who paid the
sum of P105,000.00, the obligation of Augusto Chong and [petitioner] to Rosario Cabelin and as a
consequence, all the documents pertaining thereto were given to the [respondent-spouses] by Rosario
Cabelin. The Court also notes that [petitioner] and Augusto Chong could not even agree as to who was
indebted to Rosario Cabelin. [Petitioner] tried to deny that she was indebted to Rosario Cabelin while
Augusto Chong claimed that it was [petitioner] who was indebted to Rosario.

The Court, therefore, considering those inconsistencies of the [petitioner] and her paramour refuses to
believe their testimonies.

On the other hand, the Court finds the testimony of [respondent Pedro de Guzman] and his witnesses to
be believable and consistent with the evidence received by it.

It is clear from the aforementioned discussion that [petitioner] has failed to prove by a preponderance
of evidence her causes of action against [respondents]. On the other hand, [respondents] have shown
the baselessness of the complaint filed by [petitioner].

WHEREFORE, premises considered, judgment is rendered for [respondents] by dismissing the complaint
and sentencing [petitioner] to pay the [respondents] P50,000.00 as moral damages plus P10,000.00 as
attorneys fees, plus costs of suit.[9]

Petitioner appealed to the Court of Appeals which rendered the assailed Decision affirming in toto the
decision of the trial court.

Hence, the instant petition.

Petitioner raises four issues, to wit: (1) whether the trial court erred in admitting respondent-spouses
amended answer in violation of Section 3, Rule 10 of the Rules of Court, (2) whether petitioner was
deprived of due process when during the pre-trial, respondent-spouses failed and refused to furnish her
copies of the documents that they intended to present, in violation of Section 6, Rule 18 of the Rules of
Court, (3) whether the trial court erred in not finding that the Transfer of Rights and Assumption of
Obligation dated January 30, 1984 was void or, in the alternative, unenforceable as against petitioner.
Petitioner claims that the trial court erred in granting respondent-spouses oral manifestation or motion
for leave to file an amended answer. She argues that respondent-spouses should have filed a written
motion for leave to file an amended answer, pursuant to Section 3,[10] Rule 10 of the Rules of Court.
She argues that the purpose of the rule is to help the trial court determine whether the proposed
amendments constitute substantial amendments to their original answer and whether the motion is
intended to delay the proceedings, as well as to give the adverse party an opportunity to be heard.

The contention lacks merit.

The trial court allowed respondent-spouses to amend their answer after it observed that their original
answer merely contained specific denials without clearly setting forth, as far as practicable, the truth of
the matter upon which they rely to support such denial as required under Section 10,[11] Rule 8 of the
Rules of Court. Further, after denying the material allegations in the Complaint, respondent-spouses
merely stated in their original answer that [a]ll other arguments embodied in [their prior] motion to
dismiss are reiterated as part of the special and affirmative defenses herein.[12] Under these conditions,
the trial court justifiably deemed it necessary for respondent-spouses to amend their answer in order to
sufficiently clarify the issues to be tried and thereby expedite the proceedings. In granting respondent-
spouses motion to file an amended answer, the trial court acted within its discretion pursuant to Section
2, Rule 18 of the Rules of Court:

SEC. 2. Nature and purpose. The pre-trial is mandatory. The court shall consider:

xxxx

(c) The necessity or desirability of amendments to the pleadings;

Trial court allowed the filing of an amended answer to avoid multiplicity of suits, to determine the real
controversies between the parties and to decide the case on the merits without unnecessary delay, all
of which form the bases for the liberality of the rule in allowing amendments to pleadings.[13] This was
in consonance with the basic tenet that the Rules of Court shall be liberally construed to promote the
just, speedy and inexpensive disposition of every action.[14]

Petitioner next asserts that during the pre-trial, respondent-spouses did not furnish her with copies of
the documents that they intended to present, in violation of Section 6,[15] Rule 18 of the Rules of Court.
Petitioner claims that she was denied due process and that the trial court gave respondent- spouses
undue advantage during the trial of this case.

Petitioners contention lacks merit.

The records show that respondent-spouses Pre-Trial Brief[16] dated April 10, 1990 enumerated the
documents to be presented during the trial as well as the purposes of their presentation. Although
copies of the documents enumerated therein were not attached to the Pre-Trial Brief, they were
nonetheless previously attached to respondent-spouses Motion To Dismiss[17] dated September 8,
1989, Reply[18] to petitioners opposition to the motion to dismiss dated September 25, 1989, and
Amended Answer With Counterclaim[19] dated May 11, 1990, all of which were copy furnished to
petitioner. During trial, petitioner was afforded every opportunity to examine respondent-spouses
documentary evidence, and to controvert the same. Petitioner even cross-examined respondent-
spouses on these documents at length and challenged their validity during the presentation of both her
evidence-in-chief and rebuttal evidence. Consequently, petitioner can not now claim that she was
denied due process and that she was unable to adequately prosecute her case.

Petitioners main contention rests on the alleged nullity or, in the alternative, unenforceability of the
Transfer of Rights and Assumption of Obligation dated January 30, 1984.

We agree with the findings of the lower courts that the parties voluntarily executed the Transfer of
Rights and Assumption of Obligation dated January 30, 1984 and that the same was supported by
valuable consideration. The evidence on record sufficiently established that on February 13, 1980,
petitioner bought the subject lot from respondent corporation under Contract to Sell No. 195 and
thereafter, began paying the stipulated monthly installments thereon. On April 18, 1983, she executed a
Special Power of Attorney[20] in favor of Augusto Chong, granting the latter the power to mortgage,
encumber, sell and dispose the property (subject lot) under such terms and conditions which my said
attorney (Augusto) may deem acceptable x x x and pay any/all my valid obligations to the proper
person/s x x x.[21] On July 1, 1983, one Rosario Cabelin filed a complaint for sum of money against
petitioner and Augusto with the Regional Trial Court of Pasay City which was docketed as Civil Case No.
1102-P. Under threat of preliminary attachment, petitioner, who was then working as a domestic helper
in Hong Kong, sought the assistance of respondent-spouses to settle the case. Subsequently, Rosario,
Augusto and petitioner, with Augusto acting as petitioners attorney-in-fact, entered into a Compromise
Agreement[22] dated July 25, 1983 wherein petitioner and Augusto agreed to pay the amount of
P55,000.00 to Rosario. To guarantee the payment of the remaining balance of the debt in the amount of
P105,000.00, Augusto, again acting as petitioners attorney-in-fact, executed a Deed of Sale with Right to
Repurchase[23] dated July 25, 1983 over the subject lot in favor of Rosario in consideration of the
aforesaid sum. In addition, Augusto, respondent-spouses, Gualberto and Fe Arceta jointly and severally
promised to pay the aforesaid sum on or before July 24, 1984 under a Promissory Note[24] dated July
24, 1983.

Sometime in December 1983, Rosario demanded payment of the remaining balance of the debt.
Respondent-spouses agreed to pay Rosario the amount of P105,000.00 provided petitioner will transfer
her rights over the subject lot to them. Thus, after respondent-spouses had paid Rosario, Augusto,
acting under the aforementioned Special Power of Attorney, executed a Transfer of Rights and
Assumption of Obligation[25] dated January 30, 1984 in favor of respondent-spouses and with the
conformity of respondent corporation. Correspondingly, Rosario executed a Quitclaim[26] in favor of
Augusto releasing him from the aforementioned Deed of Sale with Right to Repurchase and Promissory
Note. Thereafter, respondent-spouses paid the remaining monthly installments and transferred the title
over the subject lot in their names as evidenced by Transfer Certificate of Title No. 1292[27] issued on
January 21, 1988.

Petitioner asserts, however, that the Transfer of Rights and Assumption of Obligation is null and void
because it lacked valuable consideration. She claims that she executed the Special Power of Attorney in
favor of Augusto with the understanding that the subsequent transfer of the subject lot to respondent-
spouses would be merely simulated (kunwarian).[28] She claims that respondent-spouses and her nieces
enticed her into executing the Special Power of Attorney because Augusto might sell the subject lot
while petitioner is abroad and use the proceeds thereof to support his children with his legal wife.[29]
Thus, petitioner agreed to execute the Special Power of Attorney in favor of Augusto for the sole
purpose of transferring the subject lot in the name of respondent-spouses through a simulated sale.

We are not persuaded.

If petitioner believes that Augusto would appropriate the property during her absence, then she should
not have executed the Special Power of Attorney in his favor authorizing him to dispose of the subject
lot. If it was truly her intention to prevent Augusto from disposing the subject lot, then she could have
simply retained the rights over the subject lot in her name or directly transferred the same to the name
of respondent- spouses before she left for Hong Kong. Notably, when petitioner was presented as a
witness during the presentation of her rebuttal evidence, she claimed that she executed the Special
Power of Attorney to help her nieces, Gualberto and Fe Arceta, secure a loan for the purported repair of
the latters duplex house.[30] Augusto was allegedly appointed as petitioners attorney-in-fact so that the
former could act as a co-maker of the loan.[31] Unfortunately for petitioner, these inconsistencies cast
doubt on her credibility.

Petitioners claim that Augusto was not empowered to dispose of the subject lot in order to pay off an
alleged debt she owed to Rosario, is not worthy of belief. The clear and unmistakable tenor of the
Special Power of Attorney reveals that petitioner specifically authorized Augusto to sell the subject lot
and to settle her obligations to third persons. The Special Power of Attorney is a duly notarized
document and, as such, is entitled, by law, to full faith and credit upon its face.[32] Notarization vests
upon the document the presumption of regularity unless it is impugned by strong, complete and
conclusive proof.[33] Rather than challenging its validity, petitioner admitted in open court that she
signed the Special Power of Attorney with a full appreciation of its contents[34] and without
reservation.[35]

Petitioner likewise admitted that Rosario was her creditor when she was first presented as a witness
during the reception of evidence.[36] Even petitioners own witness, Augusto, testified that petitioner
was indebted to Rosario due to a failed business venture involving a store in Baclaran, Manila.[37] In her
Letter[38] dated February 6, 1984 to respondent- spouses, petitioner, likewise, admitted that she was
indebted to Rosario and sought the assistance of respondent-spouses to help pay off her debts.
In fine, the evidence on record sufficiently established that petitioners rights over the subject lot were
validly transferred to respondent-spouses in consideration of the latters payment of petitioners debts to
Rosario. When Augusto executed the Transfer of Rights and Assumption of Obligations on behalf of
petitioner, he was acting within his powers under the Special Power of Attorney for valuable
consideration. In a contract of agency, the agent acts in representation or in behalf of another with the
consent of the latter,[39] and the principal is bound by the acts of his agent for as long as the latter acts
within the scope of his authority.[40] Hence, the Transfer of Rights and Assumption of Obligations is
valid and binding between the parties.

Lastly, petitioner impugns the jurisdiction of the Pasay City RTC in Civil Case No. 1102-P on the ground
that it never acquired jurisdiction over her person because summons were allegedly not properly served
on her, and that she never authorized Augusto to enter into the compromise agreement in said case on
her behalf. According to petitioner, she was in Hong Kong when the collection suit was filed by Rosario
against her and Augusto. In short, she assails the validity of the judgment based on compromise
agreement since the proceedings in Civil Case No. 1102-P were presumably terminated after the parties
entered into a Compromise Agreement dated July 25, 1983. She posits that all the documents signed by
Augusto on her behalf, specifically, the Compromise Agreement dated July 25, 1983, Deed of Sale with
Right to Repurchase dated July 25, 1983, and Transfer of Rights and Assumption of Obligation dated
January 30, 1984, are unenforceable as against her.

Petitioners contention must likewise fail.

A judgment based on a compromise agreement is a judgment on the merits wherein the parties have
validly entered into stipulations and the evidence was duly considered by the trial court that approved
the agreement.[41] It is immediately executory and not appealable unless set aside on grounds of nullity
under Article 2038[42] of the Civil Code,[43] and has the effect of a judgment of the court.[44] Further,
well-entrenched is the rule that a party may attack the validity of a final and executory judgment
through three ways:
The first is by petition for relief from judgment under Rule 38 of the Revised Rules of Court, when
judgment has been taken against the party through fraud, accident, mistake or excusable negligence, in
which case the petition must be filed within sixty (60) days after the petitioner learns of the judgment,
but not more than six (6) months after such judgment was entered. The second is by direct action to
annul and enjoin the enforcement of the judgment. This remedy presupposes that the challenged
judgment is not void upon its face, but is entirely regular in form, and the alleged defect is one which is
not apparent upon its face or from the recitals contained in the judgment. x x x under accepted
principles of law and practice, long recognized in American courts, the proper remedy in such case, after
the time for appeal or review has passed, is for the aggrieved party to bring an action enjoining the
judgment, if not already carried into effect; or if the property has already been disposed of, he may
institute suit to recover it. The third is either a direct action, as certiorari, or by a collateral attack against
the challenged judgment (which is) void upon its face, or that the nullity of the judgment is apparent by
virtue of its own recitals. As aptly explained by Justice Malcolm in his dissent in Banco Espaol-Filipino v.
Palanca, supra, A judgment which is void upon its face, and which requires only an inspection of the
judgment roll to demonstrate its want of vitality is a dead limb upon the judicial tree, which should be
lopped off, if the power so to do exists.

In the case at bar, the want of jurisdiction of the Pasay RTC in Civil Case No. 1102-P due to the alleged
non-service of summons has not been established by petitioner. The judgment based on compromise
agreement made therein was likewise not established as being void upon its face. Except for the self-
serving allegation that she was in Hong Kong when the collection suit was filed, petitioner did not
present competent proof to prove that she was not properly served with summons. Even if it were true
that she was abroad when the collection suit was filed against her, summons could still be served
through extraterritorial service under Section 16[45] in relation to Section 15,[46] of Rule 14 of the Rules
of Court. Undeniably, the Pasay City RTC in Civil Case No. 1102-P enjoys the presumption of regularity in
the conduct of its official duties which was not fully rebutted by petitioner.

