BRI November

7/31/2019 BRI November

1/24

CONTRACT: Consent

INA CALILAP-ASMERON,

Petitioner,

- versus -

DEVELOPMENT BANK OF THE

PHILIPPINES, PABLO CRUZ,* TRINIDAD

CABANTOG,** ENI S.P. ATIENZA and

EMERENCIANA CABANTOG,

Respondents.

G.R. No. 157330

Present:

CORONA, C.J., Chairperson,

LEONARDO-DE CASTRO,

BERSAMIN,

DEL CASTILLO, and

VILLARAMA, JR.,JJ.

Promulgated:

November 23, 2011

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

D E C I S I O N

BERSAMIN,J.:

The petitioner challenges the decision promulgated on June 21, 2002, [1] whereby the Court of Appeals

(CA) affirmed the adverse decision rendered by the Regional Trial Court, Branch 11, in Malolos, Bulacan (RTC)

in Civil Case No. 50-M-87 entitled Lina Calilap-Asmeron v. Development Bank of the Philippines, Pablo Cruz,

Trinidad Cabantog, Eni S.P. Atienza, and Emerenciana Cabantog,[2]an action initiated to set aside the defendant

banks rescission of a deed of conditional sale involving foreclosed property, and to annul the subsequent sales of

the property to other persons.
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn1


2/24

Antecedents

On March 17, 1975, the petitioner and her brother Celedonio Calilap constituted a real estate mortgage

over two parcels of land covered by Transfer Certificate of Title (TCT) No. T-164117 and TCT No.T-160929,

both of the Registry of Deeds of Bulacan, to secure the performance of their loan obligation with respondent

Development Bank of the Philippines (DBP).[3] With the principal obligation being ultimately unpaid, DBP

foreclosed the mortgage. The mortgaged parcels of land were then sold to DBP as the highest bidder. The one-

year redemption period expired on September 1, 1981.[4]

As to what thereafter transpired, the petitioner and DBP tendered conflicting versions.

I

Version of Petitioner

The thrust of the petitioners suit is that DBP accorded to her a preferential right to repurchase the property

covered by TCT No. 164117.[5]Her version follows.

In August 1982, the petitioner negotiated with DBP to buy back the property covered by TCT No.

164117 by offering P15,000.00 as downpayment. Her offer was rejected by an executive officer of DBPs

Acquired Assets Department, who required her to pay the full purchase price of P55,500.00 for the property

within ten days.[6] She returned to DBP with the amount, only to be told that DBP would not sell back only one

lot. Being made to believe that the lot covered by TCT No. 164117 would be released after paying two

amortizations for the other lot (TCT No. 160929), however, she signed the deed of conditional sale covering both

lots for the total consideration of P157,000.00.[7]When she later on requested the release of the property under

TCT No. 164117 after paying two quarterly amortizations, DBP did not approve the release. She continued

paying the amortizations until she had paid P40,000.00 in all, at which point she sought again the release of the

lot under TCT No. 164117. DBP still denied her request, warning that it would rescind the contract should her

remaining amortizations be still not paid. On August 7, 1985, DBP rescinded the deed of conditional sale over

her objections.[8]

On November 25, 1987, DBP sold the lot covered by TCT No. 164117 to respondent Pablo Cruz via a

deed of absolute sale.[9]The petitioner consequently filed a complaint for the rescission of the sale to Cruz on
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn11


3/24

January 30, 1987.[10] Notwithstanding their knowledge of her pending suit against Cruz, respondents

Emerenciana Cabantog and Eni S.P. Atienza still bought the property from Cruz. [11] Hence, Cabantog and

Atienza were impleaded as additional defendants by amendment.

II

Version of Respondents

DBP insisted that the petitioners real intention had been to repurchase the two lots on installment basis.

She manifested her real intention to that effect in writing through her letter dated September 14, 1981, thus:

September 14, 1981

DEVELOPMENT BANK OF THE PHIL.Acquired Assests [sic] Department

Makati, Metro Manila

ATTENTION: MR. J.A. SANCHEZ, JR.

Assistant Manager

------------------------------------------------------------

Dear Sir:

I wish to inform your good office that I am interested to reacquire the mortgage properties

consisting of two (2) parcels of land under TCT Nos. T-160929 and T-164117 located atSumapa, Malolos, Bulacan.

I would like to reacquire the above stated properties under installment basis but I am requesting

your goodselves [sic] to extend an extension of time up to the first week of November, 1981 for

my money is coming by that time.

Your kind consideration on the above request is most highly appreciated, I remain.

Very truly yours,

(sgd.)

LINA CALILAP-ASMERONCo-maker[12]

The petitioner also sent a telegram on September 15, 1981,[13]whereby she similarly expressed to DBP

her interest in reacquiring the properties. On November 16, 1981, DBP received another telegram from her,[14]

requesting DBP to put the bidding of the properties on hold. A year later, she sent a letter dated August 31, 1982

to reiterate her intention to repurchase the two properties and to offer to deposit P55,500.00 as initial payment, to
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn16


4/24

wit:

August 31, 1982

The Manager

Acquired Assets Management DepartmentDevelopment Bank of the PhilippinesMakati, Metro Manila

Dear Sir:

This has reference to our former properties consisting of two parcels of land with an

aggregate area of 2,082.5 sq.m. covered by TCT Nos. T-160929 and T-164117 together with all

the improvements erected thereon located at Bo. Sumpang Matanda, Malolos, Bulacan.

