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190957 June 5, 2013
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, Petitioner, vs. APAC MARKETING CORPORATION, represented by CESAR M. ONG, JR., Respondents. DECISION SERRENO, CJ.: In this Petition for Review on Certiorari under Rule 45 of the Revised Rules on Civil Procedures, the primordial issue to be resolved is whether the Court of Appeals (CA)1 correctly affirmed the court a quo2 in holding petitioner liable to respondent for attorney’s fees. The Antecedent Facts Considering that there are no factual issues involved, as the Court of Appeals (CA) adopted the findings of fact of the Regional Trial Court (RTC) of Quezon City, Branch 96, we hereby adopt the CA’s findings, as follows: The present case involves a simple purchase transaction between defendant-appellant Philippine National Construction Corporation (PNCC), represented by defendants-appellants Rogelio Espiritu and Rolando Macasaet, and plaintiff-appellee APAC, represented by Cesar M. Ong, Jr., involving crushed basalt rock delivered by plaintiff-appellee to defendant-appellant PNCC. On August 17, 1999, plaintiff-appellee filed with the trial court a complaint against defendantsappellees for collection of sum of money with damages, alleging that (i) in March 1998, defendantsappellants engaged the services of plaintiff-appellee by buying aggregates materials from plaintiffappellee, for which the latter had delivered and supplied good quality crushed basalt rock; (ii) the parties had initially agreed on the terms of payment, whereby defendants-appellants would issue the check corresponding to the value of the materials to be delivered, or "Check Before Delivery," but prior to the implementation of the said payment agreement, defendants-appellants requested from plaintiff-appellee a 30-day term from the delivery date within which to pay, which plaintiff-appellee accepted; and (iii) after making deliveries pursuant to the purchase orders and despite demands by plaintiff-appellee, defendants appellants failed and refused to pay and settle their overdue accounts. The complaint prayed for payment of the amount of P782,296.80 "plus legal interest at the rate of not less than 6% monthly, to start in April, 1999 until the full obligation is completely settled and paid," among others. On November 16, 1999, defendants-appellants filed a motion to dismiss, alleging that the complaint was premature considering that defendant-appellant PNCC had been faithfully paying its obligations to plaintiff-appellee, as can be seen from the substantial reduction of its overdue account as of August 1999.
In an Order dated January 17, 2000, the trial court denied the motion to dismiss. Thus, defendantsappellants filed their answer, alleging that the obligation of defendant-appellant PNCC was only with respect to the balance of the principal obligation that had not been fully paid which, based on the latest liquidation report, amounted to onlyP474,095.92. After the submission of the respective pre-trial briefs of the parties, trial was held. However, only plaintiff-appellee presented its evidence. For their repeated failure to attend the hearings, defendants-appellants were deemed to have waived the presentation of their evidence. On July 10, 2006, the trial court rendered a Decision, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered in favor of the plaintiff, ordering defendants jointly and solidarily to pay: 1. P782,296.80 as actual damages; 2. P50,000.00 as attorney’s fees, plus P3,000.00 per court appearance; 3. Cost of suit. SO ORDERED. Defendants-appellants filed a motion for reconsideration, alleging that during the pendency of the case, the principal obligation was fully paid and hence, the award by the trial court of actual damages in the amount ofP782,269.80 was without factual and legal bases. In an Order dated October 6, 2006, the trial court considered defendants-appellants’ claim of full payment of the principal obligation, but still it ordered them to pay legal interest of twelve per cent (12%) per annum. Thus: "WHEREFORE, the decision dated July 10, 2006 is hereby modified, by ordering defendants jointly and solidarily to pay plaintiff as follows, to wit: 1. P220,234.083 2. P50,000.00 as attorney’s fees, plus P3,000.00 per court appearance; 3. Cost of Suit. SO ORDERED." Defendants-appellants filed the present appeal which is premised on the following assignment of errors: I. THE REGIONAL TRIAL COURT GRAVELY ERRED IN AWARDING INTEREST AT THE RATE OF 12% PER ANNUM AMOUNTING TO P220,234.083 AND ATTORNEY’S FEES IN FAVOR OF PLAINTIFF-APPELLEE.
this article restrictively enumerates the instances when these fees may be recovered. petitioner now assails before us the 9 July 2009 Decision of the CA by raising the sole issue of whether the CA gravely erred in awarding attorney’s fees to respondent. The Order dated October 6. As a general rule. (3) In criminal cases of malicious prosecution against the plaintiff. computed from January 8. Article 2208 of the New Civil Code of the Philippines states the policy that should guide the courts when awarding attorney’s fees to a litigant. 2006 is affirmed in all other respects. THE RULING OF THE COURT OF APPEALS On 9 July 2009. (2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. herein petitioner filed a Motion for Reconsideration. 2208. 1999 until its full payment in January 2001. the parties may stipulate the recovery of attorney’s fees. THE REGIONAL TRIAL COURT GRAVELY ERRED IN HOLDING DEFENDANTS ROGELIO ESPIRITU AND ROLANDO MACASAET JOINTLY AND SOLIDARILY LIABLE WITH DEFENDANT PNCC.4 It should be noted that in said motion. Thus. However. Defendants-appellants Rogelio Espiritu and Rolando Macasaet are absolved from liability.II. 88827. (4) In case of a clearly unfounded civil action or proceeding against the plaintiff. other than judicial costs. petitioner fully agreed with the CA Decision imposing 6% legal interest per annum on the principal obligation and absolving Rogelio Espiritu and Rolando Macasaet from any liability as members of the board of directors of PNCC. the appellate court’s Former Special Fourth Division denied petitioner’s Motion for Reconsideration in a Resolution dated 18 January 2010.6 THE SOLE ISSUE Aggrieved.R. attorney's fees and expenses of litigation. In the absence of stipulation. CV No. affirming with modification the assailed Decision of the court a quo. THE COURT’S RULING The Petition is impressed with merit. In the absence on such stipulation. 2006 is affirmed. cannot be recovered. . except: (1) When exemplary damages are awarded. which raised the lone issue of the propriety of the award of attorney’s fees in favor of respondent. the Special Fourth Division of the CA promulgated a Decision3 in CA-G. the main focus of the Motion for Reconsideration was on the CA’s affirmation of the court a quo’s Decision awarding attorney’s fees in favor of respondent. The dispositive portion of the CA Decision reads as follows: WHEREFORE. the appealed Order dated October 6. to wit: Art. subject to the modification that defendant-appellant PNCC is ordered to pay legal interest at six per cent (6%) per annum on the principal obligation. On 29 July 2009.