Petitioner bewails that the records of Civil Case No. 1102-P was destroyed due to a fire that gutted the
Pasay City Hall Building on January 18, 1992 as evidenced by a Certification[47] dated November 6, 2001
issued by the Office of the Clerk of Court, RTC, Pasay City. However, petitioner was not without recourse
considering that she could have filed a petition for the reconstitution of the records of said case, and
thereafter, sought the annulment of the judgment therein, if warranted. The procedure for the
reconstitution of records could have been done either under Act No. 3110,[48] which is the general law
that governs the reconstitution of judicial records, or under Section 5(h)[49] of Rule 135 of the Rules of
Court which recognizes the inherent power of the courts to reconstitute at any time the records of their
finished cases.[50] Since petitioner failed to avail of the proper remedies before the proper forum, we
cannot rule on, much less disturb, the validity of the proceedings before the Pasay City RTC in Civil Case
No. 1102-P.
At any rate, whether or not petitioner was properly served with summons in Civil Case No. 1102-P, and
that Augusto was not authorized to enter into the Compromise Agreement dated July 25, 1983 on her
behalf, will not affect the outcome of this case. There is sufficient evidence on record to establish that
petitioner impliedly ratified the compromise agreement as well as the other documents executed
pursuant thereto. Implied ratification may take various forms such as by silence or acquiescence; by acts
showing approval or adoption of the contract; or by acceptance and retention of benefits flowing
therefrom.[51]
In the instant case, petitioner claimed that she learned of the transfer of the subject lot to respondent-
spouses as part of the settlement in the collection suit in May 1985;[52] however, she did not take steps
to immediately assail the alleged unauthorized transfer of the same. She failed to adequately explain
why she waited four years later or until 1989 to file the subject complaint to annul the aforesaid
documents. More importantly, instead of asserting her rights over the subject lot after discovering the
alleged fraudulent and unauthorized transfer of the same to respondent-spouses in May 1985,
petitioner subsequently sold the house constructed on the subject lot also to respondent-spouses on
February 22, 1987 for the sum of P25,000.00. This act runs counter to the reaction of one who discovers
that his or her property has been fraudulently conveyed in favor of another. Indubitably, this act only
fortifies the previous finding that petitioner has authorized and consented to, or, at the very least,
ratified the sale of the subject lot to respondent-spouses to pay off her debts to Rosario.
Petitioner alleges that the Deed of Sale[53] dated February 24, 1987 is a forgery. She denies having
signed the aforesaid deed and claims that on February 24, 1987, the date when the deed was allegedly
notarized, she was in Hong Kong working as a domestic helper.
The trial court and the Court of Appeals found otherwise. They gave credence to the claim of
respondent Pedro de Guzman that petitioner signed the Deed of Sale and received the P25,000.00
consideration therefor on February 22, 1987 or two days before she left for Hong Kong. However, the
deed was notarized only on February 24, 1987 as admitted by respondent Pedro de Guzman. The Court
of Appeals noted that even a cursory examination of the signature appearing on the Deed of Sale would
show that it was written by one and the same hand that signed the Contract to Sell which petitioner
admits contained her signature.[54] In addition, Augusto admitted that he signed the deed as evidenced
by the signature in the portion of the deed where he gave his marital consent to the sale.[55] Further, as
per the request of petitioner in a Letter[56] dated February 22, 1987, respondent- spouses gave
petitioners son and sister the sum of P122,000.00 as additional consideration for the house built on the
subject lot. Thereafter, petitioners son and sister signed an Annotation[57] dated March 20, 1987 in said
Letter acknowledging receipt of the aforesaid sum.

It was established that petitioner received valuable consideration for the sale of the house on the
subject lot. Concededly, the notarization of the deed was defective as respondent Pedro de Guzman
himself admitted that the deed was notarized only two days after petitioner had signed the deed and at
which time she was already in Hong Kong. In short, petitioner did not appear before the notary public in
violation of the Notarial Law[58] which requires that the party acknowledging must appear before the
notary public or any other person authorized to take acknowledgments of instruments or
documents.[59] Nevertheless, the defective notarization of the deed does not affect the validity of the
sale of the house. Although Article 1358[60] of the Civil Code states that the sale of real property must
appear in a public instrument, the formalities required by this article is not essential for the validity of
the contract but is simply for its greater efficacy or convenience, or to bind third persons,[61] and is
merely a coercive means granted to the contracting parties to enable them to reciprocally compel the
observance of the prescribed form.[62] Consequently, the private conveyance of the house is valid
between the parties.[63]

Based on the foregoing, we are satisfied that the sale of the subject lot and the house built thereon was
made for valuable consideration and with the consent of petitioner. Consequently, we affirm the
findings of the lower courts which upheld the validity of the transfer of petitioners rights over the
subject lot as well as the sale of the house built thereon in favor of respondent-spouses.

Anent petitioners claim that she is the owner of another house located at 1191 P. Zapanta, Singalong,
Manila, the same must similarly fail. Aside from the self-serving statement that she owns the house,
petitioner merely presented a Metropolitan Waterworks and Sewerage System Official Water
Receipt[64] dated December 7, 1979, a water installation Receipt[65] dated August 22, 1979, and a
Manila Electric Company (Meralco) Warrant[66] to purchase a stock of Meralco Securities Corporation
dated December 24, 1975, all in her name, to establish her claim. Suffice it to state, petitioners evidence
does not meet the quantum of proof necessary to establish that she is the rightful owner of the
aforesaid house. At best, they prove that she resided in the aforesaid house sometime in the 1970s or
long before she filed the subject complaint on August 25, 1989. Basic is the rule that in civil cases, the
burden of proof is on the plaintiff to establish her case by a preponderance of evidence. If she claims a
right granted or created by law, she must prove her claim by competent evidence. She must rely on the
strength of her own evidence and not on the weakness of that of her opponent.[67] This, petitioner
failed to do.

WHEREFORE, the petition is DENIED. The September 14, 2000 Decision of the Court of Appeals in CA-
G.R. CV No. 47487 which affirmed the August 8, 1994 Decision of the Regional Court of Manila, Branch
7, in Civil Case No. 89-50138, dismissing the complaint, and ordering petitioner to pay P50,000.00 as
moral damages, P10,000.00 as attorneys fees and costs of the suit, and its May 28, 2001 Resolution
denying petitioners motion for reconsideration, are AFFIRMED.

Costs against petitioner.

SO ORDERED.

G.R. No. 176439 January 15, 2014

THE PRESIDENT OF THE CHURCH OF JESUS CHRIST OF LATTER DAY SAINTS, Petitioner,
vs.
BTL CONSTRUCTION CORPORATION, Respondent.

x-----------------------x

G.R. No. 176718

BTL CONSTRUCTION CORPORATION, Petitioner,

vs.
THE PRESIDENT OF THE MANILA MISSION OF THE CHURCH OF JESUS CHRIST OF LATTER DAY SAINTS and
BPI-MS INSURANCE CORPORATION, Respondents.

DECISION

PERLAS-BERNABE, J.:

Before the Court are consolidated petitions for review on certiorari1 both assailing the Decision2 dated
August 15, 2006 and Resolution3 dated January 26, 2007 of the Court of Appeals (CA) in CA-G.R. SP No.
84068 which modified the Decision4 dated April 27, 2004 of the Construction Industry Arbitration
Commission (CIAC), awarding the following amounts: (a) 1,248,179.87 as 10% retention money, and
1,612,017.74 as unpaid balance of the original contract price in favor of BTL Construction Corporation
(BTL); and (b) 526,400.00 as cost overrun, 300,533.49 as overpayment for the works taken in the
change orders subject of these cases, and 1,800,560.00 as liquidated damages in favor of the Church of
Jesus Christ of Latter Day Saints5 (COJCOLDS).

The Facts

On January 10, 2000, COJCOLDS and BTL entered into a Construction Contract6 (Contract) for the latters
construction of the formers meetinghouse facility at Barangay Cabug, Medina, Misamis Oriental
(Medina Project). The contract price was set at 12,680,000.00 (contract price), and the construction
period from January 15 to September 15, 2000.7 However, due to bad weather conditions, power
failures, and revisions in the construction plans (as per Change Order Nos. 1 to 12 agreed upon by the
parties),8 among others, the completion date of the Medina Project was extended.

On May 18, 2001, BTL informed COJCOLDS that it suffered financial losses from another project (i.e., the
Pelaez Arcade II Project) and thereby requested that it be allowed to: (a) bill COJCOLDS based on 95%
and 100% completion of the Medina Project; and (b) execute deeds of assignment in favor of its
suppliers so that they may collect any eventual payments directly from COJCOLDS.9 COJCOLDS granted
said request which BTL, in turn, acknowledged.10

On August 13, 2001, BTL ceased its operations in the Medina Project because of its lack of funds to
advance the cost of labor necessary to complete the said project, as well as the supervening increase in
the prices of materials and other items for construction.11 Consequently, COJCOLDS terminated its
Contract with BTL12 on August 17, 2001 and, thereafter, engaged the services of another contractor,
Vigor Construction (Vigor), to complete the Medina Project.13

On November 12, 2003, BTL filed a complaint against COJCOLDS before the CIAC, claiming a total
amount of 28,716,775.40 broken down as follows: (a) 12,464,005.11 as cost of labor, materials,
equipment, overhead expenses, lost profits and interests; (b) 1,248,179.87 as the 10% retention
money stipulated in the contract; (c) 373,838.42 as interest on said retention money; (d )
14,330,752.00 as actual damages;14 (e) 300,000.00 as attorneys fees; (f ) moral and exemplary
damages; and (g) costs of arbitration.15

For its part, COJCOLDS filed its answer with compulsory counterclaim, praying for the award of
4,134,693.49 which consists of: (a) 2,307,760.00 as liquidated damages in view of BTLs delay in
completing the pending project; (b) 300,533.49 as reimbursement of the payments it directly made to
BTLs suppliers as per the latters request; (c) 526,400.00 as cost overrun; and (d) 1,000,000.00 as
attorneys fees.16

During the preliminary conference held on February 10, 2004, the parties agreed to a Terms of
Reference (TOR)17 which was later amended on March 4, 2004.18 Under the amended TOR, it was
stipulated that the parties relationship with respect to the Medina Project is governed by, among
others, the Contract,19 and the General Conditions of the Contract20 (General Conditions). They also
stipulated that 98% of the said project had been completed.

The CIAC Ruling

In a Decision21 dated April 27, 2004, the CIAC found both parties claims to be partly meritorious and
thus ordered: (a) COJCOLDS to pay BTL the amount of 2,760,838.79 as the unpaid balance of the
original contract price, plus the unpaid additional works, and 300,000.00 as attorneys fees; and (b) BTL
to pay COJCOLDS the amount of 1,191,920.00 as liquidated damages, and 300,533.49 as
reimbursement of the balance of the latters direct payments to the formers suppliers.22

Based on the parties stipulations, COJCOLDS was found liable only for 98% of the original contract price
(i.e., 12,680,000.00) in the amount of 12,426,400.00. Considering its previous payments in the total
amount of 10,814,382.26, COJCOLDS was then ordered to pay BTL the unpaid balance of
1,612,017.74, as well as the costs of the additional works made on the Medina Project, particularly,
804,460.8923 for the concrete retaining wall, and 344,360.16 for the unpaid balances from the works
done under Change Order Nos. 8 to 12.24 On the other hand, BTL was ordered to pay COJCOLDS
liquidated damages at the rate of 12,680.00 per day, or a total of 1,191,920.00, pursuant to Article
3(B) of the Contract as well as Article 29.04 of the General Conditions, due to the formers 94-day delay,
notwithstanding several extensions (238 days in total).25

Dissatisfied with the CIACs ruling, COJCOLDS elevated the matter to the CA.26

The CA Ruling

In a Decision27 dated August 15, 2006, the CA modified the CIACs ruling in that it ordered COJCOLDS
not only to pay BTL the amount of 1,612,017.74 representing the unpaid portion of 98% of the contract
price, but also to return to BTL the 10% retention money in the amount of 1,248,179.87, after
deducting the cost overrun of 526,400.00 that BTL was held to shoulder as per Article 3(E) of the
Contract28 (under which COJCOLDS was allowed to engage the services of another contractor, i.e.,
Vigor, to complete the Medina Project using the 10% retention amount).

Meanwhile, the CA ordered BTL to return to COJCOLDS the amount of 300,533.49 which was found to
be an overpayment made by the latter pursuant to the change orders.29

The CA also increased the award of liquidated damages in COJCOLDSs favor from 1,191,920.00 to
1,800,560.00 since BTL was actually in delay for 142 days (and not 94 days as found by the CIAC). The
CA clarified that pursuant to Article 21.04(A) of the General Conditions as well as the practice in the
construction industry, the architects recommendation regarding the grant of extensions should be
controlling and thus BTL was only given an extension of 190 days (and not 238 days as found by the
CIAC).30

Further, the CA deleted the awards for the additional works (i.e., 804,460.89 for the concrete retaining
wall, and 344,360.16 for the unpaid balances from the works taken under Change Order Nos. 8 to 12)
adjudged by the CIAC in favor of COJCOLDS because: (a) the retaining wall should be properly deemed as
part of the original works, considering that it was not covered by any change order, unlike the other
additional works performed on the Medina Project; and (b) there is no basis in saying that COJCOLDS
failed to pay the balance for the works taken under Change Order Nos. 8 to 12, considering that
COJCOLDS paid such balance directly to BTLs suppliers, pursuant to BTLs May 18, 2001 request to
COJCOLDS.31

Finally, the CA deleted the award of attorneys fees in BTLs favor as COJCOLDS was not in bad faith in
refusing to pay the formers claims.
Dissatisfied, both parties moved for reconsideration, which were, however, denied in a Resolution32
dated January 26, 2007, hence, these petitions.33

The Issues Before the Court

The issues raised for the Courts resolution are as follows: (a) whether or not the 10% retention money
that COJCOLDS was ordered to release in favor of BTL is separate and distinct from the unpaid balance
of the contract price amounting to 1,612,017.74; (b) whether or not COJCOLDS is liable for the
"additional works" performed by BTL, specifically the concrete retaining wall and the works taken under
Change Order Nos. 8 to 12; (c) whether or not BTL incurred delay in its obligation to complete the
Medina Project and thus, must pay COJCOLDS liquidated damages at the rate of 12,680.00 for every
day of delay; (d) whether or not BTL is liable to pay COJCOLDS the value of cost overrun in the amount of
526,400.00; (e) whether or not BTL received overpayments in the change orders from COJCOLDS
amounting to 300,533.49 and thus, should be held liable to return the same; and (f ) whether or not
the parties are liable to pay each others attorneys fees, arbitration costs, and costs of suit.

The Courts Ruling

COJCOLDSs petition in G.R. No. 176439 is partly meritorious, while BTLs petition in G.R. No. 176718 is
without merit. The Court shall resolve the above-mentioned issues in the order that they are mentioned.

I. Liabilities of COJCOLDS to BTL.

a. The 10% Retention Money and the

b. Unpaid Balance of the Contract Price.

In its petition, COJCOLDS concedes that it has yet to pay BTL the unpaid balance of the contract price
amounting to 1,612,017.74 and that it has withheld the 10% retention money in the amount of
1,248,179.87 which should be returned to BTL. It, however, argues that the CA erred in ruling that the
retention money should be paid in addition to the unpaid balance of the contract price. COJCOLDS
contends that treating the retention money as a separate and distinct liability from the unpaid balance
would unduly increase its total liability from the Medina Project (including the amount of
10,814,382.26 which it had already paid to BTL) from 12,426,400.00 to 13,674,579.87.34

The Court agrees with COJCOLDS.