I wish to inform you that in view of my intense desire to preserve said properties for our

familys use, I am offering to buy back these properties for P157,000.00, payable on terms,

balance to be paid in five (5) years on the quarterly amortization plan.

This is my last appeal for your assistance in my wish to preserve these properties and

should I fail to consummate the sale, I bind myself to whatever rules and regulations the Bankmay impose with regards to my deposit.

If this offer is acceptable to you, I am willing to deposit the amount of P55,500.00 on or

before September 10, 1982.

May I be advised accordingly?

Thank you.

Very truly yours,

(Sgd.)

LINA CALILAP-ASMERON[15]

The petitioner subsequently made the downpayment on September 10, 1992, [16] and DBP formally

accepted the offer through its letter dated September 14, 1982, stating therein the terms and conditions .[17] Said

terms and conditions, which were later embodied in the deed of conditional sale executed on January 21, 1983,

included one that bound her to pay the first amortization of P7,304.15 three months from the execution of the

deed, and the remaining amortizations to be due and payable every three months thereafter.[18]

DBP presented the duplicate copies of the receipts indicating her timely payment for the first quarterly

amortization; however, she incurred delays in her subsequent installments.[19] She made her last payment

amounting to P4,500.00 on March 12, 1985,[20] leaving five quarterly amortizations unpaid.[21]
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn23


5/24

On January 20, 1986, the petitioner sent a handwritten letter requesting DBP to put on hold any plans of

selling the subject property, viz:

January 20, 1986

Mr. V.M. Macapagal

Executive Officer

Acquired Assets Mgmt. Division

Development Bank of the Philippines

Makati, Metro Manila

Dear Sir:

This is with reference regarding my Sale Acct. No. 617 under the name of my late brother

Celedonio R. Calilap which are located in Sumapa, Malolos, Bulacan.

In connection with these properties, I have already made an arrangement that Im going to

pay my whole obligations through a private financier under your Incentive Plan, whichaccording to my last communication with them it was extended so I have to make an advancenotice of four (4) days before paying so I may know the exact amount.

I wanted it to be formal, so I send [sic] a letter to your good office for the reason that last

January 17, 1986, your appraiser went to our place and made an assessment of my properties.

May I request again to please hold any sale of the said property for Im doing my best to settle

my obligation at the soonest possible time, for sure after a week or two after the snap election.

Thank you very much for your kind consideration and hoping for your help regarding my

request.

Respectfully yours,(sgd.)

LINA CALILAP-ASMERON[22]

DBP replied by its letter dated February 5, 1986,[23] demanding payment of the petitioners remaining

obligation of P121,013.75 in cash, otherwise, it would be constrained to sell the property. She responded via

telegram,[24] informing DBP that she would be arriving on March 4, 1986. The telegram was followed by a

handwritten letter dated March 5, 1986[25] stating her willingness to pay 10% of her outstanding obligations.

On March 12, 1986, DBP demanded the immediate remittance of the promised amount via telegram.[26]

When she did not pay the six quarterly amortizations, DBP rescinded the deed of conditional sale and applied for

a writ of possession on November 17, 1986 in the RTC (Branch 17) in Malolos, Bulacan. Its application for the

writ of possession was granted on November 18, 1986.[27]
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn29


6/24

Ruling of the RTC

Finding the petitioners complaint lacking in merit, the RTC (Branch 11) rendered its decision on

December 28, 1994 dismissing the case.[28] It observed that the stipulations in the deed of conditional sale and

the tenor of the petitioners communications to DBP clearly indicated that she had intended to repurchase both

foreclosed properties, not just the property covered by TCT No. T-164117, thusly:

Lettered as she is, the plaintiff cannot now seek refuge on the excuse that what she intends

to buy was only the property covered by TCT No. T-164117. The contents of her letter to theManager of the Acquired Assets Division of DBP dated August 31, 1982 (Exh. 1 and its

submarkings) and to Asst. Manager J.A. Sanchez of the DBP dated September 14, 1981 (Exh. 2)

clearly demonstrate in unequivocal terms that she intended to reacquire both of her foreclosed

properties. Moreso, the telegrams sent by her (Exhs. 3 & 4) to defendant bank clearly indicates

the same intention.

The aforequoted terms and conditions in the conditional sale which defendant failed to

comply are clear and not susceptible whatsoever to any other interpretation as to the intention of

the contracting parties. It is settled and fundamental that if the terms of the contract are clear and

leave no doubt upon the intention of the contracting parties, the literal meaning of the

stipulations shall control (Art. 1370, Civil Code; Filoil Marketing Corp. vs. IAC GR 67115;

Mercantile Ins. Corp. vs.Ysmael GR 43862; Baliuag Transit Corp. vs. CA GR 80447). In

addition, her subsequent acts of writing DBP and complying with the terms of the conditional

sale bolster the fact of her acquiescence in the said contract which she voluntarily entered intoand she cannot now take a contrary position.[29]

Ruling of the CA

The petitioner appealed, contending that:

ITHE LOWER COURT GROSSLY ERRED IN NOT ANNULLING THE RESCISSION MADE

BY THE DEVELOPMENT BANK OF THE PHILIPPINES (DBP) OF THE CONDITIONAL

SALE OF JANUARY 4, 1983, APPELLANT HAVING ALREADY PAID A SUBSTANTIAL

AMOUNT OF P100,000.00 OR ABOUT TWO-THIRDS OF THE PRICE OR

CONSIDERATION.