the attorney's fees and expenses of litigation must be reasonable.(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid. and in all cases it must be reasonable. Attorney's fees. legal. They are not to be awarded every time a party wins a suit. considering the dual concept of these fees as ordinary and extraordinary: It is settled that the award of attorney's fees is the exception rather than the general rule. as part of damages. In Benedicto v. still attorney’s fees may not be awarded where no sufficient showing of bad faith could be reflected in a party’s persistence in a case other than an erroneous conviction of the righteousness of his cause. We do not put a premium on the right to litigate. Villaflores. counsel's fees are not awarded every time a party prevails in a suit because of the policy that no premium should be placed on the right to litigate. attorney’s fees may be recovered as actual or compensatory damages under any of the circumstances provided for in Article 2208 of the Civil Code. and equitable justification. v. Attorney's fees as part of damages are awarded only in the instances specified in Article 2208 of the Civil Code. (9) In a separate civil action to recover civil liability arising from a crime. (11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered. (6) In actions for legal support. while in its extraordinary concept. CA. (10) When at least double judicial costs are awarded. The power of the court to award attorney’s fees under Article 2208 demands factual. attorney's fees represent the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. In all cases. On occasions that those fees are awarded.8 we explained the reason behind the need for the courts to arrive upon an actual finding to serve as basis for a grant of attorney’s fees. laborers and skilled workers. they may be awarded by the court as indemnity for damages to be paid by the losing party to the prevailing party. it is necessary for the court to make findings of fact and law that would bring the case within the ambit of these enumerated instances to justify the grant of such award. In ABS-CBN Broadcasting Corp. The general rule is that attorney’s fees cannot be recovered as part of damages because of the policy that no premium should be placed on the right to litigate. As such. Even when a claimant is compelled to litigate with third persons or to incur expenses to protect his rights. the basis for the grant must be clearly expressed in the decision of the court. We can glean from the above ruling that attorney’s fees are not awarded as a matter of course every time a party wins. are not necessarily equated to the amount paid by a litigant to a lawyer.7 this Court had the occasion to expound on the policy behind the grant of attorney’s fees as actual or compensatory damages: (T)he law is clear that in the absence of stipulation. just and demandable claim. (7) In actions for the recovery of wages of household helpers. In the ordinary sense. 1âwphi 1 . (8) In actions for indemnity under workmen's compensation and employer's liability laws.
R. Absent such finding. Hence. The CA merely adopted the RTC’s rational for the award.11 It bears reiteration that the award of attorney’s fees is an exception rather than the general rule. in favor of respondent APAC Marketing Incorporated. There was no elaboration on the basis. Thus.000. a rigid standard is imposed on the courts before these fees could be granted.00 which it paid as acceptance fee and P3. legal. SO ORDERED. was forced to litigate to protect the latter’s interest. CV No. It is not enough that they merely state the amount of the grant in the dispositive portion of their decisions. or equitable justification for the award of attorney’s fees in favor of respondent. 88827 is MODIFIED. is hereby DELETED. WHEREFORE. plaintiff is entitled to recover attorney’s fees in the amount of P50. legal.000 as acceptance fee and P3. legal.000. we hold that the award of attorney’s fees by the court a quo. The appellate court simply quoted the portion of the RTC Decision that granted the award as basis for the affirmation thereof.000 as appearance fee. we find that there is an obvious lack of a compelling legal reason to consider the present case as one that falls within the exception provided under Article 2208 of the Civil Code. the foregoing Petition is GRANTED. .13 The only discernible reason proffered by the trial court in granting the award was that respondent. but cannot find any factual.Petitioner contends that the RTC’s Decision has no finding that would fall under any of the exceptions enumerated in Article 2208 of the new Civil Code.9 We agree with petitioner on these points. was improper and must be deleted.12 We have perused the assailed CA’s Decision.10 Due to the special nature of the award of attorney’s fees. Further. as sustained by the appellate court. and equitable justification to avoid speculation and conjecture surrounding the grant thereof. as complainant in the civil case. which in this case we find to be sorely inadequate. There is therefore an absence of an independent CA finding of the factual circumstances and legal or equitable basis to justify the grant of attorney’s fees. We have consistently held that an award of attorney’s fees under Article 2208 demands factual. The assailed Decision dated 9 July 2009 of the Court of Appeals in CA-G.00 as appearance fee. to litigate and to protect his interest by reason of an unjustified act of the other party. No pronouncement as to costs. The RTC found as follows: x x x since it is clear that plaintiff was compelled to hire the services of a counsel. there must be compelling legal reason to bring the case within the exceptions provided under Article 2208 of the Civil Code to justify the award. in that the award of attorney’s fees in the amount of P50. thus. it alleges that the court a quo has not given any factual. it is imperative that they clearly and distinctly set forth in their decisions the basis for the award thereof. or equitable justification for applying paragraph 11 of Article 2208 as basis the latter’s exercise of discretion in holding petitioner liable for attorney’s fees.
Bataan. 2005 Decision4 and July 18. 173829 June 10. alleging as follows: xxxx 6. 47382.R. Bataan.R. No. 47381. VICHUACO. Years later. instead. 47379. 1995. was the registered owner of eight (8) parcels of land situated at Saysain. represented by its Provincial Governor ANTONIO ROMAN. 2006 Resolution5 of the Court of Appeals (CA) in CA-G.. J.762. with a total land area of 1. Branch 1. Bataan. DECISION PERALTA. distrained the real properties stated in the immediately preceeding (sic) paragraph. 47380.364. 2003 Decision6 of the Regional Trial Court (RTC). vs. Petitioner Valbueco.90).123 sq. 47377. Respondents. Inc. petitioner filed a complaint to nullify the tax sale and the consolidation of title and ownership in favor of respondent Province.. 47385 and 47386 of the Register of Deeds for the Province of Bataan. and PASTOR P. which dismissed the civil complaint filed by petitioner. respondent TREASURER failed and omitted to have the distraint annotated.762. PROVINCE OF BATAAN. Balanga City. 7. 2013 VALBUECO. . Bataan. 47378. the above-mentioned properties were sold at public auction sometime in 1987 or 19887 whereby respondent Province of Bataan (Province) emerged as the winning bidder in the amount of Seventy Thousand Seven Hundred Sixty-Two Pesos and 90/100 (P70. m. 81191 affirming the August 19.Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. To effect collection of taxes on petitioner’s real property x x x in the total amount of SEVENTY THOUSAND SEVEN HUNDRED SIXTY-TWO PESOS AND NINETY CENTAVOS (P70. and to reconvey the possession. AQUINO. described in and covered by Transfer Certificates of Title (TCT) No. CV No. In making and effecting the distraint.862. defendant provincial TREASURER proceeded to effect collection of taxes without first making a distraint on the personality (sic) of petitioner which is worth more than its alleged total tax liability. on March 29.2 in his official capacity as Registrar of the Register of Deeds of Balanga.330.1 EMMANUEL M. title and ownership of the subject properties.90).00 as of 1994. Due to petitioner’s unpaid real property taxes.: Assailed in this Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure are the October 24. INC. Petitioner. and an assessed value of P1. Bagac.3 in his official capacity as Provincial Treasurer of Balanga.