In H.L. Carlos Construction, Inc. v. Marina Properties Corp.,35 the Court held that in the construction
industry, the 10% retention money is a portion of the contract price automatically deducted from the
contractors billings, as security for the execution of corrective work if any becomes necessary.36

Articles 3(E) and 5 of the Contract and Article 22.14 of the General Conditions govern the application of
the 10% retention money in these cases, viz.:

CONSTRUCTION CONTRACT

xxxx
ARTICLE 3. TIME AND COMPLETION AND SCHEDULE OF CONSTRUCTION

xxxx

E. The CONTRACTORS TEN (10) percent retention under Article V hereof shall be retained by the
OWNER until all items on the Substantial Inspection are satisfactorily completed and accepted by the
OWNER. If the CONTRACTOR shall refuse or fail to complete the Substantial Inspection punchlist, within
the time fixed by a written notice, the OWNER shall then have the right to hire the services of another
contractor to complete the same using the contractors TEN (10) percent retention amount and the
balance, if any, shall be returned to the CONTRACTOR.37

xxxx

ARTICLE 5. PAYMENTS

The OWNER shall make payment on account of this Contract based on the value of work accomplished
less TEN (10) percent retention and Expanded Withholding Tax (One percent of the amount due), for the
duration of the Contract. The percentage value of work to be paid is in order of 15%, 30%, 45%, 60%,
75%, 90% and 100% accomplishments.

xxxx

The full and final payment, together with the ten (10) percent retention shall be paid to the
CONTRACTOR as provided for and upon compliance of all requisites under Article 22.11 of the General
Conditions.38

xxxx

GENERAL CONDITIONS OF THE CONTRACT

xxxx

22.14 RELEASE OF RETENTION

The amount retained by the owner under the provision of the Contract shall be released within three (3)
months after the date of final payment.39

xxxx

A reading of the foregoing contractual provisions would reveal that the nature of the 10% retention
money under the parties Contract is no different from the description laid down by jurisprudence that
it is a portion of the contract price withheld from the contractor to function as a security for any
corrective work to be performed on the infrastructure covered by a construction contract. As such, the
10% retention money should not be treated as a separate and distinct liability of COJCOLDS to BTL as it
merely forms part of the contract price. While COJCOLDS is bound to eventually return to BTL the
amount of 1,248,179.87 as retention money, the said amount should be automatically deducted from
BTLs outstanding billings. Ultimately, COJCOLDSs total liability to BTL should only be pegged at
1,612,017.74, representing the unpaid balance of 98% of the contract price, inclusive of the 10%
retention money.

b. Costs of Additional Works: Price of the

Concrete Retaining Wall and the Works
Under Change Order Nos. 8 to 12.

BTL claims that the construction of the concrete retaining wall was not part of the original plans of the
Contract and that there was evident bad faith on the part of COJCOLDSs architect when he inserted the
plan on the concrete retaining wall sometime after the contract signing of the parties to make it appear
as part of the original plans in order to cover up for his oversight.40

BTLs claim is untenable.

Article 172441 of the Civil Code governs the recovery of additional costs in contracts for a stipulated
price (such as fixed lump-sum contracts), as well as the increase in price for any additional work due to a
subsequent change in the original plans and specifications. Based on the same provision, such added
costs can only be allowed upon the: (a) written authority from the developer or project owner ordering
or allowing the written changes in work; and (b) written agreement of parties with regard to the
increase in price or cost due to the change in work or design modification. Case law instructs that
compliance with these two (2) requisites is a condition precedent for recovery. The absence of one or
the other condition thus bars the claim of additional costs. Notably, neither the authority for the
changes made nor the additional price to be paid therefor may be proved by any evidence other than
the written authority and agreement as above-mentioned.42

In these cases, records reveal that there is neither a written authorization nor agreement covering the
additional price to be paid for the concrete retaining wall. This confirms the CAs finding that the
construction of the perimeter wall of the Medina Project, which is included in the original plans and
specifications for the same, already subsumes the construction of the concrete retaining wall.43
Accordingly, COJCOLDS should not pay the amount of 804,460.89 claimed by BTL as additional cost for
the same.

In similar regard, the COJCOLDS should not be held liable for the costs of the additional works taken
under Change Order Nos. 8 to 12 amounting to 344,360.16 as claimed by BTL. As correctly observed by
the CA, BTL had, in fact, requested COJCOLDS to make the payments therefor directly to its suppliers in
view of its financial losses in another project.44 Hence, considering that COJCOLDSs payment to BTLs
suppliers already covered the costs of said additional works upon its own request and to its own
credit,45 BTL maintains no right to pursue such claim.

With BTLs claims for the costs of additional works herein denied, COJCOLDSs total liability to BTL thus
stands in the amount of 1,612,017.74, which represents the unpaid balance of 98% of the contract
price, inclusive of the 10% retention money, as previously stated.

Having resolved the foregoing issues, the Court now proceeds to determine BTLs liabilities to
COJCOLDS.

II. Liabilities of BTL to COJCOLDS.

a. Liquidated Damages Due to Delay.

BTLs liability to COJCOLDS for liquidated damages is a result of its delay in the performance of its
obligations under the Contract. While the fact of BTLs delay has not been seriously disputed in these
cases, the Court must, however, resolve the extent of such delay in view of the conflicting findings of the
CIAC and the CA on the matter.

In these cases, records reveal that BTL sought for a 304-day extension of the original completion
deadline of September 15, 2000, broken down as follows: (a) 184 days as per Change Order Nos. 1 to
6;46 and (b) 120 days as per Change Order Nos. 8 to 12.47 However, the architect only recommended
that COJCOLDS should only grant BTL extensions of 160 days for the works to be done under Change
Order Nos. 1 to 6 and 30 days for Change Order Nos. 8 to 12, or a total of 190 days. Since Article 21.0448
of the General Conditions expressly recognizes that the architects recommendations regarding
extensions of time should be controlling, the Court upholds the CAs finding that BTL was only granted a
190-day extension (from the original completion deadline) to finish the Medina Project, or until March
24, 2001. Despite such extension, BTL nevertheless failed to complete the same. In fact, as the parties
themselves admitted, the Medina Project was only 98% complete when the Contract was terminated.
Based on the foregoing, the Court thus finds that BTLs delay should be reckoned from March 25, 2001
(or the day after the above-stated 190-day extension) up until August 17, 2001 (or the day when the
Contract was terminated), or a total of 146 days (length of delay). Applying Article 3(B)49 of the Contract
and Article 29.0450 of the General Conditions, BTL is therefore liable to pay COJCOLDS liquidated
damages in the amount of 12,680.00 multiplied by the length of delay, resulting in a total of
1,851,280.00.

b. Cost Overrun.

Due to BTLs delay which impelled COJCOLDS to terminate the Contract and subsequently hire the
services of another contractor, i.e., Vigor, to finish the Medina Project, the Court equally agrees with the
CAs finding that COJCOLDS incurred a cost overrun of 526,400.00. Conformably with Article 3(E)51 of
the Contract and Article 29.0452 of the General Conditions, BTL should therefore reimburse COJCOLDS
the said cost which the latter incurred essentially because of BTLs failure to complete the project as
agreed upon.

c. Overpayments.

Based on the records, BTL charged COJCOLDS the amount of 1,014,469.79 for the modifications
introduced to the Medina Project as indicated in Change Order Nos. 1 to 12.53 In turn, COJCOLDS paid
BTL the amount of 651,727.9154 for the modifications covered by Change Order Nos. 1 to 7 and no
longer paid for those covered by Change Order Nos. 8 to 12 because, as discussed earlier, COJCOLDS
diverted such payments directly to BTLs suppliers upon its own request and to its own credit.
Accordingly, COJCOLDS paid 663,275.37 to these suppliers, resulting in COJCOLDS actually paying a
total of 1,315,003.28 for the works taken under Change Order Nos. 1 to 12.55 This means that BTL was
effectively overpaid the amount of 300,533.49, and is therefore obliged to return the same to
COJCOLDS pursuant to Article 2154 of the Civil Code which states that "[i]f something is received when
there is no right to demand it, and it was unduly delivered through mistake, the obligation to return it
arises."
To recapitulate, the Court sustains the following liabilities of BTL to COJCOLDS: (a) 1,851,280.00 as
liquidated damages; (b) 526,400.00 as cost overrun; and (c) 300,533.49 as overpayment under
Change Order Nos. 1 to 12.

III. Mutual Liabilities: Attorneys Fees,

Arbitration Costs, and Costs of Suit.

The general rule is that attorneys fees cannot be recovered as part of damages because of the policy
that no premium should be placed on the right to litigate. They are not to be awarded every time a party
wins a suit. The power of the court to award attorneys fees under Article 220856 of the Civil Code
demands factual, legal, and equitable justification.1wphi1 Even when a claimant is compelled to litigate
with third persons or to incur expenses to protect his rights, still attorneys fees may not be awarded
where no sufficient showing of bad faith could be reflected in a partys persistence in a case other than
an erroneous conviction of the righteousness of his cause.57

In these cases, the Court observes that neither party was shown to have acted in bad faith in pursuing
their respective claims against each other. The existence of bad faith is negated by the fact that the
CIAC, the CA, and the Court have all found the parties original claims to be partially meritorious. Thus,
absent no cogent reason to hold otherwise, the Court deems it inappropriate to award attorneys fees in
favor of either party.

Finally, in view of their legitimate claims against each other, each party should bear its own arbitration
costs and costs of suit.58

WHEREFORE, the petition in G.R. No. 176439 is PARTLY GRANTED, while the petition in G.R. No. 176718
is DENIED. The Decision dated August 15, 2006 and Resolution dated January 26, 2007 of the Court of
Appeals (CA) m CA-G.R. SP No. 84068 are hereby MODIFIED as follows:

(a) COJCOLDS is ORDERED to pay BTL the amount of 1,612,017.74 representing the unpaid balance of
98% of the contract price, inclusive of the 10 retention money;

(b) BTL is ORDERED to pay COJCOLDS the amounts of 1,851,280.00 as liquidated damages, 526,400.00
as cost overrun, and 300,533.49 as reimbursement for the overpayment in the works taken under
Change Order Nos. 1 to 12.

(c) Each party shall bear its own costs.

SO ORDERED.

G.R. No. 132681 December 3, 2001

RICKY Q. QUILALA, petitioner,

vs.
GLICERIA ALCANTARA, LEONORA ALCANTARA, INES REYES and JOSE REYES, respondent.

YNARES-SANTIAGO, J.:
On February 20, 1981, Catalina Quilala executed a "Donation of Real Property Inter Vivos" in favor of
Violeta Quilala over a parcel of land located in Sta. Cruz, Manila, containing an area of 94 square meters,
and registered in her name under Transfer Certificate of Title No. 17214 of the Register of Deeds for
Manila.

The "Donation of Real Property Inter Vivos" consists of two pages. The first page contains the deed of
donation itself, and is signed on the bottom portion by Catalina Quilala as donor, Violeta Quilala as
donee, and two instrumental witnesses.1 The second page contains the Acknowledgment, which states
merely that Catalina Quilala personally appeared before the notary public and acknowledged that the
donation was her free and voluntary act and deed. There appear on the left-hand margin of the second
page the signatures of Catalina Quilala and one of the witnesses, and on the right-hand margin the
signatures of Violeta Quilala and the other witness.2 The Acknowledgment reads:

REPUBLIC OF THE PHILIPPINES )

QUEZON CITY ) S.S.

Before Me, a Notary Public, for and in the City of Quezon, Philippines, this 20th day of Feb. 1981,
personally appeared CATALINA QUILALA, with Residence Certificate No. 19055265 issued at Quezon City
on February 4, 1981, known to me and to me known to be the same person who executed the foregoing
instruments and acknowledged to me that the same is her own free and voluntary act and deed.

I hereby certify that this instrument consisting of two (2) pages, including the page on which this
acknowledgment is written, has been signed by CATALINA QUILALA and her instrumental witnesses at
the end thereof and on the left-hand margin of page 2 and both pages have been sealed with my
notarial seal.

In witness whereof, I have hereunto set my hand, in the City of Quezon, Philippines, this 20th day of
Feb., 1981.

(SGD.) NOTARY PUBLIC

Until December 31, 1981

(illegible)

DOC NO. 22;

PAGE NO. 6;

BOOK NO. XV;

SERIES OF 1981.

The deed of donation was registered with the Register of Deeds and, in due course, TCT No. 17214 was
cancelled and TCT No. 143015 was issued in the name of Violeta Quilala.

On November 7, 1983, Catalina Quilala died. Violeta Quilala likewise died on May 22, 1984. Petitioner
Ricky Quilala alleges that he is the surviving son of Violeta Quilala.
Meanwhile, respondents Gliceria Alcantara, Leonora Alcantara, Ines Reyes and Juan Reyes, claiming to
be Catalina's only surviving relatives within the fourth civil degree of consanguinity, executed a deed of
extrajudicial settlement of estate, dividing and adjudicating unto themselves the above-described
property.

On September 13, 1984, respondents instituted against petitioner and Guillermo T. San Pedro, the
Registrar of Deeds of Manila, an action for the declaration of nullity of the donation inter vivos, and for
the cancellation of TCT No. 143015 in the name of Violeta Quilala. The case was docketed as Civil Case
No. 84-26603 of the Regional Trial Court of Manila, Branch 17. Subsequently, respondents withdrew
their complaint as against Guillermo T. San Pedro and he was dropped as a party-defendant.

The trial court found that the deed of donation, although signed by both Catalina and Violeta, was
acknowledged before a notary public only by the donor, Catalina. Consequently, there was no
acceptance by Violeta of the donation in a public instrument, thus rendering the donation null and void.
Furthermore, the trial court held that nowhere in Catalina's SSS records does it appear that Violeta was
Catalina's daughter. Rather, Violeta was referred to therein as an adopted child, but there was no
positive evidence that the adoption was legal. On the other hand, the trial court found that respondents
were first cousins of Catalina Quilala. However, since it appeared that Catalina died leaving a will, the
trial court ruled that respondents' deed of extrajudicial settlement can not be registered. The trial court
rendered judgment as follows:

WHEREFORE, judgment is hereby rendered in favor of plaintiffs Gliceria Alcantara, Leonarda Alcantara,
Ines Reyes and Juan Reyes and against defendant Ricky A. Quilala, as follows:

1. Declaring null and void the deed of donation of real property inter vivos executed on February
20, 1981 by Catalina Quilala in favor of Violeta Quilala (Exhs. A as well as 11 and 11-A.);

2. Ordering the Register of Deeds of Manila to cancel Transfer Certificate of Title No. 143015 in the
name of Violeta Quilala and to issue a transfer certificate of title in the name of the Estate of Catalina
Quilala;.

3. Dismissing the complaint insofar as it seeks the registration of the deed of extrajudicial
settlement (Exhs. B and B-1,) and the issuance by the Register of Deeds of Manila of a transfer certificate
of title in the names of the plaintiffs; and

4. Dismissing the counterclaim of defendant Ricky A. Quilala.

No costs.

SO ORDERED.3

Petitioner appealed the aforesaid decision. On July 30, 1997, the Court of Appeals rendered a decision
affirming with modification the decision of the trial court by dismissing the complaint for lack of cause of
action without prejudice to the filing of probate proceedings of Catalina's alleged last will and
testament.4

WHEREFORE, the appealed decision is hereby AFFIRMED with the following MODIFICATION:
(3) DISMISSING the complaint for lack of cause of action without prejudice to the filing of the
necessary probate proceedings by the interested parties so as not to render nugatory the right of the
lawful heirs.