II

THE LOWER COURT ERRED IN NOT ANNULLING THE SALE MADE BY DBP TO

PABLO CRUZ AS WELL AS THE SALE MADE BY THE LATTER TO THE OTHER
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn31


7/24

DEFENDANTS.

Yet, on June 21, 2002, the CA affirmed the RTC,[30]pointing out that the petitioner had not presented

testimonial or documentary evidence to support or corroborate her claim that she had been misled into signing

the deed of conditional sale. It ruled that DBP could rescind the contract pursuant to the terms of the deed of

conditional sale itself, and that DBP exercised its right to rescind only after she had failed to pay her quarterly

amortizations.[31]

Issues

In her present appeal, the petitioner submits:

I

THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE

ERROR WHEN IT DISREGARDED THE TESTIMONIAL EVIDENCE ADDUCED BY THE

PETITIONER, WHICH CLEARLY DETAILED THE TRUTH SURROUNDING THE

EXECUTION OF THE DEED OF CONDITIONAL SALE OF THE SUBJECT LOT TO

RESPONDENT CRUZ, AND THE LATTER TO CO-RESPONDENTS CABANTOG AND

ATIENZA NULL AND VOID

II

THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT AFFIRMED

THE DECISION OF THE LOWER COURT UPHOLDING THE RESPONDENT BANKSRESCISSION OF THE DEED OF CONDITIONAL SALE CONSIDERING THAT THE

PETITIONER HAD ALREADY PAID A SUBSTANTIAL AMOUNT OF PHP100,000.00 OR

ABOUT TWO-THIRD OF THE FULL CONSIDERATION OF PHP157,000.00.

The petitioner avers that her testimonial evidence sufficiently established the facts behind the execution of

the deed of conditional sale; that she thereby proved that she had not fully understood the terms contained in the

deed; that DBP could not resort to rescission because her nonpayment of the amortizations was only a slight or

casual breach; and that the sale made by DBP to Cruz was tainted with bad faith, which was also true with the

sale from Cruz to Cabantog and Atienza.

DBP counters that the petitioner is raising questions of fact in her present appeal, which is not allowed

under Rule 45 of theRules of Court; and that it had the right to rescind the deed of conditional sale under Article

1191 of the Civil Code.
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn33


8/24

On her part, Remedios Lim-Cruz, who had substituted her deceased husband, argues that the petitioner did

not prove bad faith on the part of her husband in purchasing the property from DBP; and that her husband had

relied in good faith on the title of DBP as the registered owner of the property at the time of the sale.

Ruling

The appeal lacks merit.

I

Appeal under Rule 45 is

limited to questions of law only

The petitioners submissions, that her testimonial evidence sufficiently established the facts behind the

execution of the deed of conditional sale, and that she had not fully understood the terms contained in the deed

of conditional sale, involved questions of fact, for the consideration and resolution of them would definitely

require the appreciation of evidence. As such, her petition for review is dismissible for raising factual issues.

Under Rule 45 of theRules of Court, only questions of law may be the proper subject of an appeal in this Court.

The version of Section 1 of Rule 45 in force at the time the petitioner commenced her present recourse on April

28, 2003 expressly so stated, to wit:

Section 1. Filing of petition with Supreme Court. A party desiring to appeal by

certiorari from a judgment or final order or resolution of the Court of Appeals, the

Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file

with the Supreme Court a verified petition for review on certiorari. The petition shall raise

only questions of law which must be distinctly set forth. (1a, 2a) (emphasis supplied)[32]

To be sure, we have not lacked in reminding that in exercising its power of review the Court is not a trier

of facts and does not normally undertake the re-examination of the evidence presented by the contending parties

during the trial of the case. For that reason, the findings of facts of the CA are conclusive and binding on the

Court.
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn34http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn34


9/24

It is true that the Court has recognized several exceptions, in which it has undertaken the review and re-

appreciation of the evidence. Among the exceptions have been: (a) when the findings of the CA are grounded

entirely on speculation, surmises or conjectures; (b) when the inference made by the CA is manifestly mistaken,

absurd or impossible; (c) when there is grave abuse of discretion on the part of the CA; (d) when the judgment of

the CA is based on a misapprehension of facts; (e) when the findings of facts of the CA are conflicting; (f) when

the CA, in making its findings, went beyond the issues of the case, or its findings are contrary to the admissions

of both the appellant and the appellee; (g) when the findings of the CA are contrary to those of the trial court; (h)

when the findings of the CA are conclusions without citation of specific evidence on which they are based; (i)

when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the

respondent; (j) when the findings of fact of the CA are premised on the supposed absence of evidence and

contradicted by the evidence on record; and (k) when the CA manifestly overlooked certain relevant facts not

disputed by the parties, which, if properly considered, would justify a different conclusion.[33]

Although the petitioner submits that the CA made findings of fact not supported by the evidence on

record, this case does not fall under any of the recognized exceptions. Her claim that she had established the

circumstances to prove her having been misled into signing the deed of conditional sale was unfounded, for the

findings of fact of the CA rested on the records, as the following excerpt from the assailed decision of the CA

indicates:

Appellant would like this Court to believe that she was misled by appellee DBPs

representatives into signing the Deed of Conditional Sale even if her original intention was to

buy back only one of the properties, i.e., that which was covered by TCT No. T-164117.