thus: "SEC. 67. That all legal requirements under Presidential Decree No. 9. – Remedies. notice of delinquency as required in Section sixty-five hereof shall be sufficient for the purpose. did it learn that the aforesaid parcels of land were included in the auction sale conducted by respondent TREASURER pursuant to the provisions of Presidential Decree No. in the succeeding section. 13. while petitioner was in the process of negotiating with the representatives of the Department of Agrarian Reform for the possibility of exemption of its landholdings at Bagac. levy. As a consequence of the anomalous and irregular distraint. 9." (underlining supplied) In fact. Having made the annotated levy on distraint. respondents caused the unlawful consolidation of title and ownership to the above-mentioned real properties in the name of the respondent PROVINCE x x x. 464. no notice of the sale has been served upon the petitioner. That granting hypothetically that there was no distraint of personal property first of the petitioner before proceeding with the distraint of real properties. On several occasions petitioner requested and demanded the reconveyance of the above-mentioned properties from the respondents but to no avail. To make matters worse. simultaneous and unconditional. Likewise. x x x8 In their Answer with Counterclaim. no attempt has been made by the petitioner to pay the tax delinquency. 12. – Collection of real property tax may be enforced through any or all of the remedies provided under this Code. the law then prevailing. respondent TREASURER caused the sale of the real properties at the auction sans the necessary publication and/or notice in at least three (3) public and conspicuous places. much less. 464. auction sale and consolidation of title and ownership of the above-mentioned real properties in the name of the respondent PROVINCE. x x x9 . cumulative. 11. it is so provided that "payment may be enforced by distraining the personal property x x x" (underscoring supplied) which only means that distraint of personal property is not a condition sine qua non before real property could be distraint.8. redeem the property from the respondent provincial government. 10. averred: xxxx 8. It was only sometime in the first quarter of 1992. That despite repeated demands. respondents denied petitioner’s allegations and. Presidential Decree No. Formal demand for the payment of the delinquent taxes and penalties due need not be made before any of such remedies may be resorted to. and the use or nonuse of one remedy shall not be a bar against the institution of the others. Bataan. 10. petitioner suffered actual damages in an amount to be proved at the trial of this case. by way of special and affirmative defenses. 464 had been properly complied with in the public auction sale of the delinquent properties. provides under Section 67.
petitioner manifested that it deposited before the clerk of court the amount ofP70.00. CLOA-4465. Section 3416 of Executive Order No. 3-92. objecting to the operation of the CARP for the reason that the subject properties are pasture lands.12 In their Answer with Compulsory Counterclaim.762.033. that the consolidation of title and transfer of ownership in favor of respondent Province are in accordance with the law. Rule II of the Department of Agrarian Reform Adjudication Board (DARAB) New Rules of Procedure dated May 30.90 and P62. 1994. on November 16. CLOA-4466. CLOA-4465. petitioner later on filed an Amended Complaint10 dated September 10. and that pursuant to the decision of the Court in Luz Farms v. that petitioner is guilty of estoppel and is barred by laches. 1604701. the determination of which is exclusively lodged before the DARAB. Pampanga. within the CARP coverage. the trial court dismissed the Amended Complaint. which are agricultural in nature.13 the CARP beneficiaries moved to dismiss the Amended Complaint.A. however. They asserted that petitioner’s claim does not state a cause of action for failure to exhaust administrative remedies prior to filing of the case. 1998 as its cash deposit under O.90 which petitioner deposited on November 13. . petitioner’s complaint was nonetheless dismissed. the DAR Secretary unlawfully and unscrupulously awarded the subject properties through the issuance of Certificates of Land Ownership Award (CLOA) No.) No. judgment is hereby rendered dismissing its complaint for lack of merit and ordering the petitioner to pay the Province of Bataan the sum of P50. in view of the foregoing. CLOA-4464.000. 1998 impleading the Secretary of the Department of Agrarian Reform (DAR) and eight-five (85) individual beneficiaries as additional defendants. CLOA-4464. it reconsidered the resolution on February 8. CLOA. 00146062. valid and binding conformably with RA 6657 and related laws. hence.4466. it was argued that the RTC has no jurisdiction over DAR because the ultimate relief prayed for by petitioner is the cancellation of the CLOAs issued to the qualified beneficiaries of the CARP under RA 6657. Petitioner further alleged that: on December 2. The dispositive portion of the August 19.11 TCT No. On September 29. The clerk of court of the Regional Trial Court of Bataan is hereby ordered to refund the sum of P133. Meantime. it wrote a letter to the DAR Secretary through the OIC Regional Director of Region 3. which respectively represent the price the subject properties were sold at public auction and the two percent (2%) interest per month reckoned from the date of the sale until the filing of the complaint.271. it still has jurisdiction to decide on the validity or legality of the auction sale and the consolidation of ownership and/or transfer of title of the subject properties in favor of respondent Province. Likewise. and Supreme Court Administrative Circular No.R. and 00146071 in favor of the defendant beneficiaries. 1998. 6657. and CLOA-4468 issued to the beneficiaries should be cancelled for being null and void. The court ruled that. even if it lacks jurisdiction over the DAR Secretary and the CARP beneficiaries. 00146065. CLOA-4467. 1987.It appearing that the subject lots were placed under the coverage of the Comprehensive Agrarian Reform Program (CARP) and distributed to qualified beneficiaries under Republic Act (R. Sections 50 and 5715 of RA 6657. and that they are the qualified and legal beneficiaries of the subject properties. the DAR Secretary sought the dismissal of the Amended Complaint. that TCT Nos. 1994. that instead of answering said letter.17 Subsequently. 129-A dated July 26. 1999. 00146060. Secretary of the Department of Agrarian Reform. San Fernando. and CLOA-4468 are legal. CLOA-4467.00 as attorney’s fees. 2003 Decision reads: WHEREFORE.18 After trial on the merits. Invoking Section 114 (f) and (g). 2000.
23 The Court is thus. Juan. but its appeal was dismissed on October 24. occupation of the area. hence.21 In a petition for review. demand for tax payment or collection notice was received and that there was no publication and posting of notice of sale held. his duties and responsibilities include: bringing out some technical matters to the company (e. it is not a trier of facts and will not inquire into and review the evidence presented by the contending parties during the trial and relied upon by the lower courts to support their findings. however. 2005. and sees no reason to disturb the same. Q: Whose duties is it to keep in custody the records of the corporation? A: Our records department. petitioner’s motion for reconsideration was also denied..22 The issues raised in this petition undeniably involve only questions of fact. the Court can only pass upon questions of law. with respondents in connection thereto.SO ORDERED. We cannot lend credence to the testimony of Gaudencio P. We have equally held that the claim of lack of notice is a factual question. it should be dismissed outright. use of grazing lands) and preparing plans for implementation by the company (e. which was deleted for lack of basis. Even if We dig deeper and scrutinize the entire case records. as well as the legal requirements for a tax delinquency sale under Presidential Decree No.20 are mandatory and that failure to comply therewith can invalidate the sale in view of the requirements of due process. The RTC Decision was affirmed except for the award of attorney’s fees. uses of the land for forestry and agricultural purposes.g. the conversion of the area for pasture purposes). The petition lacks merit. satisfied with the factual findings of the trial court. Q: Who heads the records department? .. While it has been ruled that the notices and publication. On July 18. According to him. 464 (otherwise known as the Real Property Tax Code). BANZON: Q: It is not among your duties to keep records on file? A: No. have nothing to do with the duty of ensuring the prompt and timely settlement of petitioner’s realty taxes or of making any representation.g.26 planning some other plans for the implementation in the area like reforestation and other forestry cases.24 that no notice of tax delinquency.28These. petitioner utterly failed to present preponderant evidence to support its allegations that the auction sale of the subject properties due to tax delinquency was attended by irregularities. Juan categorically admitted that he is not the custodian of petitioner’s corporate records: ATTY. for or in behalf of petitioner. the same conclusion would be arrived at. sir.27 and planning preparation of reports.19 Petitioner elevated the case to the CA. sir. On this ground alone.25 land and boundary disputes between petitioner and owners of adjoining areas. The two witnesses it presented are neither competent nor convincing to attest with reasonable certainty that respondents failed to observe the procedural requirements of PD 464. as affirmed by the CA. 2006. this petition. In fact. petitioner’s Forestry and Technical Consultant who claimed to have been an employee since 1964. Indeed.