Petitioner filed a motion for reconsideration, which the Court of Appeals denied on February 11, 1998.5
Hence, this petition for review, raising the following assignment of errors:

A. THE COURT OF APPEALS ERRED IN RULING THAT THE DEED OF DONATION OF REAL PROPERTY
INTER-VIVOS IS NOT REGISTRABLE.

B. THE COURT OF APPEALS ERRED ON UPHOLDING THE LOWER COURT'S RULING THAT VIOLETA
QUILALA IS NOT THE DAUGHTER OF CATALINA QUILALA.6

The principal issue raised is the validity of the donation executed by Catalina in favor of Violeta. Under
Article 749 of the Civil Code, the donation of an immovable must be made in a public instrument in
order to be valid,7 specifying therein the property donated and the value of the charges which the
donee must satisfy. As a mode of acquiring ownership, donation results in an effective transfer of title
over the property from the donor to the donee,8 and is perfected from the moment the donor knows of
the acceptance by the donee,9 provided the donee is not disqualified or prohibited by law from
accepting the donation. Once the donation is accepted, it is generally considered irrevocable,10 and the
donee becomes the absolute owner of the property.11 The acceptance, to be valid, must be made
during the lifetime of both the donor and the donee.12 It may be made in the same deed or in a
separate public document,13 and the donor must know the acceptance by the donee.14

In the case at bar, the deed of donation contained the number of the certificate of title as well as the
technical description of the real property donated. It stipulated that the donation was made for and in
consideration of the "love and affection which the DONEE inspires in the DONOR, and as an act of
liberality and generosity."15 This was sufficient cause for a donation. Indeed, donation is legally defined
as "an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who
accepts it."16

The donee's acceptance of the donation was explicitly manifested in the penultimate paragraph of the
deed, which reads:

That the DONEE hereby receives and accepts the gift and donation made in her favor by the DONOR and
she hereby expresses her appreciation and gratefulness for the kindness and generosity of the
DONOR.17

Below the terms and stipulations of the donation, the donor, donee and their witnesses affixed their
signature. However, the Acknowledgment appearing on the second page mentioned only the donor,
Catalina Quilala. Thus, the trial court ruled that for Violeta's failure to acknowledge her acceptance
before the notary public, the same was set forth merely on a private instrument, i.e., the first page of
the instrument. We disagree.

The pertinent provision is Section 112, paragraph 2 of Presidential Decree No. 1529, which states:
Deeds, conveyances, encumbrances, discharges, powers of attorney and other voluntary instruments,
whether affecting registered or unregistered land, executed in accordance with law in the form of public
instruments shall be registrable: Provided, that, every such instrument shall be signed by person or
persons executing the same in the presence of at least two witnesses who shall likewise sign thereon,
and shall be acknowledged to be the free act and deed of the person or persons executing the same
before a notary public or other public officer authorized by law to take acknowledgment. Where the
instrument so acknowledged consists of two or more pages including the page whereon
acknowledgment is written, each page of the copy which is to be registered in the office of the Register
of Deeds, or if registration is not contemplated, each page of the copy to be kept by the notary public,
except the page where the signatures already appear at the foot of the instrument shall be signed on
the left margin thereof by the person or persons executing the instrument and their witnesses, and all
the pages sealed with the notarial seal, and this fact as well as the number of pages shall be stated in the
acknowledgment. Where the instrument acknowledged relates to a sale, transfer, mortgage or
encumbrance of two or more parcels of land, the number thereof shall likewise be set forth in said
acknowledgment." (italics supplied).

As stated above, the second page of the deed of donation, on which the Acknowledgment appears, was
signed by the donor and one witness on the left-hand margin, and by the donee and the other witness
on the right hand margin. Surely, the requirement that the contracting parties and their witnesses
should sign on the left-hand margin of the instrument is not absolute. The intendment of the law merely
is to ensure that each and every page of the instrument is authenticated by the parties. The requirement
is designed to avoid the falsification of the contract after the same has already been duly executed by
the parties. Hence, a contracting party affixes his signature on each page of the instrument to certify
that he is agreeing to everything that is written thereon at the time of signing.

Simply put, the specification of the location of the signature is merely directory. The fact that one of the
parties signs on the wrong side of the page does not invalidate the document. The purpose of
authenticating the page is served, and the requirement in the above-quoted provision is deemed
substantially complied with.

In the same vein, the lack of an acknowledgment by the donee before the notary public does not also
render the donation null and void. The instrument should be treated in its entirety. It cannot be
considered a private document in part and a public document in another part. The fact that it was
acknowledged before a notary public converts the deed of donation in its entirety a public instrument.
The fact that the donee was not mentioned by the notary public in the acknowledgment is of no
moment. To be sure, it is the conveyance that should be acknowledged as a free and voluntary act. In
any event, the donee signed on the second page, which contains the Acknowledgment only. Her
acceptance, which is explicitly set forth on the first page of the notarized deed of donation, was made in
a public instrument.

It should be stressed that this Court, not being a trier of facts, can not make a determination of whether
Violeta was the daughter of Catalina, or whether petitioner is the son of Violeta. These issues should be
ventilated in the appropriate probate or settlement proceedings affecting the respective estates of
Catalina and Violeta. Suffice it to state that the donation, which we declare herein to be valid, will still be
subjected to a test on its inofficiousness under Article 771,18 in relation to Articles 752, 911 and 912 of
the Civil Code. Moreover, property donated inter vivos is subject to collation after the donor's death,19
whether the donation was made to a compulsory heir or a stranger,20 unless there is an express
prohibition if that had been the donor's intention.21
WHEREFORE, in view of the foregoing, the petition is GRANTED. The appealed decision of the Court of
Appeals , is REVERSED and SET ASIDE, and a new judgment is rendered dismissing Civil Case No. 84-
26603.

SO ORDERED.

G.R. No. 160488 September 3, 2004

FELOMINA1 ABELLANA, petitioner,

vs.
SPOUSES ROMEO PONCE and LUCILA PONCE and the REGISTER OF DEEDS of BUTUAN CITY, respondents.

DECISION

YNARES-SANTIAGO, J.:

This is a petition for review on certiorari assailing the June 16, 2003 decision2 of the Court of Appeals in
CA-G.R. CV No. 69213, which reversed and set aside the August 28, 2000 decision3 of the Regional Trial
Court of Butuan City, Branch 2, in Civil Case No. 4270.

The facts as testified to by petitioner Felomina Abellana are as follows:

On July 15, 1981, Felomina, a spinster, pharmacist and aunt of private respondent Lucila Ponce,
purchased from the late Estela Caldoza-Pacres a 44,2974 square meter agricultural lot5 with the
intention of giving said lot to her niece, Lucila. Thus, in the deed of sale,6 the latter was designated as
the buyer of Lot 3, Pcs-10-000198, covered by Original Certificate of Title No. P-27, Homestead Patent
No. V-1551 and located at Los Angeles, Butuan City.7 The total consideration of the sale was P16,500.00,
but only P4,500.00 was stated in the deed upon the request of the seller.8

Subsequently, Felomina applied for the issuance of title in the name of her niece. On April 28, 1992,
Transfer Certificate of Title (TCT) No. 28749 over the subject lot was issued in the name of Lucila.10 Said
title, however, remained in the possession of Felomina who developed the lot through Juanario
Torreon11 and paid real property taxes thereon.12

The relationship between Felomina and respondent spouses Romeo and Lucila Ponce, however, turned
sour. The latter allegedly became disrespectful and ungrateful to the point of hurling her insults and
even attempting to hurt her physically. Hence, Felomina filed the instant case for revocation of implied
trust to recover legal title over the property.13

Private respondent spouses Lucila, also a pharmacist, and Romeo, a marine engineer, on the other hand,
claimed that the purchase price of the lot was only P4,500.00 and that it was them who paid the same.
The payment and signing of the deed of sale allegedly took place in the office of Atty. Teodoro Emboy in
the presence of the seller and her siblings namely, Aquilino Caldoza and the late Lilia Caldoza.14

A year later, Juanario approached Lucila and volunteered to till the lot, to which she agreed.15 In 1987,
the spouses consented to Felominas proposal to develop and lease the lot. They, however, shouldered
the real property taxes on the lot, which was paid through Felomina. In 1990, the spouses demanded
rental from Felomina but she refused to pay because her agricultural endeavor was allegedly not
profitable.16

When Lucila learned that a certificate of title in her name had already been issued, she confronted
Felomina who claimed that she already gave her the title. Thinking that she might have misplaced the
title, Lucila executed an affidavit of loss which led to the issuance of another certificate of title in her
name.17

On August 28, 2000, the trial court rendered a decision holding that an implied trust existed between
Felomina and Lucila, such that the latter is merely holding the lot for the benefit of the former. It thus
ordered the conveyance of the subject lot in favor of Felomina. The dispositive portion thereof, reads:

IN VIEW OF THE FOREGOING, judgment is hereby rendered declaring, directing and ordering that:

a) An implied trust was created with plaintiff as trustor and private defendant Lucila A. Ponce married to
private defendant Engr. Romeo D. Ponce as trustee pursuant to Article 1448 of the New Civil Code;

b) The implied trust, having been created without the consent of the trustee and without any condition,
is revoked;

c) The private defendants, who are spouses, execute the necessary deed of conveyance in favor of the
plaintiff of the land, covered by and embraced in TCT NO. T-2874, in controversy and in the event
private defendants refuse to execute the deed of conveyance, the public defendant City Register of
Deeds of Butuan to cancel TCT No. T-2874 and issue a new one in lieu thereof in the name of the
plaintiff;

d) The private defendants spouses to pay jointly and severally plaintiff the sum of PhP25,000.00 as
attorneys fees and PhP4,000.00 as expenses of litigation;

e) The dismissal of the counterclaim of private defendants spouses[;] and

f) The private defendants to pay the costs.

SO ORDERED.18

Private respondent spouses appealed to the Court of Appeals which set aside the decision of the trial
court ruling that Felomina failed to prove the existence of an implied trust and upheld respondent
spouses ownership over the litigated lot. The appellate court further held that even assuming that
Felomina paid the purchase price of the lot, the situation falls within the exception stated in Article 1448
of the Civil Code which raises a disputable presumption that the property was purchased by Felomina as
a gift to Lucila whom she considered as her own daughter. The decretal portion thereof, states

WHEREFORE, premises considered, the appealed decision of the Regional Trial Court, Branch 2, Butuan
City, in Civil Case No. 4270, is hereby REVERSED AND SET ASIDE. A new one is heretofore rendered
dismissing the complaint below of plaintiff-appellee, F[e]lomina Abellana.

SO ORDERED.19
Felomina filed a motion for reconsideration but the same was denied.20 Hence, the instant petition.

The issue before us is: Who, as between Felomina and respondent spouses, is the lawful owner of the
controverted lot? To resolve this issue, it is necessary to determine who paid the purchase price of the
lot.

After a thorough examination of the records and transcript of stenographic notes, we find that it was
Felomina and not Lucila who truly purchased the questioned lot from Estela. The positive and consistent
testimony of Felomina alone, that she was the real vendee of the lot, is credible to debunk the contrary
claim of respondent spouses. Indeed, the lone testimony of a witness, if credible, is sufficient as in the
present case.21 Moreover, Aquilino Caldoza, brother of the vendor and one of the witnesses22 to the
deed of sale, categorically declared that Felomina was the buyer and the one who paid the purchase
price to her sister, Estela.23

Then too, Juanario, who was allegedly hired by Lucila to develop the lot, vehemently denied that he
approached and convinced Lucila to let him till the land. According to Juanario, he had never spoken to
Lucila about the lot and it was Felomina who recruited him to be the caretaker of the litigated
property.24

The fact that it was Felomina who bought the lot was further bolstered by her possession of the
following documents from the time of their issuance up to the present, to wit: (1) the transfer certificate
of title25 and tax declaration in the name of Lucila;26 (2) the receipts of real property taxes in the name
of Felomina Abellana for the years 1982-1984, 1992-1994 and 1995;27 and (3) the survey plan of the
lot.28

Having determined that it was Felomina who paid the purchase price of the subject lot, the next
question to resolve is the nature of the transaction between her and Lucila.

It appears that Felomina, being of advanced age29 with no family of her own, used to purchase
properties and afterwards give them to her nieces. In fact, aside from the lot she bought for Lucila
(marked as Exhibit "R-2"), she also purchased 2 lots, one from Aquilino Caldoza (marked as Exhibit "R-1")
and the other from Domiciano Caldoza (marked as Exhibit "R-3"), which she gave to Zaida Bascones
(sister of Lucila), thus:

Q I am showing to you again Exhibit R, according to you[,] you bought Exhibits R-1, R-2 and R-3, do you
remember that?

A Yes sir.

xxx xxx xxx

Q Aquilin[o] Caldoza conveyed this land in Exhibit R-1 to you?

A Yes, sir.

Q Is this now titled in your name?

A No. I was planning to give this land to my nieces. One of which [was] already given to Mrs. [Lucila]
Ponce.

Q I am talking only about this lot in Exhibit R-1[.]

A Not in my name.

Q In whose name was this lot in Exhibit R-1 now?

A In the name of Zaida Bascones.

Q Who prepared the deed of sale?

A At the start it was in the name of Rudy [Torreon].30 Because Rudy [Torreon] knew that there is some
trouble already about that lot he made a deed of sale to the name of Zaida Bascones, which I planned to
give that land to her (sic).

Q As regards Exhibit R-1, you bought it actually?

A Yes, sir.

Q But the original deed of sale was in the name of Rudolfo [Torreon]?

A Yes, sir.

Q And later on Rudolfo [Torreon] again transferred it to Zaida Bascones?

A Yes, sir.31

Likewise, in the case of Lucila, though it was Felomina who paid for the lot, she had Lucila designated in
the deed as the vendee thereof and had the title of the lot issued in Lucilas name. It is clear therefore
that Felomina donated the land to Lucila. This is evident from her declarations, viz:

Witness

A In 1981 there was a riceland offered so I told her that I will buy that land and I will give to her later
(sic), because since 1981 up to 1992 Mrs. Lucila Ponce has no job.

Q Where is the land located?

A In Los Angeles, Butuan City.

Q Who was the owner of this land?

A The owner of that land is Mrs. Estela Caldoza-Pacr[e]s.

The husband is Pacr[e]s.

xxx xxx xxx

Q What did you do with this land belonging to Mrs. Estela-Caldoza- Pacr[e]s?

A I paid the lot, then worked the lot, since at the start of my buying the lot until now (sic).

Q You said that you told Lucila Ponce that you would give the land to her later on, what did you do in
connection with this intention of yours to give the land to her?

A So I put the name of the title in her name in good faith (sic).

Q You mean to tell the court that when you purchased this land located at Los Angeles, Butuan City, the
instrument of sale or the deed of sale was in the name of Lucila Ponce?