However, a closer scrutiny of the evidence on record reveals that aside from her bareallegations as to the circumstances leading to the signing of said Deed of Conditional Sale,

the appellant has not presented other evidence, testimonial or documentary, to support or

corroborate her claims. On the other hand, appellee DBP has presented the letter dated August

31, 1982 signed by appellant herself and addressed to the Manager of the Acquired Assets

Management Department of the appellee DBP, expressing her intentions to buy back her

foreclosed properties. In fact, she offered therein to pay a total of P157,000.00 for the twoproperties with P55,500.00 to be advanced by her as deposit and the balance to be paid in

five (5) years under a quarterly amortization plan. Said letter has not been categorically

denied by the appellant as during her testimony she merely feigned any recollections of its

content. Moreover, it is well-settled that bad faith cannot be presumed and must be established

by clear and convincing evidence.[34] (emphasis supplied)

The petitioner apparently relied solely on her bare testimony to establish her allegation of having been

misled, and did not present other evidence for the purpose. She seemingly forgot that, firstly, her bare allegation

of having been misled was not tantamount to proof, and that, secondly, she, as the party alleging a disputed fact,

carried the burden of proving her allegation.[35] In other words, her main duty was to establish her allegation by

preponderance of evidence, because her failure to do so would result in her defeat.[36] Alas, she did not
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn36http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn36http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn38


10/24

discharge her burden.

On the other hand, the records contained clear indicia of her real intention vis--vis her reacquisition of

the two foreclosed properties. The letters and telegrams she had dispatched to DBP expressed the singular

intention to repurchase both lots, not just the one covered by TCT No. 164711. That intention even became more

evident and more definite when she set down the payment terms for the repurchase of both lots in her letter of

August 31, 1982. Given all these, the CA rightly concluded that her written communications to DBP had

revealed her earnest desire to re-acquire both foreclosed properties.

II

Article 1332 of the Civil Code

did not apply to the petitioner

The petitioner would have us consider that she had not given her full consent to the deed of conditional

sale on account of her lack of legal and technical knowledge. In effect, she pleads for the application of Article

1332 of the Civil Code, which provides:

Article 1332. When one of the parties is unable to read, or if the contract is in a language not

understood by him, and mistake or fraud is alleged, the person enforcing the contract must show

that the terms thereof have been fully explained to the former.

We cannot accede to the petitioners plea.

The pertinent terms of the deed of conditional sale read:

NOW THEREFORE for and in consideration of the foregoing premises and for the total

sum of ONE HUNDRED FIFTY SEVEN THOUSAND PESOS (P157,000.00), Philippine

Currency, to be fully paid as hereinafter set forth, the VENDOR agrees to convey by way of sale

and the VENDEE agrees to buy the above stated properties covered by TCT Nos. T-160929 andT-164117, more particularly described at the back hereof under the following terms and

conditions:

That the downpayment shall be P55,500 and the balance of P101,500 to be paid

in five (5) years on the quarterly amortization plan at 15% interest per annum the first


11/24

amortization of P7,304.15 shall be due and payable 3 mos. from the date of execution

of the Deed of Conditional Sale and all subsequent amortizations shall be due and

payable every three (3) months thereafter;

That if the vendee fails to sign the sale document within 15 days from date of

receipt of our notice of approval of the offer, the approval hereof shall be deemed

automatically revoked and the deposit forfeited in accordance with the rules and

regulations of the Bank.

The Vendee/s may pay the whole or part of the account under this contract at

anytime during the term hereof; provided, however, that if the vendee/s is in default in

the payment of at least six monthly amortizations, if payable monthly; two quarterly

amortizations, if payable quarterly; one semi-annual and annual amortization ifpayable semi-annually and annually, the Vendor may, in its option, declare the whole

account due and payable.

xxx

The title to the real estate property and all improvements thereon shall remain in

the name of the vendor until after the purchase price, advances and interest shall have

been fully paid. The Vendee/s agrees that in the event of his failure to pay the

amortizations or installments as herein provided for, the contract shall, at the option ofthe Vendor, be deemed and considered annulled, and he shall forfeit, and by these

presents, hereby waives whatever right he might have acquired to the said property.