31 There is no showing. The Court cannot simply rely on the representation of Juan and Atty. No wonder. Domingo Lalaquit. Q: When did Mr. then (but now deceased) President of petitioner. sir. sir. at the time the matter was referred to him. testimony: Q: When you said that the corporation was not notified by the Provincial Treasurer you are assuming that must have been so because you could not find any record of any notice? A: I have not seen any notice."] you mean ["]yes["]? A: Yes. sir.A: It is now Gil Herpe. Valeriano Bueno. sir. Herpe assume his position as the custodian of the corporation? A: From 1989."32 Conformably with the hearsay rule. Q: And so you presumed that there must have been no notice? A: Precisely.33 the trial court correctly allowed the questions propounded by petitioner’s counsel to Juan and Atty. sir. the second and last witness who professed to be the legal counsel of petitioner since 1973. sir. if not confused. he is not aware of and did not receive any notices of assessment or tax delinquency from respondent Province for and in behalf of petitioner. Q: Up to the present? A: Yes. Q: In the same manner that when you said that you have not received any notice of assessment you surmised that there must have been no or you have no record of notice of assessment? xxx That’s why you assumed that there was no assessment? A: Yes. he found out that these were already sold at public auction. . Bueno.30 With respect to the subject properties. Bueno told them so in a "conversation.29 Same thing can be said of Atty. Lalaquit that there was no notice of assessment and/or demand for payment of tax delinquency made by respondents because it was what Mr. based on his own testimony. Q: When you said ["]precisely[. Neither can We bank on Juan’s mere assumption and speculation nor on his inconsistency. Lalaquit but only insofar as they testify that a "conversation" took place and not necessarily admitting as true the alleged utterance of Mr. sir. that he was involved in taking care of the legal concerns of the subject properties before or during its tax sale. He noted that he handled petitioner’s legal problems only when referred to him by Mr.
sir. sir. Bueno. sir I did not ask Mr. [He] was the one [who probably] told me. your answer to the question is not correct? A: I think so. sir. you asked Mr. you were the one who asked[. according to you. Q: You have not seen because according to you all records of the corporation were lost? A: Not exactly. Q: But. distraint. Q: In your testimony of June 4 of this year the question asked of you was "did you not ask the president if there was a notice of assessment?" and your answer was ["yes. Bueno? A: No.34 xxxx ATTY. but I have not noticed. sir. sir. you have to give the same reason because that is your assumption and opinion on your part because you have no record of the levy? A: We have not seen that. BANZON: Q: x x x Why do you have to ask Mr. Q: What do you mean that you have no notice? In other words there must have been records but you have no notice? A: Yes. sir.] it is not Mr. Bueno regarding the assessment? A: Because he is concerned about the property. sir. you have not received any. you assumed that there was no demand because according to you all records were lost? A: Yes. Do you recall that you have asked that question and you made that answer? A: Yes. Bueno? A: No. sir I did not ask Mr. sir. . Q: Do you recall of any other question which you answered is not correct (sic)? A: No more. Q: So.Q: In the same manner when you testified that there was no demand made by the Provincial Treasurer you. Bueno. Q: When you stated that there was no levy. it must have been kept in the office. sir. Q: So. sir."].
sir.Q: All are correct? A: Maybe. he answered as follows: Q: Why do you have to secure from the SEC[?] why you do not ask your (sic) secretary of the corporation who is the legal custodian of this corporation? A: The papers could no longer be located after we transferred office several times. sir. you are not sure that your other previous answers were correct? A: Yes. Q: What other papers that you cannot locate? xxxx A: There are other titles and documents that could not be located so we requested for certified true copy of these documents. you are not sure that your answer is not correct? A: Specifically yes I said maybe. In both instances. or the same were sent to but not received by petitioner without the fault of respondents. Q: You have not seen those documents because this (sic) was (sic) among those lost in your records? . Q: When you said "maybe". Q: Do you know the meaning of ["]maybe["]? A: Not sure.35 Reading through the transcript of stenographic notes unveils two likely scenarios that could have actually transpired in this case: either the notices sent by respondents were lost by petitioner. Q: And these papers may include notices which must have been sent to Valbueco regarding this property from the province of Bataan? A: Yes. sir. Q: When you said ["]maybe["]. Similar to what happened on its copy of Certificate of Filing of Amended Articles of Incorporation and Certificate of Filing of By-laws. Juan confessed that the notices sent by respondent Province were probably one of those corporate documents lost due to the "several" transfer of petitioner’s office. Q: And this may (sic) among those lost of the notices of assessment or levy? A: We have not seen those documents. We cannot invalidate the public auction or nullify the consolidation and transfer of title in favor of respondent Province. sir. sir. During his cross-examination. sir. sir.
Q: And these are evident in the annexes of the complaint. Q: At any rate. sir.36 The testimony of Atty. ICOPHIL Bldg. sir.37 Under Section 7338 of PD 464 – . Bank of Philippine Island (sic). is it not? And Valbueco Incorporporation (sic) and I quote. that address appears or appeared in all certificates of title involving properties in Bagac which is the subject matter of this action? A: I am not very sure sir. sir. BY ATTY. sir. Valbueco Incorporation organized and existing under the laws of Republic of the Philippines with office at 7th Floor. Paco. . sir. Bueno holds office in the whole building of ICOPHIL. Q: There is also an office at the 4th Floor. Q: That is for Valbueco Industrial and Development Corporation? A: The group of companies of Mr. Q: And did you notify the treasurer’s office regarding the change of address? A: I did not sir. Makati. Rizal? A: If that appears in the document sir. Bueno used to hold office at 7th Floor of Bank of Philippine Island (sic) Building at Ayala Avenue in Makati? A: Yes. Q: The reason why you stated that you have not seen any of the documents coming from the Province of Bataan in your files? A: Yes.A: Maybe. Q: That is his usual address? A: From 1973 up to 1974 sir. . BANZON: xxxx Q: When you stated that . Mr. Lalaquit also shows that petitioner changed its office address in 1975 without even informing respondent Province: CROSS EXAM. Building Ayala Avenue. Manila? A: Yes. 1081 Pedro Gil. by the way.