A Yes, sir.32

xxx xxx xxx

Q Did you not ask your adviser Rudolfo [Torreon] whether it was wise for you to place the property in
the name of Lucila Ponce when you are the one who is the owner?

A Because we have really the intention to give it to her.33

Generally, contracts are obligatory in whatever form they may have been entered into, provided all the
essential requisites for their validity are present. When, however, the law requires that a contract be in
some form in order that it may be valid, that requirement is absolute and indispensable. Its non-
observance renders the contract void and of no effect.34 Thus, under Article 749 of the Civil Code

Article 749. In order that the donation of an immovable property may be valid, it must be made in a
public document, specifying therein the property donated and the value of the charges which the donee
must satisfy.

The acceptance may be made in the same deed of donation or in a separate public document, but it
shall not take effect unless it is done during the lifetime of the donor.

If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic
form, and this step shall be noted in both instruments.

In the instant case, what transpired between Felomina and Lucila was a donation of an immovable
property which was not embodied in a public instrument as required by the foregoing article. Being an
oral donation, the transaction was void.35 Moreover, even if Felomina enjoyed the fruits of the land
with the intention of giving effect to the donation after her demise, the conveyance is still a void
donation mortis causa, for non-compliance with the formalities of a will.36 No valid title passed
regardless of the intention of Felomina to donate the property to Lucila, because the naked intent to
convey without the required solemnities does not suffice for gratuitous alienations, even as between
the parties inter se.37 At any rate, Felomina now seeks to recover title over the property because of the
alleged ingratitude of the respondent spouses.
Unlike ordinary contracts (which are perfected by the concurrence of the requisites of consent, object
and cause pursuant to Article 131838 of the Civil Code), solemn contracts like donations are perfected
only upon compliance with the legal formalities under Articles 74839 and 749.40 Otherwise stated,
absent the solemnity requirements for validity, the mere intention of the parties does not give rise to a
contract. The oral donation in the case at bar is therefore legally inexistent and an action for the
declaration of the inexistence of a contract does not prescribe.41 Hence, Felomina can still recover title
from Lucila.

Article 144842 of the Civil Code on implied trust finds no application in the instant case. The concept of
implied trusts is that from the facts and circumstances of a given case, the existence of a trust
relationship is inferred in order to effect the presumed intention of the parties.43 Thus, one of the
recognized exceptions to the establishment of an implied trust is where a contrary intention is
proved,44 as in the present case. From the testimony of Felomina herself, she wanted to give the lot to
Lucila as a gift. To her mind, the execution of a deed with Lucila as the buyer and the subsequent
issuance of title in the latters name were the acts that would effectuate her generosity. In so carrying
out what she conceived, Felomina evidently displayed her unequivocal intention to transfer ownership
of the lot to Lucila and not merely to constitute her as a trustee thereof. It was only when their
relationship soured that she sought to revoke the donation on the theory of implied trust, though as
previously discussed, there is nothing to revoke because the donation was never perfected.

In declaring Lucila as the owner of the disputed lot, the Court of Appeals applied, among others, the
second sentence of Article 1448 which states

"x x x However, if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the
one paying the price of the sale, no trust is implied by law, it being disputably presumed that there is a
gift in favor of the child."

Said presumption also arises where the property is given to a person to whom the person paying the
price stands in loco parentis or as a substitute parent.45

The abovecited provision, however, is also not applicable here because, first, it was not established that
Felomina stood as a substitute parent of Lucila; and second, even assuming that she did, the donation is
still void because the transfer and acceptance was not embodied in a public instrument. We note that
said provision merely raised a presumption that the conveyance was a gift but nothing therein exempts
the parties from complying with the formalities of a donation. Dispensation of such solemnities would
give rise to anomalous situations where the formalities of a donation and a will in donations inter vivos,
and donations mortis causa, respectively, would be done away with when the transfer of the property is
made in favor of a child or one to whom the donor stands in loco parentis. Such a scenario is clearly
repugnant to the mandatory nature of the law on donation.

While Felomina sought to recover the litigated lot on the ground of implied trust and not on the
invalidity of donation, the Court is clothed with ample authority to address the latter issue in order to
arrive at a just decision that completely disposes of the controversy.46 Since rules of procedure are
mere tools designed to facilitate the attainment of justice, they must be applied in a way that equitably
and completely resolve the rights and obligations of the parties.47

As to the trial courts award of attorneys fees and litigation expenses, the same should be deleted for
lack of basis. Aside from the allegations in the complaint, no evidence was presented in support of said
claims. The trial court made these awards in the dispositive portion of its decision without stating any
justification therefor in the ratio decidendi. Their deletion is therefore proper.48

Finally, in deciding in favor of Felomina, the trial court ordered respondent spouses to execute a deed of
sale over the subject lot in favor of Felomina in order to effect the transfer of title to the latter. The
proper remedy, however, is provided under Section 10 (a), Rule 39 of the Revised Rules of Civil
Procedure which provides that "x x x [i]f real or personal property is situated within the Philippines, the
court in lieu of directing a conveyance thereof may by an order divest the title of any party and vest it in
others, which shall have the force and effect of a conveyance executed in due form of law."

WHEREFORE, in view of all the foregoing, the petition is GRANTED and the June 16, 2003 decision of the
Court of Appeals in CA-G.R. CV No. 69213 is REVERSED and SET ASIDE. The August 28, 2000 decision of
the Regional Trial Court of Butuan City, Branch 2, in Civil Case No. 4270, is REINSTATED with the
following MODIFICATIONS:

(1) Declaring petitioner Felomina Abellana as the absolute owner of Lot 3, Pcs-10-000198;

(2) Ordering the Register of Deeds of Butuan City to cancel TCT No. T-2874 in the name of respondent
Lucila Ponce and to issue a new one in the name of petitioner Felomina Abellana; and

(3) Deleting the awards of attorneys fees and litigation expenses for lack of basis.

No pronouncement as to costs.

[G.R. No. L-20357. November 25, 1967.]

IN THE MATTER OF THE PETITION FOR THE ALLOWANCE OF THE WILL OF GREGORIO GATCHALIAN,
deceased. PEDRO REYES GARCIA, Petitioner-Appellant, v. FELIPE GATCHALIAN, AURORA G. CAMINS,
ANGELES G. COSCA, FEDERICO G. TUBOG, VIRGINIA G. TALANAY and ANGELES G. TALANAY, Oppositors-
Appellees.

E. Debuque for Petitioner-Appellant.

E. L. Segovia for oppositors-appellees.

SYLLABUS

1. CIVIL LAW; PROBATE OF WILLS; ACKNOWLEDGMENT BY TESTATOR AND WITNESSES BEFORE A

NOTARY PUBLIC, REQUISITE OF; FAILURE TO OBSERVE; EFFECT ON ALLOWANCE OF WILL. A will to be
valid, must be acknowledged before a notary public not only by the testator but also by attesting
witnesses (In re: Testate Estate of Alberto, G.R. No. L-11948, April 29, 1959). As the document under
consideration does not comply with this requirement, the same may not be probated.

DECISION
DIZON, J.:

This is an appeal taken by Pedro Reyes Garcia from the decision of the Court of First Instance of Rizal in
Special Proceedings No. 2623 denying the allowance of the will of the late Gregorio Gatchalian, on the
ground that the attesting witnesses did not acknowledge it before a notary public as required by law.

On March 15, 1967, Gregorio Gatchalian, a widower of 71 years of age, died in the municipality of Pasig,
Province of Rizal, leaving no forced heirs. On April 2 of the same year, appellant filed a petition with the
above-named court for the probate of said alleged will (Exhibit "C") wherein he was instituted as sole
heir. Felipe Gatchalian, Aurora G. Camins, Angeles G. Cosca, Federico G. Tubog, Virginia G. Talanay and
Angeles C. Talanay, appellees herein, opposed the petition on the ground, among others, that the will
was procured by fraud; that the deceased did not intend the instrument signed by him to be as his will;
and that the deceased was physically and mentally incapable of making a will at the time of the alleged
execution of said will.

After due trial, the court rendered the appealed decision finding the document Exhibit "C" to be the
authentic last will of the deceased but disallowing it for failure to comply with the mandatory
requirement of Article 806 of the New Civil Code that the will must be acknowledged before a notary
public by the testator and the witnesses.

An examination of the document (Exhibit "C") shows that the same was acknowledged before a notary
public by the testator but not by the instrumental witnesses.

Article 806 of the New Civil Code reads as follows:jgc:chanrobles.com.ph

"Every will must be acknowledged before a notary public by the testator and the witnesses. The notary
public shall not be required to retain a copy of the will, or file another with the office of the Clerk of
Court."cralaw virtua1aw library

We have held heretofore that compliance with the requirement contained in the above legal provision
to the effect that a will must be acknowledged before a notary public by the testator and also by the
witnesses is indispensable for its validity (In re: Testate Estate of Alberto, G.R. No. L-11948, April 29,
1959). As the document under consideration does not comply with this requirement, it is obvious that
the same may not be probated.

WHEREFORE, the decision appealed from is affirmed, with costs.

FELIX AZUELA, G.R. No. 122880

Petitioner,
Present:

QUISUMBING, J.,
Chairperson,
- versus - CARPIO,
CARPIO MORALES, and
TINGA, JJ.
COURT OF APPEALS,
GERALDA AIDA CASTILLO Promulgated:
substituted by ERNESTO G.
CASTILLO, April 12, 2006
Respondents.
x----------------------------------------------------------------------------x

DECISION

TINGA, J.:

The core of this petition is a highly defective notarial will, purportedly executed by Eugenia E. Igsolo
(decedent), who died on 16 December 1982 at the age of 80. In refusing to give legal recognition to the
due execution of this document, the Court is provided the opportunity to assert a few important
doctrinal rules in the execution of notarial wills, all self-evident in view of Articles 805 and 806 of the
Civil Code.

A will whose attestation clause does not contain the number of pages on which the will is written is
fatally defective. A will whose attestation clause is not signed by the instrumental witnesses is fatally
defective. And perhaps most importantly, a will which does not contain an acknowledgment, but a mere
jurat, is fatally defective. Any one of these defects is sufficient to deny probate. A notarial will with all
three defects is just aching for judicial rejection.

There is a distinct and consequential reason the Civil Code provides a comprehensive catalog of
imperatives for the proper execution of a notarial will. Full and faithful compliance with all the detailed
requisites under Article 805 of the Code leave little room for doubt as to the validity in the due
execution of the notarial will. Article 806 likewise imposes another safeguard to the validity of notarial
wills that they be acknowledged before a notary public by the testator and the witnesses. A notarial will
executed with indifference to these two codal provisions opens itself to nagging questions as to its
legitimacy.

The case stems from a petition for probate filed on 10 April 1984 with the Regional Trial Court (RTC) of
Manila. The petition filed by petitioner Felix Azuela sought to admit to probate the notarial will of
Eugenia E. Igsolo, which was notarized on 10 June 1981. Petitioner is the son of the cousin of the
decedent.

The will, consisting of two (2) pages and written in the vernacular Pilipino, read in full:
HULING HABILIN NI EUGENIA E. IGSOLO

SA NGALAN NG MAYKAPAL, AMEN:

AKO, si EUGENIA E. IGSOLO, nakatira sa 500 San Diego St., Sampaloc, Manila, pitongput siyam (79) na
gulang, nasa hustong pagi-isip, pag-unawa at memoria ay nag-hahayag na ito na ang aking huling habilin
at testamento, at binabali wala ko lahat ang naunang ginawang habilin o testamento:
Una-Hinihiling ko na ako ay mailibing sa Sementerio del Norte, La Loma sang-ayong sa kaugalian at
patakaran ng simbahang katoliko at ang taga-pag-ingat (Executor) ng habiling ito ay magtatayo ng
bantayog upang silbing ala-ala sa akin ng aking pamilya at kaibigan;

Pangalawa-Aking ipinagkakaloob at isinasalin ang lahat ng karapatan sa aking pamangkin na si Felix

Azuela, na siyang nag-alaga sa akin sa mahabang panahon, yaong mga bahay na nakatirik sa lote numero
28, Block 24 at nakapangalan sa Pechaten Korporasyon, ganoon din ibinibigay ko ang lahat ng karapatan
sa bahay na nakatirik sa inoopahan kong lote, numero 43, Block 24 na pag-aari ng Pechaten Corporation.
Ipinagkakaloob kong buong buo ang lahat ng karapatan sa bahay at lupa na nasa 500 San Diego St., Lot
42, Block 24, Sampaloc, Manila kay Felix Azuela at ang pagkakaloob kong ito ay walang pasubalit at
kondiciones;

Pangatlo- Na ninunumbrahan ko si VART PAGUE na siyang nagpapatupad ng huling habiling ito at

kagustuhan ko rin na hindi na kailanman siyang mag-lagak ng piyansiya.

Aking nilagdaan ang Huling Habilin na ito dito sa Maynila ika 10 ng Hunyo, 1981.

(Sgd.)
EUGENIA E. IGSOLO
(Tagapagmana)

PATUNAY NG MGA SAKSI

Ang kasulatang ito, na binubuo ng ____ dahon pati ang huling dahong ito, na ipinahayag sa amin ni
Eugenia E. Igsolo, tagapagmana na siya niyang Huling Habilin, ngayon ika-10 ng Hunyo 1981, ay
nilagdaan ng nasabing tagapagmana sa ilalim ng kasulatang nabanggit at sa kaliwang panig ng lahat at
bawat dahon, sa harap ng lahat at bawat sa amin, at kami namang mga saksi ay lumagda sa harap ng
nasabing tagapagmana at sa harap ng lahat at bawat isa sa amin, sa ilalim ng nasabing kasulatan at sa
kaliwang panig ng lahat at bawat dahon ng kasulatan ito.

EUGENIA E. IGSOLO
address: 500 San Diego St.
Sampaloc, Manila Res. Cert. No. A-7717-37
Issued at Manila on March 10, 1981.

QUIRINO AGRAVA
address: 1228-Int. 3, Kahilum
Pandacan, Manila Res. Cert. No. A-458365
Issued at Manila on Jan. 21, 1981
LAMBERTO C. LEAO
address: Avenue 2, Blcok 7,
Lot 61, San Gabriel, G.MA., Cavite Res.
Cert. No. A-768277 issued at Carmona, Cavite
on Feb. 7, 1981

JUANITO ESTRERA
address: City Court Compound,
City of Manila Res. Cert. No. A574829
Issued at Manila on March 2, 1981.

Nilagdaan ko at ninotario ko ngayong 10 ng Hunyo 10, 1981 dito sa Lungsod ng Maynila.

(Sgd.)
PETRONIO Y. BAUTISTA
Doc. No. 1232 ; NOTARIO PUBLIKO
Page No. 86 ; Until Dec. 31, 1981
Book No. 43 ; PTR-152041-1/2/81-Manila
Series of 1981 TAN # 1437-977-8[1]

The three named witnesses to the will affixed their signatures on the left-hand margin of both pages of
the will, but not at the bottom of the attestation clause.