The Vendor shall then be at liberty to dispose of same as if this contract has never

been made; and in the event of such annulment, all sums of money paid under the

contract shall be considered and treated as rentals for the use of the property, and the

Vendee/s waives all rights to ask or demand the return thereof and he further agrees to

vacate peacefully and quietly said property, hereby waiving in favor of the Vendor

whatever expenses he may have incurred in the property in the form of improvement

or under any concept, without any right to reimbursement whatsoever.

xxx

It is hereby agreed, covenanted and stipulated by and between the parties hereto

that should the Vendor decide to rescind this contract in view of the failure of theVendee/s to pay the amortization/installments, when due, or otherwise fail/s to comply

with any of the terms and conditions herein stipulated, and the Vendee/s refuse/s to

peacefully deliver the possession of the property hereinbove mentioned to the Vendor,

thereby obliging the Vendor to file suit in court with the view to taking possession

thereof, the Vendee/s hereby agree/s to pay all the expenses of the suit incident

thereto, all the damages that may be incurred thereby, as well as attorneys fees which

it is hereby agreed, shall be 10% of the total amount due and outstanding, but in no

case shall it be less than P100.00.[37]

It is quite notable that the petitioner did not specify which of the stipulations of the deed of conditionalsale she had difficulty or deficiency in understanding. Her generalized averment of having been misled should,

therefore, be brushed aside as nothing but a last attempt to salvage a hopeless position. Our impression is that the

stipulations of the deed of conditional sale were simply worded and plain enough for even one with a slight

knowledge of English to easily understand.
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn39


12/24

The petitioner was not illiterate. She had appeared to the trial court to be educated, its cogent

observation of her as lettered (supra, at p. 7 hereof) being based on how she had composed her

correspondences to DBP. Her testimony also revealed that she had no difficulty understanding English, as the

following excerpt shows:

ATTY. CUISON

Q : Mrs. Witness, last time you identified the document, captioned as Deed of Conditional

Sale which was executed last January 21, 1983, it was read in English language,

correct?

A : Yes, sir.

Q : And, could you testify in this Court without in need of interpreter?

A : Yes, sir.

Q : So, you are aware or comfortable with the English language?

A : Yes, sir.[38]

Nor was the petitioners ignorance of the true nature of the deed of conditional sale probably true. By her

own admission, she had asked the bank officer why she had been made to sign a deed of conditional sale instead

of an absolute sale, which in itself reflected her full discernment of the matters subject of her dealings with DBP,

to wit:

COURT:

Q : Now, before you signed this Deed of Conditional Sale sometime on January 21,

1983, did you read this document?

A : Yes, your Honor, and I even told the officer of the Bank, that why it should be a

Deed of Probitional Sale when in fact it should be a Deed of Absolute Sale because I

paid already the full amount of P55,500.00 for the property covered by TCT No.

164117 and they told me that after a few amortizations on the other property, they are

going to release the property which was paid in full but did not push through, Your

Honor.[39]

Thereby revealed was her distinctive ability to understand written andspoken English, the language in which the

terms of the contract she signed had been written.

Clearly, Article 1332 of the Civil Code does not apply to the petitioner. According to Lim v. Court of

Appeals,[40] the provision came into being because a sizeable percentage of the countrys populace had

comprised of illiterates, and the documents at the time had been written either in English or Spanish, viz:
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn40http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn41http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn41http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn42http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn40http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn41http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn42


13/24

In calibrating the credibility of the witnesses on this issue, we take our mandate from

Article 1332 of the Civil Code which provides: When one of the parties is unable to read, or if

the contract is in a language not understood by him, and mistake or fraud is alleged, the person

enforcing the contract must show that the terms thereof have been fully explained to the former.

This substantive law came into being due to the finding of the Code Commission that there

is still a fairly large number of illiterates in this country, and documents are usually drawnup in English or Spanish. It is also in accord with our state policy of promoting social

justice. It also supplements Article 24 of the Civil Code which calls on court to be vigilant

in the protection of the rights of those who are disadvantaged in life.[41] (Emphasis

supplied)

III

DBP validly exercised its right to rescind the

deed of conditional sale upon the petitioners default

The petitioner argues that despite the right to rescind due to nonpayment being stipulated in the deed of

conditional sale, DBP could not exercise its right because her nonpayment of an obligation constituted only a

slight or casual breach that did not warrant rescission. Moreover, she posits that Article 1191[42] of the Civil

Code empowers the court to fix the period within which the obligor may comply with the obligation.

The petitioners argument lacks persuasion.

Firstly, a contract is the law between the parties. Absent any allegation and proof that the contract is

contrary to law, morals, good customs, public order or public policy, it should be complied with in good faith.

[43] As such, the petitioner, being one of the parties in the deed of conditional sale, could not be allowed to

conveniently renounce the stipulations that she had knowingly and freely agreed to.

Secondly, the issue of whether or not DBP validly exercised the right to rescind is a factual one that the

RTC and the CA already passed upon and determined. The Court, which is not a trier of facts, adopts their

findings, and sustains the exercise by DBP of its right to rescind following the petitioners failure to pay her six

monthly amortizations, and after her being given due notice of the notarial rescission. [44] As a consequence of

the valid rescission, DBP had the legal right to thereafter sell the property to a person other than the petitioner,

like Cruz. In turn, Cruz could validly sell the property to Cabantog and Trinidad, which he did.
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn43http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn44http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn45http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn46http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn46http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn43http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn44http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn45http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn46


14/24

And, thirdly, Article 1191 of the Civil Code did not prohibit the parties from entering into an agreement

whereby a violation of the terms of the contract would result to its cancellation. In Pangilinan v. Court of

Appeals,[45]the Court upheld the vendors right in a contract to sell to extrajudicially cancel the contract upon

failure of the vendee to pay the installments and even to retain the sums already paid, holding:

[Article 1191 of the Civil Code] makes it available to the injured party alternative remedies

such as the power to rescind or enforce fulfillment of the contract, with damages in either case if

the obligor does not comply with what is incumbent upon him. There is nothing in this law

which prohibits the parties from entering into an agreement that a violation of the terms of

the contract would cause its cancellation even without court intervention. The rationale

for the foregoing is that in contracts providing for automatic revocation, judicial

intervention is necessary not for purposes of obtaining a judicial declaration rescinding a

contract already deemed rescinded by virtue of an agreement providing for rescission even

without judicial intervention, but in order to determine whether or not the rescission was

proper. Where such propriety is sustained, the decision of the court will be merelydeclaratory of the revocation, but it is not itself the revocatory act. Moreover, the vendors

right in contracts to sell with reserved title to extrajudicially cancel the sale upon failure of

the vendee to pay the stipulated installments and retain the sums and installments already

received has long been recognized by the well-established doctrine of 39 years standing.

The validity of the stipulation in the contract providing for automatic rescission upon non-

payment cannot be doubted.It is in the nature of an agreement granting a party the right

to rescind a contract unilaterally in case ofbreach without need of going to court. Thus,

rescission under Article 1191 was inevitable due to petitioners failure to pay the stipulated

price within the original period fixed in the agreement.

ACCORDINGLY, the petition for review is DENIED for lack of merit, and the decision of the Court of

Appeals promulgated on June 21, 2002 is AFFIRMED.

Costs of suit shall be paid by the petitioner.

SO ORDERED.
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn47http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn47http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/157330.htm#_ftn47


15/24


16/24

CONTRACT: Void Contract; Forge Signature

VICENTE MANZANO, JR.,

Petitioner,

- versus -

MARCELINO GARCIA,

Respondent.

G.R. No. 179323

Present:

CORONA, C.J.,

Chairperson,LEONARDO-DE CASTRO,

BERSAMIN,

DEL CASTILLO, and

VILLARAMA, JR.,JJ.

Promulgated:

November 28, 2011

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

D E C I S I O N

LEONARDO-DE CASTRO,J.:

This is a Petition for Review on Certiorari seeking the reversal of the Decision[1] of the Court of

Appeals in CA-G.R. CV No. 55408 dated September 26, 2006 and its Resolution[2] dated August 9, 2007,

denying the Motion for Reconsideration.


17/24

This case involves a parcel of land covered by Transfer Certificate of Title (TCT) No. T-25464, issued in

the name of respondent Marcelino D. Garcia (Garcia). The subject parcel of land has an area of six thousand

nine hundred fifty-one (6,951) square meters and is located in Balonguis, Balulang, Cagayan de Oro City.[3]

The above property was the subject of a deed ofpacto de retro sale dated May 26, 1992 allegedly

executed by Garcia in favor of Constancio Manzano, the predecessor-in-interest and brother of petitioner Vicente

Manzano, Jr. (Vicente) for the amount of eighty thousand five hundred pesos (P80,500.00). Under said contract,

Garcia purportedly reserved the right to repurchase the subject property for the same price within three months

from the date of the instrument.[4]

On July 12, 1992, Constancio Manzano passed away. His properties, including the subject of this case,

were adjudicated to his heirs by virtue of a deed of extrajudicial partition with special power of attorney

executed by them. Vicente was named the administrator of the intestate estate of Constancio Manzano.[5]

Garcia did not redeem the subject property within the three-month period. Consequently, Vicente

instituted a petition for consolidation of ownership over the property,[6] docketed as Civil Case No. 93-610.

Garcia filed an opposition and answer, alleging that the document evidencing the pacto de retro sale was a

forgery. He claimed that he and his wife were in the United States of America (USA) from June 1, 1988 to

November 14, 1992, and therefore could not have possibly executed the said pacto de retro sale on May 26,

1992.[7]

On February 15, 1994, Garcia filed a complaint for annulment ofpactode retro sale and recovery of

the owners title with preliminary injunction against Vicente. The case was docketed as Civil Case No. 94-

097. In his complaint, Garcia reiterated that he and his wife never participated in the execution of the alleged

deed ofpacto de retro sale dated May 26, 1992 and that in fact, they were still in possession of the said property.

He further alleged that he came to know the existence of said document only when the counsel of Vicente sent

him a letter on January 18, 1993 demanding that he should repurchase the property pursuant to the purported

terms of the pacto de retro sale within fifteen days from receipt of said letter. Upon further inquiry, he

discovered that a certain Mr. P. Pacot had executed the questioned document by misrepresenting himself as

Marcelino G. Garcia (bearing the wrong middle initial) who resided in Casinglot, Misamis Oriental, as

evidenced by the Residence Certificate used in the acknowledgement page of thepacto de retro sale.[8]
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn8


18/24

Vicentes petition for consolidation of ownership over the property (Civil Case No. 93-610) and Garcias

action for annulment ofpactode retro sale and recovery of the owners title with preliminary injunction (Civil

Case No. 94-097) were consolidated before the trial court.[9]

During the trial, Vicente presented TCT No. T-25464 and Tax Declaration No. 41672 to prove the due

execution of the pacto de retro sale, which was recorded in the office of the Register of Deeds of Cagayan de

Oro City.