Bank of P. 47381. 47378. In determining where the preponderance or superior weight of evidence on the issues involved lies. and posting that respondent Provincial Treasurer observed relative to the auction sale of the subject properties. the nature of such facts. publication. The fault herein lies with petitioner. it is also understandable that Espino could no longer remember the minute details surrounding the notices. 47382. More importantly. By "preponderance of evidence" is meant that the evidence as a whole adduced by one side is superior to that of the other. and also their personal credibility as far as the same may legitimately appear at the . in Sapu-an v. Jimenez. Riosa Boyco. The principle We enunciated in Valencia v.I. respondent Province..44 Considering the long time that elapsed between the public sale held sometime in 1987 or 1988 and the presentation of her testimony in 2002. as well as in the tax declarations. through its witness. She could not. Sinaban42 that there can be no presumption of regularity of any administrative action which results in depriving a taxpayer of his property through a tax sale does not apply in the case at bar. these cases cited by petitioner involved facts that are way too different from the one found in the instant case. Josephine Espino. show any documentary proof mainly because the exclusive folder of petitioner’s properties are now missing despite exercise of all possible means to locate them in other property files. Makati. Section 73 gives the treasurer the option of where to send the notice of sale. The Court. Ayala Avenue. being in charge of collecting taxes.45 We held: The general rule in civil cases is that the party having the burden of proof must establish his case by a preponderance of evidence. however. 47377. their interest or want of interest. it should be aware of the chances it was taking should notices be sent to it. During her presentation. it is reasonable to deduce that respondent Provincial Treasurer actually sent the notices at the address uniformly indicated in TCT No. Court of Appeals. 47385 and 47386. By and large. either (i) at the address as shown in the tax rolls or property tax record cards of the municipality or city where the property is located or (ii) at his residence. Espino stated that she is a Local Treasury Operation Officer IV of the Provincial Treasurer’s Office since March 2000 and that she had previously served as Local Treasury Operations Officer and Local Revenue Collection Officer III of the Provincial Treasurer’s Office. It had a number of years to amend its address and provide a more updated and reliable one.41 and Requiron v. By neglecting to do so. the witnesses’ manner of testifying. the probability or improbability of their testimony. their intelligence. nowhere in the wordings is there an indication of a requirement that notice must actually be received by the intended recipient. Bldg. unequivocally attested that the procedural requisites mandated by PD 464 were definitely observed.43 Under oath.39 In this case. therefore. Rizal. Indeed.x x x notices of the sale at public auction may be sent to the delinquent taxpayer. she declared to have personal knowledge of the fact that notice of tax delinquency was sent by the Provincial Treasurer’s Office to petitioner. 47380. their means and opportunity of knowing the facts on which they are testifying.40 Camo v. if known to such treasurer or barrio captain. Compliance by the treasurer is limited to strictly following the provisions of the statute: he may send it at the address of the delinquent taxpayer as shown in the tax rolls or tax records or to the residence if known by him or the barrio captain. Respondent Provincial Treasurer cannot be faulted for presumably sending the notices to petitioner’s address indicated in the land titles and tax declarations of the subject properties. in the present case. Plainly. the court may consider all the facts and circumstances of the case. In giving the treasurer the option. not with respondent Provincial Treasurer. which is 7th Floor. affirms the RTC’s opinion that petitioner was not able to establish its cause of action for its failure to submit convincing evidence to establish a case and the CA’s position that it must rely on the strength of its evidence and not on the weakness of respondents’ claim. 47379.
46 What petitioner has accomplished is only to cast doubts by capitalizing on the absence of documentary evidence on the part of respondents. Balanga City. there is no preponderance of evidence on his side if such evidence is insufficient in itself to establish his cause of action. especially when the same had been affirmed by the CA.trial. 2006 Resolution of the Court of Appeals in CAG. the plaintiff must rely on the strength of his evidence and not on the weakness of the defendant's claim. although the preponderance is not necessarily with the greatest number.49 WHEREFORE.48 Under this principle. even if the evidence of the plaintiff may be stronger than that of the defendant. the court will find for the defendant. which sustained the August 19. It must be stressed that overturning judgments in civil cases should be based on preponderance of evidence. The court may also consider the number of witnesses. 2005 Decision and July 18. Bataan dismissing the case are hereby AFFIRMED.2003 Decision of the Regional Trial Court. and with the further qualification that. when the scales shall stand upon an equipoise. the court should find for the defendant. CV No.R. plaintiffs in civil cases need to do much more to overturn findings of fact and credibility by the trial court. . While such approach would succeed if carried out by the accused in criminal cases. The assailed October 24. 81191. Branch 1. the petition is DENIED.47 The "equiponderance of evidence" rule states that when the scale shall stand upon an equipoise and there is nothing in the evidence which shall incline it to one side or the other. 1âwphi1 It is settled that matters of credibility are addressed basically to the trial judge who is in a better position than the appellate court to appreciate the weight and evidentiary value of the testimonies of witnesses who have personally appeared before him.
Respondents. ANTONIO D. and MERIDIAN REALTY CORPORATION. Later on. among others. ROSAROSO. with the full knowledge and consent of his second wife. SPOUSES HAM SOLUTAN and **LAILA SOLUTAN. Luis. however. Rosaroso (Angelica). which had already been sold to them. in conspiracy with her mother. Honorata died. Cleofe. and that on the strength of another SPA7 by Luis. The couple had nine (9) children namely: Hospicio. TCT No. No. it was alleged by petitioners Hospicio D. Antonio D. infirm. and Angelica. respondent Laila. Solutan (Laila). Ham Solutan (Ham). ROSAROSO. Lot Nos. J. dated July 21. and Cleofe R. CEB-16957. Antonio. 8). against his daughter. Angelica D. On April 25.5 They also alleged that. 00351. Rosaroso (Antonio). an amended complaint was filed on January 6. LABINDAO. obtained the Special Power of Attorney (SPA).00 with the concurrence of Lourdes. Lucila. and Meridian Realty Corporation (Meridian). and Luis’ second wife. Lucila. 1995. 22 and 23. 194846 * June 19. in their favor. with the spouse of Laila. Inc. CV No. ALGERICA D. 11155 (Lot 19). despite the fact that the said properties had already been sold to them. Branch 8. 7th Judicial Region. Petitioners. Rosaroso. 2013 HOSPICIO D.000. that Luis was then sick. MANUEL D. 1991. LUCILA LABORTE SORIA. TCT. 1996. Due to Luis’ untimely death. 23). Lourdes. and CLEOFE R. TCT No. and of unsound mind. an action for declaration of nullity of documents.Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. 1952. 5665 and 7967. 19 to Vital Lending Investors. Luis married Lourdes Pastor Rosaroso (Lourdes). included as defendants. ROSAROSO.3 In the Amended Complaint. No. blind. executed the Deed of Absolute Sale4 (First Sale) covering the properties with Transfer Certificate of Title (TCT) No. On January 16. 8. Manuel. from Luis (First SPA). in CA G. respondents Laila and Ham mortgaged Lot No. 1993 (Second SPA). Cebu City. including the subject properties. a complaint for Declaration of Nullity of Documents with Damages was filed by Luis.: This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the December 4. for and in consideration of the amount of P150. 22). which reversed and set aside the July 30. Labindao (petitioners) that on November 4. all located at Daanbantayan. 1993. Laila S. Lucila’s daughter. 2004 Decision2 of the Regional Trial Court. Cebu. vs. 2009 Decision1 of the Court of Appeals (CA).R. Cebu City (RTC). Lourdes. Florita. Lucila R.6 dated April 3. The Facts Spouses Luis Rosaroso (Luis) and Honorata Duazo (Honorata) acquired several real properties in Daan Bantayan. Eduardo. Soria (Lucila). 10886 (Lot No. ROSAROSO. as one of the plaintiffs.8 . that Lucila and Laila accomplished this by affixing Luis’ thumb mark on the SPA which purportedly authorized Laila to sell and convey. 10885 (Lot No. DECISION MENDOZA. and Lot Nos. 31852 (Lot No. Arturo. in Civil Case No.R.