The probate petition adverted to only two (2) heirs, legatees and devisees of the decedent, namely:
petitioner himself, and one Irene Lynn Igsolo, who was alleged to have resided abroad. Petitioner
prayed that the will be allowed, and that letters testamentary be issued to the designated executor, Vart
Prague.

The petition was opposed by Geralda Aida Castillo (Geralda Castillo), who represented herself as the
attorney-in-fact of the 12 legitimate heirs of the decedent.[2] Geralda Castillo claimed that the will is a
forgery, and that the true purpose of its emergence was so it could be utilized as a defense in several
court cases filed by oppositor against petitioner, particularly for forcible entry and usurpation of real
property, all centering on petitioners right to occupy the properties of the decedent.[3] It also asserted
that contrary to the representations of petitioner, the decedent was actually survived by 12 legitimate
heirs, namely her grandchildren, who were then residing abroad. Per records, it was subsequently
alleged that decedent was the widow of Bonifacio Igsolo, who died in 1965,[4] and the mother of a
legitimate child, Asuncion E. Igsolo, who predeceased her mother by three (3) months.[5]

Oppositor Geralda Castillo also argued that the will was not executed and attested to in accordance with
law. She pointed out that decedents signature did not appear on the second page of the will, and the
will was not properly acknowledged. These twin arguments are among the central matters to this
petition.
After due trial, the RTC admitted the will to probate, in an Order dated 10 August 1992.[6] The RTC
favorably took into account the testimony of the three (3) witnesses to the will, Quirino Agrava,
Lamberto Leano, and Juanito Estrada. The RTC also called to fore the modern tendency in respect to the
formalities in the execution of a will x x x with the end in view of giving the testator more freedom in
expressing his last wishes;[7] and from this perspective, rebutted oppositors arguments that the will was
not properly executed and attested to in accordance with law.
After a careful examination of the will and consideration of the testimonies of the subscribing and
attesting witnesses, and having in mind the modern tendency in respect to the formalities in the
execution of a will, i.e., the liberalization of the interpretation of the law on the formal requirements of
a will with the end in view of giving the testator more freedom in expressing his last wishes, this Court is
persuaded to rule that the will in question is authentic and had been executed by the testatrix in
accordance with law.

On the issue of lack of acknowledgement, this Court has noted that at the end of the will after the
signature of the testatrix, the following statement is made under the sub-title, Patunay Ng Mga Saksi:

Ang kasulatang ito, na binubuo ng _____ dahon pati ang huling dahong ito, na ipinahayag sa amin ni
Eugenia N. Igsolo, tagapagmana na siya niyang Huling Habilin, ngayong ika-10 ng Hunyo 1981, ay
nilagdaan ng nasabing tagapagmana sa ilalim ng kasulatang nabanggit at sa kaliwang panig ng lahat at
bawat dahon, sa harap ng lahat at bawat sa amin, at kami namang mga saksi ay lumagda sa harap ng
nasabing tagapagmana at sa harap ng lahat at bawat isa sa amin, sa ilalim ng nasabing kasulatan at sa
kaliwang panig ng lahat at bawat dahon ng kasulatan ito.

The aforequoted declaration comprises the attestation clause and the acknowledgement and is
considered by this Court as a substantial compliance with the requirements of the law.

On the oppositors contention that the attestation clause was not signed by the subscribing witnesses at
the bottom thereof, this Court is of the view that the signing by the subscribing witnesses on the left
margin of the second page of the will containing the attestation clause and acknowledgment, instead of
at the bottom thereof, substantially satisfies the purpose of identification and attestation of the will.

With regard to the oppositors argument that the will was not numbered correlatively in letters placed
on upper part of each page and that the attestation did not state the number of pages thereof, it is
worthy to note that the will is composed of only two pages. The first page contains the entire text of the
testamentary dispositions, and the second page contains the last portion of the attestation clause and
acknowledgement. Such being so, the defects are not of a serious nature as to invalidate the will. For
the same reason, the failure of the testatrix to affix her signature on the left margin of the second page,
which contains only the last portion of the attestation clause and acknowledgment is not a fatal defect.

As regards the oppositors assertion that the signature of the testatrix on the will is a forgery, the
testimonies of the three subscribing witnesses to the will are convincing enough to establish the
genuineness of the signature of the testatrix and the due execution of the will.[8]

The Order was appealed to the Court of Appeals by Ernesto Castillo, who had substituted his since
deceased mother-in-law, Geralda Castillo. In a Decision dated 17 August 1995, the Court of Appeals
reversed the trial court and ordered the dismissal of the petition for probate.[9] The Court of Appeals
noted that the attestation clause failed to state the number of pages used in the will, thus rendering the
will void and undeserving of probate.[10]

Hence, the present petition.

Petitioner argues that the requirement under Article 805 of the Civil Code that the number of pages
used in a notarial will be stated in the attestation clause is merely directory, rather than mandatory, and
thus susceptible to what he termed as the substantial compliance rule.[11]

The solution to this case calls for the application of Articles 805 and 806 of the Civil Code, which we
replicate in full.

Art. 805. Every will, other than a holographic will, must be subscribed at the end thereof by the testator
himself or by the testator's name written by some other person in his presence, and by his express
direction, and attested and subscribed by three or more credible witnesses in the presence of the
testator and of one another.

The testator or the person requested by him to write his name and the instrumental witnesses of the
will, shall also sign, as aforesaid, each and every page thereof, except the last, on the left margin, and all
the pages shall be numbered correlatively in letters placed on the upper part of each page.

The attestation shall state the number of pages used upon which the will is written, and the fact that the
testator signed the will and every page thereof, or caused some other person to write his name, under
his express direction, in the presence of the instrumental witnesses, and that the latter witnessed and
signed the will and all the pages thereof in the presence of the testator and of one another.

If the attestation clause is in a language not known to the witnesses, it shall be interpreted to them.

Art. 806. Every will must be acknowledged before a notary public by the testator and the witnesses. The
notary public shall not be required to retain a copy of the will, or file another with the office of the Clerk
of Court.

The appellate court, in its Decision, considered only one defect, the failure of the attestation clause to
state the number of pages of the will. But an examination of the will itself reveals several more
deficiencies.

As admitted by petitioner himself, the attestation clause fails to state the number of pages of the
will.[12] There was an incomplete attempt to comply with this requisite, a space having been allotted for
the insertion of the number of pages in the attestation clause. Yet the blank was never filled in; hence,
the requisite was left uncomplied with.
The Court of Appeals pounced on this defect in reversing the trial court, citing in the process Uy Coque v.
Navas L. Sioca[13] and In re: Will of Andrada.[14] In Uy Coque, the Court noted that among the defects
of the will in question was the failure of the attestation clause to state the number of pages contained in
the will.[15] In ruling that the will could not be admitted to probate, the Court made the following
consideration which remains highly relevant to this day: The purpose of requiring the number of sheets
to be stated in the attestation clause is obvious; the document might easily be so prepared that the
removal of a sheet would completely change the testamentary dispositions of the will and in the
absence of a statement of the total number of sheets such removal might be effected by taking out the
sheet and changing the numbers at the top of the following sheets or pages. If, on the other hand, the
total number of sheets is stated in the attestation clause the falsification of the document will involve
the inserting of new pages and the forging of the signatures of the testator and witnesses in the margin,
a matter attended with much greater difficulty.[16]

The case of In re Will of Andrada concerned a will the attestation clause of which failed to state the
number of sheets or pages used. This consideration alone was sufficient for the Court to declare
unanim[ity] upon the point that the defect pointed out in the attesting clause is fatal.[17] It was further
observed that it cannot be denied that the x x x requirement affords additional security against the
danger that the will may be tampered with; and as the Legislature has seen fit to prescribe this
requirement, it must be considered material.[18]

Against these cited cases, petitioner cites Singson v. Florentino[19] and Taboada v. Hon. Rosal,[20]
wherein the Court allowed probate to the wills concerned therein despite the fact that the attestation
clause did not state the number of pages of the will. Yet the appellate court itself considered the import
of these two cases, and made the following distinction which petitioner is unable to rebut, and which we
adopt with approval:

Even a cursory examination of the Will (Exhibit D), will readily show that the attestation does not state
the number of pages used upon which the will is written. Hence, the Will is void and undeserving of
probate.

We are not impervious of the Decisions of the Supreme Court in Manuel Singson versus Emilia
Florentino, et al., 92 Phil. 161 and Apolonio [Taboada] versus Hon. Avelino Rosal, et al., 118 SCRA 195, to
the effect that a will may still be valid even if the attestation does not contain the number of pages used
upon which the Will is written. However, the Decisions of the Supreme Court are not applicable in the
aforementioned appeal at bench. This is so because, in the case of Manuel Singson versus Emilia
Florentino, et al., supra, although the attestation in the subject Will did not state the number of pages
used in the will, however, the same was found in the last part of the body of the Will:

xxx

The law referred to is article 618 of the Code of Civil Procedure, as amended by Act No. 2645, which
requires that the attestation clause shall state the number of pages or sheets upon which the will is
written, which requirement has been held to be mandatory as an effective safeguard against the
possibility of interpolation or omission of some of the pages of the will to the prejudice of the heirs to
whom the property is intended to be bequeathed (In re Will of Andrada, 42 Phil. 180; Uy Coque vs.
Navas L. Sioca, 43 Phil., 405; Gumban vs. Gorcho, 50 Phil. 30; Quinto vs. Morata, 54 Phil. 481; Echevarria
vs. Sarmiento, 66 Phil. 611). The ratio decidendi of these cases seems to be that the attestation clause
must contain a statement of the number of sheets or pages composing the will and that if this is missing
or is omitted, it will have the effect of invalidating the will if the deficiency cannot be supplied, not by
evidence aliunde, but by a consideration or examination of the will itself. But here the situation is
different. While the attestation clause does not state the number of sheets or pages upon which the will
is written, however, the last part of the body of the will contains a statement that it is composed of
eight pages, which circumstance in our opinion takes this case out of the rigid rule of construction and
places it within the realm of similar cases where a broad and more liberal view has been adopted to
prevent the will of the testator from being defeated by purely technical considerations. (page 165-165,
supra) (Underscoring supplied)

In Apolonio Tabaoda versus Hon. Avelino Rosal, et al. supra, the notarial acknowledgement in the Will
states the number of pages used in the:

xxx

We have examined the will in question and noticed that the attestation clause failed to state the
number of pages used in writing the will. This would have been a fatal defect were it not for the fact
that, in this case, it is discernible from the entire will that it is really and actually composed of only two
pages duly signed by the testatrix and her instrumental witnesses. As earlier stated, the first page which
contains the entirety of the testamentary dispositions is signed by the testatrix at the end or at the
bottom while the instrumental witnesses signed at the left margin. The other page which is marked as
Pagina dos comprises the attestation clause and the acknowledgment. The acknowledgment itself states
that this Last Will and Testament consists of two pages including this page (pages 200-201, supra)
(Underscoring supplied).

However, in the appeal at bench, the number of pages used in the will is not stated in any part of the
Will. The will does not even contain any notarial acknowledgment wherein the number of pages of the
will should be stated.[21]

Both Uy Coque and Andrada were decided prior to the enactment of the Civil Code in 1950, at a time
when the statutory provision governing the formal requirement of wills was Section

618 of the Code of Civil Procedure.[22] Reliance on these cases remains apropos, considering that the
requirement that the attestation state the number of pages of the will is extant from Section 618.[23]
However, the enactment of the Civil Code in 1950 did put in force a rule of interpretation of the
requirements of wills, at least insofar as the attestation clause is concerned, that may vary from the
philosophy that governed these two cases. Article 809 of the Civil Code states: In the absence of bad
faith, forgery, or fraud, or undue and improper pressure and influence, defects and imperfections in the
form of attestation or in the language used therein shall not render the will invalid if it is proved that the
will was in fact executed and attested in substantial compliance with all the requirements of article 805.

In the same vein, petitioner cites the report of the Civil Code Commission, which stated that the
underlying and fundamental objective permeating the provisions on the [law] on [wills] in this project
consists in the [liberalization] of the manner of their execution with the end in view of giving the
testator more [freedom] in [expressing] his last wishes. This objective is in accord with the [modern
tendency] in respect to the formalities in the execution of wills.[24] However, petitioner conveniently
omits the qualification offered by the Code Commission in the very same paragraph he cites from their
report, that such liberalization be but with sufficient safeguards and restrictions to prevent the
commission of fraud and the exercise of undue and improper pressure and influence upon the
testator.[25]

Caneda v. Court of Appeals[26] features an extensive discussion made by Justice Regalado, speaking for
the Court on the conflicting views on the manner of interpretation of the legal formalities required in
the execution of the attestation clause in wills.[27] Uy Coque and Andrada are cited therein, along with
several other cases, as examples of the application of the rule of strict construction.[28] However, the
Code Commission opted to recommend a more liberal construction through the substantial compliance
rule under Article 809. A cautionary note was struck though by Justice J.B.L. Reyes as to how Article 809
should be applied:

x x x The rule must be limited to disregarding those defects that can be supplied by an examination of
the will itself: whether all the pages are consecutively numbered; whether the signatures appear in each
and every page; whether the subscribing witnesses are three or the will was notarized. All these are
facts that the will itself can reveal, and defects or even omissions concerning them in the attestation
clause can be safely disregarded. But the total number of pages, and whether all persons required to
sign did so in the presence of each other must substantially appear in the attestation clause, being the
only check against perjury in the probate proceedings.[29] (Emphasis supplied.)

The Court of Appeals did cite these comments by Justice J.B.L. Reyes in its assailed decision, considering
that the failure to state the number of pages of the will in the attestation clause is one of the defects
which cannot be simply disregarded. In Caneda itself, the Court refused to allow the probate of a will
whose attestation clause failed to state that the witnesses subscribed their respective signatures to the
will in the presence of the testator and of each other,[30] the other omission cited by Justice J.B.L. Reyes
which to his estimation cannot be lightly disregarded.

Caneda suggested: [I]t may thus be stated that the rule, as it now stands, is that omission which can be
supplied by an examination of the will itself, without the need of resorting to extrinsic evidence, will not
be fatal and, correspondingly, would not obstruct the allowance to probate of the will being assailed.
However, those omissions which cannot be supplied except by evidence aliunde would result in the
invalidation of the attestation clause and ultimately, of the will itself.[31] Thus, a failure by the
attestation clause to state that the testator signed every page can be liberally construed, since that fact
can be checked by a visual examination; while a failure by the attestation clause to state that the
witnesses signed in one anothers presence should be considered a fatal flaw since the attestation is the
only textual guarantee of compliance.[32]

The failure of the attestation clause to state the number of pages on which the will was written remains
a fatal flaw, despite Article 809. The purpose of the law in requiring the clause to state the number of
pages on which the will is written is to safeguard against possible interpolation or omission of one or
some of its pages and to prevent any increase or decrease in the pages.[33] The failure to state the
number of pages equates with the absence of an averment on the part of the instrumental witnesses as
to how many pages consisted the will, the execution of which they had ostensibly just witnessed and
subscribed to. Following Caneda, there is substantial compliance with this requirement if the will states
elsewhere in it how many pages it is comprised of, as was the situation in Singson and Taboada.
However, in this case, there could have been no substantial compliance with the requirements under
Article 805 since there is no statement in the attestation clause or anywhere in the will itself as to the
number of pages which comprise the will.