On the other hand, Garcia testified that he went to the USA on November 7, 1987. A few months later,

he returned to the Philippines. He went back to the USA on June 1, 1988. His three children were left in the

Philippines, while the titles to his properties were left in the office of his business establishment in Tablon,

Cagayan de Oro City with two of their children. Garcia testified that the signatures appearing in the pacto de

retro sale were not his and his wifes. He presented his passport and drivers license, both of which bear an

entirely different signature than what appeared in thepacto de retro sale document.[10]

Atty. Demosthenes Mediante, Jr. (Atty. Mediante), the person who notarized the deed of conveyance in

question, testified that the Marcelino Garcia who appeared in his office and who executed the pacto de retro sale

is not the same Marcelino Garcia who was in court during the trial of the case.[11]

Perla Babano, one of the witnesses to the execution of the pacto de retro sale, likewise testified that the

person who introduced himself as Marcelino G. Garcia and signed the document on May 26, 1992 is not the

same Marcelino Garcia who was in court during the trial of the case.[12]

On August 30, 1996, the trial court rendered its Decision on the consolidated cases in favor of Vicente,

disposing of the same as follows:

WHEREFORE, in view of the foregoing, Civil Case No. 94-097, is hereby dismissed

and declaring the Deed of Pacto de Retro Sale legal and valid, and granting the prayer of

petitioner in Civil Case No. 93-610 to consolidate ownership of the land in favor of Vicente

Manzano, Jr. representing the heirs of Constancio Manzano, namely: Felix, Andrea, Maxima,

Ramon and Marciana, all surnamed Manzano, for all legal purposes. No costs.[13]

The trial court held that Garcia failed to prove that his signature in the pacto de retro sale was forged.
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn13


19/24

According to the court, Garcia should have presented an expert witness to determine whether the signatures were

made by the same person. The trial court doubted the testimonies of Atty. Mediante (the notary public) and

Babano (one of the witnesses to thepacto de retro sale). The court noted the admission of Atty. Mediante that he

notarizes around 25 to 30 documents per month and could not describe or remember all the persons appearing

before him for notarization. The court was likewise intrigued by the testimony of Atty. Mediante that he had

seen the alleged impostor Marcelino Garcia sitting at the Cagayan de Oro Divisoria for two weeks. As regards

Babano, the trial court found it unnatural for an impersonator to show her, a stranger, documents such as the title

to the subject property. Also, the trial court found the low price paid for the property insignificant considering

that the vendor had the right to repurchase the property within three months from the sale.

Garcia sought recourse with the Court of Appeals. The appeal was docketed as CA-G.R. CV No. 55408

and was raffled to the Court of Appeals twenty-third division in Cagayan de Oro City. On September 26, 2006,

the appellate court rendered the assailed decision reversing that of the trial court. The dispositive portion of thedecision read:

FOR THE REASONS STATED, We REVERSE and SET ASIDE the assailed

decision of the Regional Trial Court. In its place, judgment is hereby rendered declaring the

pacto de retro sale executed on May 26, 1992, VOID AB INITIO and dismissing Civil Case

No. 93-610.

Furthermore, Appellee Vicente Manzano, Jr., is ordered to RETURN the ownersduplicate copy of TCT No. T-25464 to Appellant Marcelino D. Garcia. Entry No. 164181

annotated at the back of the said title is hereby ordered cancelled.[14]

According to the Court of Appeals, there is no rule requiring expert testimony to determine the

genuineness of a signature appearing on a document. Since it was plainly obvious from the evidence on record

that the signature appearing on thepacto de retro sale is far different from the customary signature of Garcia that

appeared in his passport and drivers license, the testimony of Garcia that the signature was not his is sufficient

evidence of the forgery pursuant to Section 50, Rule 130[15] of the Rules of Court. The Court of Appeals added

that on the basis of Atty. Mediantes testimony, the presumption of regularity in the execution of the public

document has been sufficiently destroyed and overcome. The Court of Appeals concluded that thepacto de retro

sale is void ab initio pursuant to Article 1409 in relation to Article 1505 of the Civil Code.

Hence, Vicente is now before this Court with the following assignment of errors:

I. THAT THE COURT OF APPEALS ERRED WHEN IT DECLARED THAT


20/24

RESPONDENT AND HIS WIFE BEING IN THE UNITED STATES, COULD HAVE

NOT EXECUTED THE DEED OF PACTO DE RETRO SALE.

II. THAT THE COURT OF APPEALS ERRED WHEN IT DECLARED, THAT

WHEN THE QUESTIONED SIGNATURES APPEAR OBVIOUSLY FAR

DIFFERENT FROM THE CUSTOMARY OR STANDARD SIGNATURES OF THE

PERSON CLAIMING FORGERY, THERE IS NO NEED OF A HANDWRITING

EXPERT TO DETERMINE WHICH DOCUMENT IS FORGED.