it argued that the suit against it was filed in bad faith. the RTC ruled in favor of petitioners. It held that when Luis executed the second deed of sale in favor of Meridian. The trial court stated that although the deed of sale was not registered. deceit and trickery. it countered that before purchasing the properties. The same held true with his alleged sale of Lot 8 to Lucila Soria. personally witnessed Luis affix his thumb mark on the deed of sale in its favor. the subject properties had already been delivered to the vendees who had been living there since birth and so had been in actual possession of the said properties.500.Petitioners further averred that a second sale took place on August 23. In fact. in its Answer with Compulsory Counterclaim.14 Specifically. petitioners were estopped from questioning the Second Sale in favor of Meridian because they failed not only in effecting the necessary transfer of the title.11 Respondent Meridian. Vice-President of the corporation. it was Luis together with his wife who received the check payment issued by Meridian where a big part of it was used to foot his hospital and medical expenses. however. the efficacy of said deed was not destroyed. and litigation expenses and that the two SPAs and the deed of sale in favor of Meridian be declared null and void ab initio. She. In fact. Luis lost his right to dispose of the said properties to Meridian from the time he executed the first deed of sale in favor of petitioners. In fact. but also in annotating their interests on the titles of the questioned properties. Lourdes posited that her signature as well as that of Luis appearing on the deed of sale in favor of petitioners. attorney’s fees. 22 and 23 as he had already sold them to his children by his first marriage. With respect to the Second Sale. With respect to the assailed SPAs and the deed of absolute sale executed by Luis. It was of the view that the actual registration of the deed of sale was not necessary to render a contract valid and effective because where the vendor delivered the possession of the parcel of land to the vendee and no superior rights of third persons had intervened. averred that Luis was fully aware of the conveyances he made. that Meridian was in bad faith when it did not make any inquiry as to who were the occupants and owners of said lots. In fact. they claimed that the documents were valid because he was conscious and of sound mind and body when he executed them. thus. actual damages. he was no longer the owner of Lot Nos. exemplary damages. prayed that they be awarded moral damages. 1994.13 RTC Ruling After the case was submitted for decision. She explained that they signed the prepared deed out of pity because petitioners told them that it was necessary for a loan application. she never encouraged the same and neither did she participate in it. it would have been informed as to the true status of the subject properties and would have desisted in pursuing their acquisition. respondents Lucila and Laila contested the First Sale in favor of petitioners. Finally. this fact was not prejudicial to their interest. In other words. when the respondents made Luis sign the Deed of Absolute Sale9 conveying to Meridian three (3) parcels of residential land for P960. 19. there was no consideration involved in the First Sale.10 On their part.00 (Second Sale). the dispositive portion of the RTC decision reads: . was obtained through fraud. It was purely her husband’s own volition that the Second Sale materialized.12 On her part. affirmed that she received Meridian’s payment on behalf of her husband who was then bedridden. They submitted that even assuming that it was valid. Sophia Sanchez (Sanchez). and that if Meridian had only investigated. As to petitioners’ contention that Meridian acted in bad faith when it did not endeavor to make some inquiries as to the status of the properties in question. it checked the titles of the said lots with the Register of Deeds of Cebu and discovered therein that the First Sale purportedly executed in favor of the plaintiffs was not registered with the said Register of Deeds. Petitioners.
and 23.17 With regard to petitioners’ assertion that the First SPA was revoked by Luis when he executed the affidavit. he was of sound mind when he executed the first SPA. The Second Sale was transacted on August 23.000. they enjoyed the presumption of regularity. the CA stated that it was valid because the documents were notarized and. when the Second Sale was consummated. b. Declaring the Deed of Absolute Sale of Three (3) Parcels of Residential Land marked as Exhibit "F" null and void from the beginning. c. Declaring the Deed of Sale. Thus.000. as such. 1994. Declaring that the Special Power of Attorney. "Meridian had all the reasons to rely on the said SPA during the time of its validity until the time of its actual filing with the Register of Deeds considering that constructive notice of the revocation of the SPA only came into effect upon the filing of the Adverse Claim and the aforementioned Letters addressed to the Register of Deeds on 17 December 1994 and 25 November 1994. before the First SPA was revoked. exclusive and absolute owners and possessors of Lots Nos. 22. In other words. the CA reversed and set aside the RTC decision."15 Ruling of the Court of Appeals On appeal. Arlene Letigio Pesquira. SO ORDERED." for the plaintiffs and Exhibit "3" for the defendants null and void including all transactions subsequent thereto and all proceedings arising therefrom. Declaring the vendees named in the Deed of Sale marked as Exhibit "E" to be the lawful. and P20. the First SPA was still valid and subsisting.00 as attorney’s fees.16 With respect to the validity of the Second Sale. The price or consideration for the sale was simulated to make it appear that payment had been tendered when in fact no payment was made at all. dated November 24." null and void from the beginning. d.00 as moral damages. the CA ruled that the Second Sale remained valid. and g.000. the attending physician of Luis. Exhibit "16" (Solutan) or Exhibit "FF.IN VIEW OF THE FOREGOING. informing the . Dr. 8. respectively. Exhibit "K. f. the Court finds that a preponderance of evidence exists in favor of the plaintiffs and against the defendants. e. It relied on the testimony of Lourdes that petitioners did not pay her husband. Ordering the defendants to pay jointly and severally each plaintiff P50. Declaring the Deed of Sale marked as Exhibit "E" valid and binding. The crossclaim made by defendant Meridian Realty Corporation against defendants Soria and Solutan is ordered dismissed for lack of sufficient evidentiary basis. 19. Ordering the defendants to pay plaintiffs P50. Judgment is hereby rendered: a. 1994. Although petitioners alleged that Luis was manipulated into signing the SPAs. The CA ruled that the first deed of sale in favor of petitioners was void because they failed to prove that they indeed tendered a consideration for the four (4) parcels of land.00 as litigation expenses. the CA opined that evidence was wanting in this regard. testified that while the latter was physically infirmed.