At the same time, Article 809 should not deviate from the need to comply with the formal requirements
as enumerated under Article 805. Whatever the inclinations of the members of the Code Commission in
incorporating Article 805, the fact remains that they saw fit to prescribe substantially the same formal
requisites as enumerated in Section 618 of the Code of Civil Procedure, convinced that these remained
effective safeguards against the forgery or intercalation of notarial wills.[34] Compliance with these
requirements, however picayune in impression, affords the public a high degree of comfort that the
testator himself or herself had decided to convey property post mortem in the manner established in
the will.[35] The transcendent legislative intent, even as expressed in the cited comments of the Code
Commission, is for the fruition of the testators incontestable desires, and not for the indulgent
admission of wills to probate.

The Court could thus end here and affirm the Court of Appeals. However, an examination of the will
itself reveals a couple of even more critical defects that should necessarily lead to its rejection.

For one, the attestation clause was not signed by the instrumental witnesses. While the signatures of
the instrumental witnesses appear on the left-hand margin of the will, they do not appear at the bottom
of the attestation clause which after all consists of their averments before the notary public.

Cagro v. Cagro[36] is material on this point. As in this case, the signatures of the three witnesses to the
will do not appear at the bottom of the attestation clause, although the page containing the same is
signed by the witnesses on the left-hand margin.[37] While three (3) Justices[38] considered the
signature requirement had been substantially complied with, a majority of six (6), speaking through
Chief Justice Paras, ruled that the attestation clause had not been duly signed, rendering the will fatally
defective.

There is no question that the signatures of the three witnesses to the will do not appear at the bottom
of the attestation clause, although the page containing the same is signed by the witnesses on the left-
hand margin.

We are of the opinion that the position taken by the appellant is correct. The attestation clause is "a
memorandum of the facts attending the execution of the will" required by law to be made by the
attesting witnesses, and it must necessarily bear their signatures. An unsigned attestation clause cannot
be considered as an act of the witnesses, since the omission of their signatures at the bottom thereof
negatives their participation.

The petitioner and appellee contends that signatures of the three witnesses on the left-hand margin
conform substantially to the law and may be deemed as their signatures to the attestation clause. This is
untenable, because said signatures are in compliance with the legal mandate that the will be signed on
the left-hand margin of all its pages. If an attestation clause not signed by the three witnesses at the
bottom thereof, be admitted as sufficient, it would be easy to add such clause to a will on a subsequent
occasion and in the absence of the testator and any or all of the witnesses.[39]

The Court today reiterates the continued efficacy of Cagro. Article 805 particularly segregates the
requirement that the instrumental witnesses sign each page of the will, from the requisite that the will
be attested and subscribed by [the instrumental witnesses]. The respective intents behind these two
classes of signature are distinct from each other. The signatures on the left-hand corner of every page
signify, among others, that the witnesses are aware that the page they are signing forms part of the will.
On the other hand, the signatures to the attestation clause establish that the witnesses are referring to
the statements contained in the attestation clause itself. Indeed, the attestation clause is separate and
apart from the disposition of the will. An unsigned attestation clause results in an unattested will. Even if
the instrumental witnesses signed the left-hand margin of the page containing the unsigned attestation
clause, such signatures cannot demonstrate these witnesses undertakings in the clause, since the
signatures that do appear on the page were directed towards a wholly different avowal.

The Court may be more charitably disposed had the witnesses in this case signed the attestation clause
itself, but not the left-hand margin of the page containing such clause. Without diminishing the value of
the instrumental witnesses signatures on each and every page, the fact must be noted that it is the
attestation clause which contains the utterances reduced into writing of the testamentary witnesses
themselves. It is the witnesses, and not the testator, who are required under Article 805 to state the
number of pages used upon which the will is written; the fact that the testator had signed the will and
every page thereof; and that they witnessed and signed the will and all the pages thereof in the
presence of the testator and of one another. The only proof in the will that the witnesses have stated
these elemental facts would be their signatures on the attestation clause.

Thus, the subject will cannot be considered to have been validly attested to by the instrumental
witnesses, as they failed to sign the attestation clause.

Yet, there is another fatal defect to the will on which the denial of this petition should also hinge. The
requirement under Article 806 that every will must be acknowledged before a notary public by the
testator and the witnesses has also not been complied with. The importance of this requirement is
highlighted by the fact that it had been segregated from the other requirements under Article 805 and
entrusted into a separate provision, Article 806. The non-observance of Article 806 in this case is equally
as critical as the other cited flaws in compliance with Article 805, and should be treated as of equivalent
import.

In lieu of an acknowledgment, the notary public, Petronio Y. Bautista, wrote Nilagdaan ko at ninotario ko
ngayong 10 ng Hunyo 10 (sic), 1981 dito sa Lungsod ng Maynila.[40] By no manner of contemplation can
those words be construed as an acknowledgment. An acknowledgment is the act of one who has
executed a deed in going before some competent officer or court and declaring it to be his act or
deed.[41] It involves an extra step undertaken whereby the signor actually declares to the notary that
the executor of a document has attested to the notary that the same is his/her own free act and deed.

It might be possible to construe the averment as a jurat, even though it does not hew to the usual
language thereof. A jurat is that part of an affidavit where the notary certifies that before him/her, the
document was subscribed and sworn to by the executor.[42] Ordinarily, the language of the jurat should
avow that the document was subscribed and sworn before the notary public, while in this case, the
notary public averred that he himself signed and notarized the document. Possibly though, the word
ninotario or notarized encompasses the signing of and swearing in of the executors of the document,
which in this case would involve the decedent and the instrumental witnesses.

Yet even if we consider what was affixed by the notary public as a jurat, the will would nonetheless
remain invalid, as the express requirement of Article 806 is that the will be acknowledged, and not
merely subscribed and sworn to. The will does not present any textual proof, much less one under oath,
that the decedent and the instrumental witnesses executed or signed the will as their own free act or
deed. The acknowledgment made in a will provides for another all-important legal safeguard against
spurious wills or those made beyond the free consent of the testator. An acknowledgement is not an
empty meaningless act.[43] The acknowledgment coerces the testator and the instrumental witnesses
to declare before an officer of the law that they had executed and subscribed to the will as their own
free act or deed. Such declaration is under oath and under pain of perjury, thus allowing for the criminal
prosecution of persons who participate in the execution of spurious wills, or those executed without the
free consent of the testator. It also provides a further degree of assurance that the testator is of certain
mindset in making the testamentary dispositions to those persons he/she had designated in the will.

It may not have been said before, but we can assert the rule, self-evident as it is under Article 806. A
notarial will that is not acknowledged before a notary public by the testator and the witnesses is fatally
defective, even if it is subscribed and sworn to before a notary public.

There are two other requirements under Article 805 which were not fully satisfied by the will in
question. We need not discuss them at length, as they are no longer material to the

disposition of this case. The provision requires that the testator and the instrumental witnesses sign
each and every page of the will on the left margin, except the last; and that all the pages shall be
numbered correlatively in letters placed on the upper part of each page. In this case, the decedent,
unlike the witnesses, failed to sign both pages of the will on the left margin, her only signature
appearing at the so-called logical end[44] of the will on its first page. Also, the will itself is not numbered
correlatively in letters on each page, but instead numbered with Arabic numerals. There is a line of
thought that has disabused the notion that these two requirements be construed as mandatory.[45]
Taken in isolation, these omissions, by themselves, may not be sufficient to deny probate to a will. Yet
even as these omissions are not decisive to the adjudication of this case, they need not be dwelt on,
though indicative as they may be of a general lack of due regard for the requirements under Article 805
by whoever executed the will.

All told, the string of mortal defects which the will in question suffers from makes the probate denial
inexorable.

WHEREFORE, the petition is DENIED. Costs against petitioner.

RECENT JURISPRUDENCE CIVIL LAW

FELIX AZUELA
v.
COURT OF APPEALS and GERALDA AIDA CASTILLO, substitutedby ERNESTO G. CASTILLOG.R. 122880, 12
April 2006, Tinga, J. (Third Division)
A will whose attestation clause does not contain the number of pages on which the will is written is
fatally defective. A will whose attestation clause is not signed by the instrumental witnesses is fatally
defective. And perhaps most importantly, a will which does not contain an acknowledgment, but a mere
jurat, is fatally defective. Any one of these defects is sufficient to deny probate. A notarial will with all
three defects is just aching for judicial rejection.
Felix Azuela filed a petition with the trial court for the probate of a notarial will purportedly executed by
Eugenia E. Igsolo on June 10, 1981 and notarized on the same day. The will consisted of two (2) pages
and was written in Filipino. The attestation clause did not state the number of pagesand it was not
signed by the attesting witnesses at the bottom thereof. The said witnesses affixedtheir signatures on
the left-hand margin of both pages of the will though. Geralda Castillo opposedthe petition, claiming
that the will was a forgery. She also argued that the will was not executed andattested to in accordance
with law. She pointed out that the decedents signature did not appear onthe second page of the will,
and the will was not properly acknowledged. The trial court held the will to be authentic and to have
been executed in accordance withlaw and, thus, admitted it to probate, calling to fore the modern
tendency in respect to theformalities in the execution of a willwith the end in view of giving the
testator more freedom inexpressing his last wishes. According to the trial court, the declaration at the
end of the will underthe sub-title, Patunay Ng Mga Saksi, comprised the attestation clause and the
acknowledgement,and was a substantial compliance with the requirements of the law. It also held that
the signing by thesubscribing witnesses on the left margin of the second page of the will containing the
attestationclause and acknowledgment, instead of at the bottom thereof, substantially satisfied the
purpose of identification and attestation of the will. The Court of Appeals, however, reversed the trial
courtsdecision and ordered the dismissal of the petition for probate. It noted that the attestation
clausefailed to state the number of pages used in the will, thus rendering the will void and undeserving
of probate. Azuela argues that the requirement under Article 805 of the Civil Code that the number of
pages used in a notarial will be stated in the attestation clause is merely directory, rather
thanmandatory, and thus susceptible to what he termed as the substantial compliance rule.
ISSUE:
Whether or not the subject will complied with the requirements of the law and, hence,should be
admitted to probate
HELD:
The petition is DENIED. A will whose attestation clause does not contain the number of pages on which
the will is written is fatally defective. A will whose attestation clause is not signed by the instrumental
witnessesis fatally defective. And perhaps most importantly, a will which does not contain an
acknowledgment,but a mere
jurat
, is fatally defective. Any one of these defects is sufficient to deny probate. A notarial will with all three
defects is just aching for judicial rejection.

RECENT JURISPRUDENCE CIVIL LAW

Prior to the New Civil Code, the statutory provision governing the formal requirements of wills was
Section 618 of the Code of Civil Procedure. Extant therefrom is the requirement that theattestation
state the number of pages of the will. The enactment of the New Civil Code put in force arule of
interpretation of the requirements of wills, at least insofar as the attestation clause isconcerned, that
may vary from the philosophy that governed the said Section 618. Article 809 of theCivil Code, the Code
Commission opted to recommend a more liberal construction through thesubstantial compliance rule.
However, Justice J.B.L. Reyes cautioned that the rule
must be limited todisregarding those defects that can be supplied by an examination of the will itself:
whether all the pages are consecutively numbered; whether the signatures appear in each and every
page; whether the subscribing witnesses are three or the will was notarized...But the total number of
pages, and whether all persons required to sign did so in the presence of each other must substantially
appear in the attestation clause, being the only check against perjury in the probate proceedings.
The Court suggested in
Caneda v. Court of Appeals (G.R. No. 103554, May 28, 1993,222 SCRA 781)
:

the rule, as it now stands, is that omission which can be supplied by anexamination of the will itself,
without the need of resorting to extrinsic evidence, will not be fataland, correspondingly, would not
obstruct the allowance to probate of the will being assailed.However, those omissions which cannot be
supplied except by evidence
aliunde
would result in theinvalidation of the attestation clause and ultimately, of the will itself. The failure of
the attestation clause to state the number of pages on which the will was written remains a fatal flaw,
despite Art. 809. This requirement aims at safeguarding the will againstpossible interpolation or
omission of one or some of its pages and thus preventing any increase ordecrease in the pages.
Following
Caneda
, there is substantial compliance with this requirement if the will states elsewhere in it how many pages
it is comprised of, as was the situation in
Singson
and
Taboada
. In this case, however, there could have been no substantial compliance with therequirements under
Art. 805 of the Civil Code since there is no statement in the attestation clause oranywhere in the will
itself as to the number of pages which comprise the will. There was anincomplete attempt to comply
with this requisite, a space having been allotted for the insertion of thenumber of pages in the
attestation clause. Yet the blank was never filled in. The subject will cannot be considered to have been
validly attested to by the instrumental witnesses. While the signatures of the instrumental witnesses
appear on the left-hand margin of the will, they do not appear at the bottom of the attestation clause.
Art. 805 particularly segregates therequirement that the instrumental witnesses sign each page of the
will, from the requisite that the willbe attested and subscribed by them. The signatures on the left-hand
corner of every page signify,among others, that the witnesses are aware that the page they are signing
forms part of the will. Onthe other hand, the signatures to the attestation clause establish that the
witnesses are referring to thestatements contained in the attestation clause itself. An unsigned
attestation clause results in anunattested will. Even if the instrumental witnesses signed the left-hand
margin of the page containing the unsigned attestation clause, such signatures cannot demonstrate
these witnesses undertakings inthe clause, since the signatures that do appear on the page were
directed towards a wholly differentavowal. The notary public who notarized the subject will wrote,
Nilagdaan ko at ninotario ko ngayong 10 ng Hunyo 10 (sic), 1981 dito sa Lungsod ng Maynila
.

By no manner of contemplation can these wordsbe construed as an acknowledgment. An

acknowledgment is the act of one who has executed a deedin going before some competent officer or
court and declaring it to be his act or deed. It might bepossible to construe the averment as a
jurat
, even though it does not follow to the usual languagethereof. A
jurat
is that part of an affidavit where the notary certifies that before him/her, thedocument was subscribed
and sworn to by the executor.It may not have been said before, but a notarial will that is not
acknowledged before a notary public by the testator and the witnesses is fatally defective, even if it is
subscribed and sworn to
RECENT JURISPRUDENCE CIVIL LAW
before a notary public. The importance of the requirement of acknowledgment is highlighted by thefact
that it had been segregated from the other requirements under Art. 805 and entrusted into aseparate
provision, Art. 806. The express requirement of Art. 806 is that the will be acknowledged,and not
merely subscribed and sworn to. The acknowledgment coerces the testator and theinstrumental
witnesses to declare before an officer of the law that they had executed and subscribedto the will as
their own free act or deed. Such declaration is under oath and under pain of perjury,thus allowing for
the criminal prosecution of persons who participate in the execution of spurious wills, or those executed
without the free consent of the testator. It also provides a further degree of assurance that the testator
is of certain mindset in making the testamentary dispositions to thosepersons he/she had designated in
the will.

