SPOUSES MARCELIAN AND ALICE TAPAYAN V.

PONCEDA MARTINEZ
Case digested by Delfin, Dick Guiller G.

PRINCIPLES:
 Courts are not precluded to accept in evidence a mere photocopy presented as a
documentary evidence, when no objection was raised when it was formally offered.
 A clear and convincing evidence is necessary to rebut the conclusive presumption of
the due execution of a Deed acknowledged before a notary public.

PARTIES:
Petitioners
- Spouses Marcelian and Alice Tapayan
Respondent
- Ponceda Martinez

FACTS

Respondent is the registered owner of a parcel of land named as Pingol Property in Ozamis
City. Two (2) mortgages were contracted over her property:
1. PNB mortgage – P100K in the name of Respondent
2. DBP mortgage – P1M renewable credit line in the name of Petitioners

As agreed, a portion of the DBP loan was utilized to settle the remaining balance of PNB
loan amounting to P65,320.55. Subsequently, a Deed of Undertaking among the parties was
made.

Based on the Undertaking, the Petitioners shall execute a second mortgage in favor of the
Respondent over their Carangan Property in Ozamis City. Moreover, should the Petitioners
fail pay the DBP loan and the property of the Respondent is foreclosed and is not redeemed
by the Petitioners within 1 year redemption period or in case the loan shall be paid by the
Respondent just to save her property from being foreclosed, the Petitioners shall
acknowledge as his indebtedness the amount due to the DBP upon foreclosure or the
amount paid by the Respondent in paying the loan, but in either case shall be deducted
therefrom the amount of P65,320.55 plus interests and fees paid by the Petitioners to the
PNB in favor of the Respondent’s remaining balance.

The DBP loan was not paid when it fell due.

The Respondent filed a complaint for Specific Performance with Damages against
Petitioners compelling them to constitute a mortgage over their house and lot, the Carangan
Property.

The Petitioners claimed that the Undertaking is a falsity. The DBP loan were used as a
capital for the construction business of petitioner and Respondent’s son in a Joint Venture.

Petitioners’ allegations:
1. The copy of the Deed of Undertaking was inadmissible as proof of its contents.
2. The Deed of Undertaking was a falsity.
3. The petitioners are accommodation borrowers; hence they are not liable but the
alleged Joint Venture.
4. Should the petitioners execute a mortgage of their Carangan Property, it should be
deducted from the amount they paid to PNB mortgage in favor of Respondent.

RTC Decision:
The RTC decided in favor of Respondent and ordered the Petitioner-spouses to execute a
mortgage over their Carangan property in favor of the respondent, unless they reimburse the
respondent for the total amount of P1,180,200.10 paid by her to the DBP for the redemption
of the mortgage plus P20K attorney’s fees.

The RTC noted that the Undertaking was acknowledged before Atty. Emmanuel Chiong who
enjoys the presumption of having performed his duties regularly. Therefore, the alleged
falsity must be rejected as it is valid and binding.

CA Decision:

Affirmed the decision of the RTC.

ISSUES:

Whether or not CA erred in affirming the RTC Decision to execute a mortgage over their
Carangan Property in favor of the respondent.

RULING

I. The Deed of Undertaking was admissible as proof of its contents

The objection of the petitioners over the admission of the Undertaking should not be granted.

Under the law, a proper and timely objection over the documentary evidence presented is
necessary; otherwise, it is deemed waived.

Although Best Evidence Rule requires that the original documents must be produced
whenever its contents are the subject of inquiry, Courts are not precluded to accept in
evidence a mere photocopy of a document when no objection was raised when it was
formally offered. Offer is made after all the witnesses of the party making the offer have
testified, specifying the purpose for which the evidence is being offered. It is only at this time,
and not at any other, that objection to the documentary evidence may be made.

In this case, the Petitioners failed to object to the admission of the plain copy of the Deed of
Undertaking at the time it was formally offered in evidence before the RTC, in fact, they only
raised this objection for the first time before the CA.

Therefore, the Deed of Undertaking was admissible.

II. The Deed of Undertaking was genuine and was duly executed.

The contention of the petitioners that the Deed was a falsity is without merit.

Under the law, a document acknowledged before a notary public is a public document that
enjoys the presumption of regularity. It is a prima facie evidence of the truth of the facts
stated therein and a conclusive presumption of its existence and due execution. To
overcome this presumption, there must be presented evidence that is clear and convincing.

In this case, the petitioners' denials without clear and convincing evidence to support their
claim of fraud and falsity were not sufficient to overthrow the above-mentioned presumption.
They have not even supported their claim that their signatures thereon were forged.

Therefore, the authenticity, due execution and the truth of the facts stated in the "Bilihan ng
Lupa" are upheld.
 III. The petitioners were not accommodation borrowers.

The allegation of the petitioners that they are accommodation borrowers who applied for the
DBP Loan for and on behalf of the Joint Venturers, who should assume the liability, based
on the Joint Affidavit of the Joint Venturers should be denied.

The statements in the Joint Venture were only corroborated by the petitioner’s self-serving
declarations and the Court finds no other evidence on record to support the existence of the
alleged joint venture, and the verbal agreement of the Joint Venturers in respect of the DBP
Loan.

In this case, Petitioners paid the interest on the DBP Loan, insurance premiums, and other
incidental fees without seeking reimbursement from the alleged Joint Venturers, establishing
Petitioners’ benefit.

Therefore, Petitioners must bear the liability and comply the obligations imposed by the
Deed of Undertaking.

IV. The amount paid to PNB must be deducted from Petitioners’ total liability in
accordance with the provisions of the Deed (the only issue which the SC
deviated from the lower courts’ decision).

The Court ordered the petitioners to execute a mortgage over their Carangan Property and
such mortgage should only be made to secure the amount of P1,114,879.55 – the amount
paid by the Respondent to DBP to avert the foreclosure of the DBP Mortgage.

Contrary to the P1,180,200.10 amount directed by the lower courts, the SC reasoned that
the P65,320.55 should be deducted from Petitioners' total liability, representing the
reimbursement they paid to PNB as the remaining balance of the Respondent over the first
mortgage.