as ineffective and without any force and effect. The Decision dated 30 July 2004 is hereby REVERSED AND SET ASIDE. DECLARING the Special Power of Attorney. The latter being valid.22 dated November 18. THE HONORABLE COURT OF APPEALS (19TH DIVISION) GRAVELY ERRED WHEN IT DECLARED AS VOID THE FIRST SALE EXECUTED BY THE LATE LUIS ROSAROSO IN FAVOR OF HIS CHILDREN OF HIS FIRST MARRIAGE. valid and binding from the very beginning. also valid and binding from the very beginning. 2. the sum of Php50. although Luis revoked the First SPA. its subsequent redemption and its second sale. 5. II. 3.21 Petitioners filed a motion for reconsideration.. convey and mortgage. Consequently."18 Moreover. 2010. 1994. as valid.19 Furthermore. The CA opined that had it been the intention of Luis to discredit the Second Sale. dated 21 July 1993.000. DECLARING the Special Power of Attorney. all transactions emanating from it. the property covered by TCT T-11155 (Lot No.000.Register of Deeds of the revocation of the first SPA.20 Thus. the CA observed that the affidavit revoking the first SPA was also revoked by Luis on December 12. 19). the CA disposed in this wise: WHEREFORE.00 as moral damages. 6. DECLARING the Deed of Absolute sale. dated 23 August 1994. particularly the mortgage of Lot 19.00 as attorney’s fee and Php100. he should have revoked not only the First SPA but also the Second SPA. the appeal is hereby GRANTED.00 as moral damages. DECLARING the Deed of Absolute Sale. but it was denied in the CA Resolution. dated 27 September 1994. and 7. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT SUSTAINING AND AFFIRMING THE RULING OF THE TRIAL COURT DECLARING THE MERIDIAN REALTY . as valid up to the time of its revocation on 24 November 1994. 4. Php100. DECLARING the Deed of Absolute Sale of Three (3) Parcels of Residential Land.000.000. dated 04 November 1991. he did not revoke the Second SPA which authorized respondent Laila to sell. dated 03 April 1993. among others. they filed the present petition with the following ASSIGNMENT OF ERRORS I. ORDERING the substituted plaintiffs to pay jointly and severally the defendant-appellants Leila Solutan et al. were valid. SO ORDERED. and in its stead a new decision is hereby rendered: 1. ORDERING the substituted plaintiffs to pay jointly and severally the defendant-appellant Meridian Realty Corporation the sum of Php100.00 as litigation expenses.
signed the same before him.28 After an assiduous assessment of the records. The First Deed Of Sale Was Valid .23 Petitioners argue that the second deed of sale was null and void because Luis could not have validly transferred the ownership of the subject properties to Meridian. 1991 WAS NO LONGER THE OWNER OF LOTS 8. NULL AND VOID FROM THE VERY BEGINNING SINCE LUIS ROSAROSO ON NOVEMBER 4. He also identified the signatures of the subscribing witnesses.CORPORATION A BUYER IN BAD FAITH. In fact. The fact that there were already houses on the said lots should have put Meridian on its guard and. et al. and TCT No. In order to overthrow a certificate of a notary public to the effect that a grantor executed a certain document and acknowledged the fact of its execution before him. 21 SCRA 207). mere preponderance of evidence will not suffice. Lourdes.. 19. he testified that they indeed paid their father and their payment helped him sustain his daily needs.R. III.24 Thus. Rather. 11155 for Lot 19. 22 AND 23 AS HE HAD EARLIER DISPOSED SAID LOTS IN FAVOR OF THE CHILDREN OF HIS (LUIS ROSAROSO) FIRST MARRIAGE. TCT No.26 Petitioners also assert that Meridian was a buyer in bad faith because when its representative visited the site. 171. petitioners aver that it was erroneous for the CA to say that the records of the case were bereft of evidence that they paid the price of the lots sold to them. The subject titles. a perusal of the records would reveal that during the cross-examination of Antonio Rosaroso. 189-190). G. for said reason.27 Meridian’s assertion that the Second Sale was registered in the Register of Deeds was a falsity. should have made inquiries as to who owned those houses and what their rights were over the same. she did not make the necessary inquiries. complete and conclusive proof of its falsity or nullity on account of some flaw or defect provided against by law (Robinson vs. As such it … must be sustained in full force and effect so long as he who impugns it shall not have presented strong. A notarial document is by law entitled to full faith and credit upon its face.25 Furthermore. when asked if there was a monetary consideration. No. they invoke the finding of the RTC which wrote: In the case of Heirs of Joaquin Teves. 1999. the evidence must (be) so clear. 10885 for Lot 22. Villafuerte. the Supreme Court held that a public document executed [with] all the legal formalities is entitled to a presumption of truth as to the recitals contained therein. the certificate will be upheld x x x . William Boco. DESPITE THE TRIAL COURT’S FINDINGS THAT THE DEED OF SALE (First Sale). the lawyer who notarized the first deed of sale. Ricardo Teves versus Court of Appeals. strong and convincing as to exclude all reasonable dispute as to the falsity of the certificate. No less than Atty. Ner. 109963. 10886 for Lot 23 were free from any annotation of the alleged sale. 18 Phil. (Ramirez vs. When the evidence is conflicting. THE HONORABLE COURT OF APPEALS FURTHER ERRED IN NOT HOLDING THE SALE (DATED 27 SEPTEMBER 1994). the Court finds for the petitioners. IS GENUINE AND HAD FULLY COMPLIED WITH ALL THE LEGAL FORMALITIES. October 13. he being no longer the owner after selling them to his children. appeared and testified in court that the said deed was the one he notarized and that Luis and his second wife. namely: TCT No.
(2) the ordinary course of business has been followed.31 The CA decision ran counter to this established rule regarding disputable presumption. cause the ownership to revest to the seller unless the bilateral contract of sale is first rescinded or resolved pursuant to Article 1191 of the New Civil Code. The burden of proof remains where it is but. in law. will prevail. Aside from their bare allegation that the sale was made without a consideration. and (3) there was sufficient consideration for a contract. if no proof to the contrary is presented and offered. if it should be movable property. the following are disputable presumptions: (1) private transactions have been fair and regular. It is elementary in procedural law that bare allegations. the properties belong to them as they acquired these in good faith and had them first recorded in the Registry of Property. they failed to supply clear and convincing evidence to back up this claim. [Emphases supplied] Meridian is Not a Buyer in Good Faith Respondents Meridian and Lucila argue that. unsubstantiated by evidence. Balatbat v. In case of double sale. are not equivalent to proof under the Rules of Court. . and which. by the presumption. 1544. though. Court Of Appeals and Spouses Jose Repuyan and Aurora Repuyan. It relied heavily on the account of Lourdes who testified that the children of Luis approached him and convinced him to sign the deed of sale. explaining that it was necessary for a loan application. granting that the First Sale was valid. is selfserving and would not amount to a clear and convincing evidence required by law to dispute the said presumption.32 This testimony.29 These presumptions operate against an adversary who has not introduced proof to rebut them. Rule 131 of the Rules of Court.33 it was written: The failure of the buyer to make good the price does not. What they vehemently insist.34 Again. is that the said sale was simulated because the purported sale was made without a valid consideration. His remedy would be to rescind the sale for failure on the part of the buyer to perform his part of their obligation pursuant to Article 1191 of the New Civil Code. Non-payment only creates a right to demand the fulfillment of the obligation or to rescind the contract. as they were unaware of the First Sale. the Court is not persuaded. The fact that Meridian had them first registered will not help its cause. Granting that there was no delivery of the consideration. As such. the presumption that there was sufficient consideration will not be disturbed. however. the ownership shall be transferred to the person who may have first possession thereof in good faith.The fact that the first deed of sale was executed. the seller would have no right to sell again what he no longer owned. was never contested by the respondents. If the same thing should have been sold to different vendees. In the case of Clara M. because the presumption stands in the place of evidence unless rebutted. but they did not pay the purchase price for the subject properties. Article 1544 of the Civil Code provides: ART. They create the necessity of presenting evidence to rebut the prima facie case they created. conveying the subject properties in favor of petitioners. the respondents failed to trounce the said presumption. Under Section 3.30 In this case. the one who has that burden is relieved for the time being from introducing evidence in support of the averment.