G.R. No. 92989 July 8, 1991

PERFECTO DY, JR. petitioner,

vs.
COURT OF APPEALS, GELAC TRADING INC., and ANTONIO V. GONZALES, respondents.

Zosa & Quijano Law Offices for petitioner.

Expedito P. Bugarin for respondent GELAC Trading, Inc.

GUTIERREZ, JR., J.:

This is a petition for review on certiorari seeking the reversal of the March 23, 1990 decision of the
Court of Appeals which ruled that the petitioner's purchase of a farm tractor was not validly
consummated and ordered a complaint for its recovery dismissed.

The facts as established by the records are as follows:

The petitioner, Perfecto Dy and Wilfredo Dy are brothers. Sometime in 1979, Wilfredo Dy purchased a
truck and a farm tractor through financing extended by Libra Finance and Investment Corporation
(Libra). Both truck and tractor were mortgaged to Libra as security for the loan.

The petitioner wanted to buy the tractor from his brother so on August 20, 1979, he wrote a letter to
Libra requesting that he be allowed to purchase from Wilfredo Dy the said tractor and assume the
mortgage debt of the latter.

In a letter dated August 27, 1979, Libra thru its manager, Cipriano Ares approved the petitioner's
request.

Thus, on September 4, 1979, Wilfredo Dy executed a deed of absolute sale in favor of the petitioner
over the tractor in question.

At this time, the subject tractor was in the possession of Libra Finance due to Wilfredo Dy's failure to pay
the amortizations.
Despite the offer of full payment by the petitioner to Libra for the tractor, the immediate release could
not be effected because Wilfredo Dy had obtained financing not only for said tractor but also for a truck
and Libra insisted on full payment for both.

The petitioner was able to convince his sister, Carol Dy-Seno, to purchase the truck so that full payment
could be made for both. On November 22, 1979, a PNB check was issued in the amount of P22,000.00 in
favor of Libra, thus settling in full the indebtedness of Wilfredo Dy with the financing firm. Payment
having been effected through an out-of-town check, Libra insisted that it be cleared first before Libra
could release the chattels in question.

Meanwhile, Civil Case No. R-16646 entitled "Gelac Trading, Inc. v. Wilfredo Dy", a collection case to
recover the sum of P12,269.80 was pending in another court in Cebu.

On the strength of an alias writ of execution issued on December 27, 1979, the provincial sheriff was
able to seize and levy on the tractor which was in the premises of Libra in Carmen, Cebu. The tractor was
subsequently sold at public auction where Gelac Trading was the lone bidder. Later, Gelac sold the
tractor to one of its stockholders, Antonio Gonzales.

It was only when the check was cleared on January 17, 1980 that the petitioner learned about GELAC
having already taken custody of the subject tractor. Consequently, the petitioner filed an action to
recover the subject tractor against GELAC Trading with the Regional Trial Court of Cebu City.

On April 8, 1988, the RTC rendered judgment in favor of the petitioner. The dispositive portion of the
decision reads as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant,
pronouncing that the plaintiff is the owner of the tractor, subject matter of this case, and directing the
defendants Gelac Trading Corporation and Antonio Gonzales to return the same to the plaintiff herein;
directing the defendants jointly and severally to pay to the plaintiff the amount of P1,541.00 as
expenses for hiring a tractor; P50,000 for moral damages; P50,000 for exemplary damages; and to pay
the cost. (Rollo, pp. 35-36)

On appeal, the Court of Appeals reversed the decision of the RTC and dismissed the complaint with costs
against the petitioner. The Court of Appeals held that the tractor in question still belonged to Wilfredo
Dy when it was seized and levied by the sheriff by virtue of the alias writ of execution issued in Civil Case
No. R-16646.

The petitioner now comes to the Court raising the following questions:

A.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS MISAPPREHENDED THE FACTS AND ERRED IN
NOT AFFIRMING THE TRIAL COURT'S FINDING THAT OWNERSHIP OF THE FARM TRACTOR HAD ALREADY
PASSED TO HEREIN PETITIONER WHEN SAID TRACTOR WAS LEVIED ON BY THE SHERIFF PURSUANT TO
AN ALIAS WRIT OF EXECUTION ISSUED IN ANOTHER CASE IN FAVOR OF RESPONDENT GELAC TRADING
INC.

B.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS EMBARKED ON MERE CONJECTURE AND
SURMISE IN HOLDING THAT THE SALE OF THE AFORESAID TRACTOR TO PETITIONER WAS DONE IN
FRAUD OF WILFREDO DY'S CREDITORS, THERE BEING NO EVIDENCE OF SUCH FRAUD AS FOUND BY THE
TRIAL COURT.

C.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS MISAPPREHENDED THE FACTS AND ERRED IN
NOT SUSTAINING THE FINDING OF THE TRIAL COURT THAT THE SALE OF THE TRACTOR BY RESPONDENT
GELAC TRADING TO ITS CO-RESPONDENT ANTONIO V. GONZALES ON AUGUST 2, 1980 AT WHICH TIME
BOTH RESPONDENTS ALREADY KNEW OF THE FILING OF THE INSTANT CASE WAS VIOLATIVE OF THE
HUMAN RELATIONS PROVISIONS OF THE CIVIL CODE AND RENDERED THEM LIABLE FOR THE MORAL
AND EXEMPLARY DAMAGES SLAPPED AGAINST THEM BY THE TRIAL COURT. (Rollo, p. 13)

The respondents claim that at the time of the execution of the deed of sale, no constructive delivery was
effected since the consummation of the sale depended upon the clearance and encashment of the
check which was issued in payment of the subject tractor.

In the case of Servicewide Specialists Inc. v. Intermediate Appellate Court. (174 SCRA 80 [1989]), we
stated that:

xxx xxx xxx

The rule is settled that the chattel mortgagor continues to be the owner of the property, and therefore,
has the power to alienate the same; however, he is obliged under pain of penal liability, to secure the
written consent of the mortgagee. (Francisco, Vicente, Jr., Revised Rules of Court in the Philippines,
(1972), Volume IV-B Part 1, p. 525). Thus, the instruments of mortgage are binding, while they subsist,
not only upon the parties executing them but also upon those who later, by purchase or otherwise,
acquire the properties referred to therein.

The absence of the written consent of the mortgagee to the sale of the mortgaged property in favor of a
third person, therefore, affects not the validity of the sale but only the penal liability of the mortgagor
under the Revised Penal Code and the binding effect of such sale on the mortgagee under the Deed of
Chattel Mortgage.

xxx xxx xxx

The mortgagor who gave the property as security under a chattel mortgage did not part with the
ownership over the same. He had the right to sell it although he was under the obligation to secure the
written consent of the mortgagee or he lays himself open to criminal prosecution under the provision of
Article 319 par. 2 of the Revised Penal Code. And even if no consent was obtained from the mortgagee,
the validity of the sale would still not be affected.

Thus, we see no reason why Wilfredo Dy, as the chattel mortgagor can not sell the subject tractor. There
is no dispute that the consent of Libra Finance was obtained in the instant case. In a letter dated August
27, 1979, Libra allowed the petitioner to purchase the tractor and assume the mortgage debt of his
brother. The sale between the brothers was therefore valid and binding as between them and to the
mortgagee, as well.

Article 1496 of the Civil Code states that the ownership of the thing sold is acquired by the vendee from
the moment it is delivered to him in any of the ways specified in Articles 1497 to 1501 or in any other
manner signing an agreement that the possession is transferred from the vendor to the vendee. We
agree with the petitioner that Articles 1498 and 1499 are applicable in the case at bar.

Article 1498 states:

Art. 1498. When the sale is made through a public instrument, the execution thereof shall be
equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary
does not appear or cannot clearly be inferred.

xxx xxx xxx

Article 1499 provides:

Article 1499. The delivery of movable property may likewise be made by the mere consent or
agreement of the contracting parties, if the thing sold cannot be transferred to the possession of the
vendee at the time of the sale, or if the latter already had it in his possession for any other reason.
(1463a)

In the instant case, actual delivery of the subject tractor could not be made. However, there was
constructive delivery already upon the execution of the public instrument pursuant to Article 1498 and
upon the consent or agreement of the parties when the thing sold cannot be immediately transferred to
the possession of the vendee. (Art. 1499)

The respondent court avers that the vendor must first have control and possession of the thing before
he could transfer ownership by constructive delivery. Here, it was Libra Finance which was in possession
of the subject tractor due to Wilfredo's failure to pay the amortization as a preliminary step to
foreclosure. As mortgagee, he has the right of foreclosure upon default by the mortgagor in the
performance of the conditions mentioned in the contract of mortgage. The law implies that the
mortgagee is entitled to possess the mortgaged property because possession is necessary in order to
enable him to have the property sold.

While it is true that Wilfredo Dy was not in actual possession and control of the subject tractor, his right
of ownership was not divested from him upon his default. Neither could it be said that Libra was the
owner of the subject tractor because the mortgagee can not become the owner of or convert and
appropriate to himself the property mortgaged. (Article 2088, Civil Code) Said property continues to
belong to the mortgagor. The only remedy given to the mortgagee is to have said property sold at public
auction and the proceeds of the sale applied to the payment of the obligation secured by the
mortgagee. (See Martinez v. PNB, 93 Phil. 765, 767 [1953]) There is no showing that Libra Finance has
already foreclosed the mortgage and that it was the new owner of the subject tractor. Undeniably, Libra
gave its consent to the sale of the subject tractor to the petitioner. It was aware of the transfer of rights
to the petitioner.
Where a third person purchases the mortgaged property, he automatically steps into the shoes of the
original mortgagor. (See Industrial Finance Corp. v. Apostol, 177 SCRA 521 [1989]). His right of
ownership shall be subject to the mortgage of the thing sold to him. In the case at bar, the petitioner
was fully aware of the existing mortgage of the subject tractor to Libra. In fact, when he was obtaining
Libra's consent to the sale, he volunteered to assume the remaining balance of the mortgage debt of
Wilfredo Dy which Libra undeniably agreed to.

The payment of the check was actually intended to extinguish the mortgage obligation so that the
tractor could be released to the petitioner. It was never intended nor could it be considered as payment
of the purchase price because the relationship between Libra and the petitioner is not one of sale but
still a mortgage. The clearing or encashment of the check which produced the effect of payment
determined the full payment of the money obligation and the release of the chattel mortgage. It was not
determinative of the consummation of the sale. The transaction between the brothers is distinct and
apart from the transaction between Libra and the petitioner. The contention, therefore, that the
consummation of the sale depended upon the encashment of the check is untenable.

The sale of the subject tractor was consummated upon the execution of the public instrument on
September 4, 1979. At this time constructive delivery was already effected. Hence, the subject tractor
was no longer owned by Wilfredo Dy when it was levied upon by the sheriff in December, 1979. Well
settled is the rule that only properties unquestionably owned by the judgment debtor and which are not
exempt by law from execution should be levied upon or sought to be levied upon. For the power of the
court in the execution of its judgment extends only over properties belonging to the judgment debtor.
(Consolidated Bank and Trust Corp. v. Court of Appeals, G.R. No. 78771, January 23, 1991).

The respondents further claim that at that time the sheriff levied on the tractor and took legal custody
thereof no one ever protested or filed a third party claim.

It is inconsequential whether a third party claim has been filed or not by the petitioner during the time
the sheriff levied on the subject tractor. A person other than the judgment debtor who claims ownership
or right over levied properties is not precluded, however, from taking other legal remedies to prosecute
his claim. (Consolidated Bank and Trust Corp. v. Court of Appeals, supra) This is precisely what the
petitioner did when he filed the action for replevin with the RTC.

Anent the second and third issues raised, the Court accords great respect and weight to the findings of
fact of the trial court.1wphi1 There is no sufficient evidence to show that the sale of the tractor was in
fraud of Wilfredo and creditors. While it is true that Wilfredo and Perfecto are brothers, this fact alone
does not give rise to the presumption that the sale was fraudulent. Relationship is not a badge of fraud
(Goquiolay v. Sycip, 9 SCRA 663 [1963]). Moreover, fraud can not be presumed; it must be established
by clear convincing evidence.

We agree with the trial court's findings that the actuations of GELAC Trading were indeed violative of
the provisions on human relations. As found by the trial court, GELAC knew very well of the transfer of
the property to the petitioners on July 14, 1980 when it received summons based on the complaint for
replevin filed with the RTC by the petitioner. Notwithstanding said summons, it continued to sell the
subject tractor to one of its stockholders on August 2, 1980.
WHEREFORE, the petition is hereby GRANTED. The decision of the Court of Appeals promulgated on
March 23, 1990 is SET ASIDE and the decision of the Regional Trial Court dated April 8, 1988 is
REINSTATED.

SO ORDERED.

PERFECTO DY, JR. petitioner, vs. COURT OF APPEALS, GELAC TRADING INC., and ANTONIO V. GONZALES,
Respondents.

G.R. No. 92989 July 8, 1991

FACTS:

Wilfredo Dy purchased a truck and a farm tractor through LIBRA which was also mortgaged with the
latter, as a security to the loan.

Petitioner, expresses his desire to purchased his brothers tractor in a letter to LIBRA which also includes
his intention to shoulder its mortgaged. LIBRA approved the request. At the time that Wilfredo Dy
executed a deed of absolute sale in favor of petitioner, the tractor and truck were in the possession of
LIBRA for his failure to pay the amortization.

When petitioner finally fulfilled its obligation to pay the tractor, LIBRA would only release the same only
if he would also pay for the truck. In order to fulfill LIBRAs condition, petitioner convinced his sister to
pay for the remaining truck, to which she released a check amounting to P22,000. LIBRA however,
insisted that the check must be first cleared before it delivers the truck and tractor.

Meanwhile, another case penned Gelac Trading Inc vs. Wilfredo Dy was pending in Cebu as a case to
recover for a sum of money (P12,269.80). By a writ of execution the court in Cebu ordered to seize and
levy the tractor which was in the premise of LIBRA, it was sold in a public auction to which it was
purchased by GELAC. The latter then sold the tractor to Antonio Gonzales.

RTC rendered in favor of petitioner.

CA dismissed the case, alleging that it still belongs to Wilfredo Dy.

ISSUE:
Whether or not there was a consummated sale between Petitioner and LIBRA?

HELD:

NO.

The payment of the check was actually intended to extinguish the mortgage obligation so that the
tractor could be released to the petitioner. It was never intended nor could it be considered as payment
of the purchase price because the relationship between Libra and the petitioner is not one of sale but
still a mortgage. The clearing or encashment of the check which produced the effect of payment
determined the full payment of the money obligation and the release of the chattel mortgage. It was not
determinative of the consummation of the sale. The transaction between the brothers is distinct and
apart from the transaction between Libra and the petitioner. The contention, therefore, that the
consummation of the sale depended upon the encashment of the check is untenable.