provided there is good faith. both made in good faith. A want of caution and diligence. to look and see who is there upon it and what his rights are. ownership of an immovable property which is the subject of a double sale shall be transferred: (1) to the person acquiring it who in good faith first recorded it in the Registry of Property. in the absence thereof. that is. to the person who presents the oldest title.)35 [Emphases and underlining supplied] When a piece of land is in the actual possession of persons other than the seller. When the thing sold twice is an immovable. as in this case. . to the person who presents the oldest title. constitutes gross negligence amounting to bad faith. A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard. The principle of primus tempore. the ownership shall pertain to the person who in good faith was first in possession. the alleged registration they have made amounted to no registration at all. Should there be no inscription. Otherwise stated. Good faith must concur with the registration. and. If it would be shown that a buyer was in bad faith. a want of good faith. Without making such inquiry. other than the vendor.Should it be immovable property. is in contemplation of law. potior jure (first in time. and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. stronger in right) gains greater significance in case of a double sale of immovable property. As we have held: The failure of appellees to take the ordinary precautions which a prudent man would have taken under the circumstances. shall be deemed the owner. the purchaser is required to go beyond the certificate of title to make inquiries concerning the rights of the actual possessor. (Citations omitted). the registrant must have no knowledge of the defect or lack of title of his vendor or must not have been aware of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor. it has been held that where. every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go behind the certificate to determine the condition of the property. visible and public possession of another person. Failure to do so would make him a purchaser in bad faith. which an honest man of ordinary prudence is accustomed to exercise in making purchases. his duty is to read the public manuscript. the land sold is in the possession of a person other than the vendor. one cannot claim that he is a buyer in good faith. the general rule is that a purchaser may be considered a purchaser in good faith when he has examined the latest certificate of title. Verily. (2) in default thereof. it has been said that a person who deliberately ignores a significant fact which would create suspicion in an otherwise reasonable man is not an innocent purchaser for value. the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. to the person who in good faith was first in possession.37 it was written: Verily. Court of Appeals. The buyer who has failed to know or discover that the land sold to him is in adverse possession of another is a buyer in bad faith. specially in buying a piece of land in the actual. the one who acquires it and first records it in the Registry of Property. provided there is good faith. An exception to this rule is when there exist important facts that would create suspicion in an otherwise reasonable man to go beyond the present title and to investigate those that preceded it.36 In the case of Spouses Sarmiento v. The requirement of the law then is two-fold: acquisition in good faith and registration in good faith. In this connection. Thus. Thus. and (3) in default thereof. the act of registration must be coupled with good faith— that is. the buyer must be wary and should investigate the rights of those in possession. When a man proposes to buy or deal with realty.
201 0 Resolution of the Court of Appeals. it chose to just believe that Luis still owned them. defendant Laila Solutan and Corazon Lua. that the lots were pointed to them and she saw that there were houses on it but she did not have any interest of the houses because her interest was on the lots. the registration constitutes a registration in bad faith and does not confer upon him any right. Basic is the rule that the trial court is in a better position to examine real evidence as well as to observe the demeanor of witnesses who testify in the case. In this regard. that one of the titles was mortgaged and she told them to redeem the mortgage because the corporation will buy the property. the president of Meridian Realty Corporation. 00351. CV No. be regarded as a bona fide purchaser as against such possessors. He can scarely. at least make some inquiry concerning the right of those in possession.40 WHEREFORE. representative and witness for Meridian. however. Article 524 of the Civil Code directs that possession may be exercised in one's name or in that of another. it was gross negligence on its part to merely rely on Mr. The actual possession by other than the vendor should. Rosaroso in her favor but she went instead directly to Luis Rosaroso to be sure. the fact that private respondent RRC did not investigate the Sarmiento spouses' claim over the subject land despite its knowledge that Pedro Ogsiner. the encumbrance was cancelled and she told the prospective sellers to prepare the deed of sale. was in actual possession thereof means that it was not an innocent purchaser for value upon said land. and the buyer who has first taken possession of the property in good faith shall be preferred. that he owns the property and that he will sell the same because he is very sickly and he wanted to buy medicines.One who purchases real property which is in the actual possession of another should. [Emphases supplied] In another case. Puzon's assurance that the occupants of the property were mere squatters considering the invaluable information it acquired from Pedro Ogsiner and considering further that it had the means and the opportunity to investigate for itself the accuracy of such information.38 In the case at bench. that there were no encumbrances or liens in the title. that when the deed of absolute sale was prepared it was signed by the vendor Luis Rosaroso in their house in Opra x x x. Pedro Ogsiner had informed RRC that he was occupying the subject land on behalf of the Sarmiento spouses. Being a corporation engaged in the business of buying and selling real estate. it is clear that Meridian. are REVERSED and SET . the petition is GRANTED. Sanchez. in the absence of such inquiry.39 (Underscoring supplied) From the above testimony. at least put the purchaser upon inquiry. (Emphases supplied) Prescinding from the foregoing. Instead of investigating the rights and interests of the persons occupying the said lots. Simply. that the registered owner of the lots was Luis Rosaroso. In herein case. it was held that if a vendee in a double sale registers the sale after he has acquired knowledge of a previous sale. that she requested someone to check the records of the lots in the Register of Deeds. even testified as follows: x x x. that the agents brought with them the three titles of the lots and Laila Solutan brought with her a special power of attorney executed by Luis B. went immediately to site of the lots. 2009 Decision and the November 18. knew that the subject properties were in possession of persons other than the seller. it is as if there is no registration at all. that she together with the two agents.R. The December 4. in CA-G. the fact that the subject properties were already in the possession of persons other than Luis was never disputed. that Luis Rosaroso said that the houses belonged to him. great weight is accorded to the findings of fact of the RTC. If the registration is done in bad faith. that in more or less three months. as their overseer. Meridian Realty failed to exercise the due diligence required by law of purchasers in acquiring a piece of land in the possession of person or persons other than the seller. through its agent.
is hereby REINSTATED. CEB-16957. The July 30.ASIDE. SO ORDERED. . Cebu City. in Civil Case No. 7th Judicial Region. 2004 Decision of the Regional Trial Court. Branch 8.