III. THAT THE COURT OF APPEALS ERRED IN HASTILY CONSIDERING THAT

RESPONDENT PROVED BY CLEAR, POSITIVE AND CONVINCING EVIDENCE

THE FORGERY OF HIS SIGNATURE AND OF HIS WIFE, ON THE GROUND OF

THEIR NON-PARTICIPATION IN THE EXECUTION OF THE DEED OF PACTO DE

RETRO SALE AND OF THE VARIANCE OF THE STROKES OF THE

SIGNATURES THEREON WHEN COMPARED TO THE STROKES APPEARING IN

THEIR GENUINE, CUSTOMARY AND STANDARD SIGNATURES FOUND IN

OTHER DOCUMENTS.[16]

From an assiduous examination of the records of the case, it is plainly apparent to this Court that the

alleged signature of Garcia in thepacto de retro sale is utterly dissimilar from his customary signature appearing

in the evidence on record, as well as in the verifications of the pleadings before this Court and the courts a quo.

From this circumstance alone, we are constrained to affirm the ruling of the Court of Appeals finding that the

pacto de retro sale was forged and, therefore, void ab initio.

In assailing the finding of the Court of Appeals that the signature of Garcia in thepacto de retro sale was

forged, Vicente echoes the opinion of the trial court that Garcia should have presented an expert witness to prove

the same. Jurisprudence, however, is replete with instances wherein this Court dispensed with the testimony of

expert witnesses to prove forgeries. Thus, inEstacio v. Jaranilla, [17]we held:

It bears stressing that the trial court may validly determine forgery from its own

independent examination of the documentary evidence at hand. This the trial court judge can do

without necessarily resorting to experts, especially when the question involved is mere

handwriting similarity or dissimilarity, which can be determined by a visual comparison of

specimen of the questioned signatures with those of the currently existing ones. Section 22 ofRule 132 of the Rules of Court explicitly authorizes the court, by itself, to make a comparison of

the disputed handwriting with writings admitted or treated as genuine by the party against

whom the evidence is offered, or proved to be genuine to the satisfaction of the judge.[18]

Similarly, in the fairly recent case ofPontaoe v. Pontaoe, [19]this Court held:
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn19


21/24

As to the argument that handwriting experts should have been employed, handwriting

experts are usually helpful in the examination of forged documents because of the technical

procedure involved in analyzing them, but resort to these experts is not mandatory or

indispensable to the examination or the comparison of handwritings. A finding of forgery does

not depend entirely on the testimonies of handwriting experts, because the judge must conduct

an examination of the questioned signature in order to arrive at a reasonable conclusion as to its

authenticity. The opinions of handwriting experts are not binding upon courts, especially when

the question involved is mere handwriting similarity or dissimilarity, which can be determinedby a visual comparison of specimens of the questioned signatures with those of the currently

existing ones. Moreover, Section 22 of Rule 132 of the Rules of Court likewise explicitly

authorizes the court, by itself, to make a comparison of the disputed handwriting with writings

admitted or treated as genuine by the party against whom the evidence is offered, or proved to

be genuine to the satisfaction of the judge.[20]

Insisting on the need to present an expert witness, Vicente points out our ruling inRivera v. Turiano,[21]

wherein we declared:

While it is true that the testimonies of handwriting experts are not necessary, however,

pursuant to the criteria enunciated in Ladignon, the private respondent must not only show

material differences between or among the signatures. In addition, (1) he must demonstrate the

extent, kind, and significance of the variation; (2) he must prove that the variation is due to the

operation of a different personality and not merely an expected and inevitable variation found in

the genuine writing of the same writer; and (3) he must show that the resemblance is a result of a

more or less skillful imitation and not merely a habitual and characteristic resemblance which

naturally appears in a genuine writing.[22]

In the case at bar, however, the variance in the alleged signature of Garcia in the pacto de retro sale, on

one hand, and in the evidence on record and in the verifications of the pleadings before this Court and the courts

a quo, on the other hand, was enormous and obvious, such that this Court can readily conclude that thepacto de

retro sale was in all likelihood made by someone who has not even seen the customary signature of Garcia.

Furthermore, the falsity of the signature on thepacto de retro sale was affirmed by two persons present

when the instrument was signed, one of which is the very person who notarized the same. An examination of

their testimonies reveals that the trial court had disregarded their statements for very flimsy reasons.

The trial court was unconvinced by the testimony of the notary public Atty. Mediante on account of his

admission that he could not describe or remember all the persons appearing before him for notarization and his

statement that he had seen the alleged impostor Marcelino Garcia sitting at the Cagayan de Oro Divisoria for two

weeks. The trial court found it incredulous that Atty. Mediante could have been observing the whereabouts of

the alleged impostor for two weeks.[23] These circumstances, however, were clearly explained by Atty.
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn23


22/24

Mediante, who testified that two weeks prior to the signing of the document, he had been approached by the

impostor Marcelino Garcia who was asking for help to secure a loan of P200,000.00 using his title as collateral.

Atty. Mediante informed the impostor Garcia that his client, Tony Uy, had already stopped lending. It was after

this event, and before the signing of the pacto de retro sale that Atty. Mediante observed the impostor Garcia in

Divisoria. Certainly, while Atty. Mediante could not remember all of the parties in the 25 to 30 documents he

notarized every month, he would remember the person who asked him to broker a loan for P200,000.00 and

would probably recognize said person when he encountered him every now and then in a public place.

As regards Babano, the trial court found it unbelievable that an impersonator would show a stranger

important documents such as the title to a property. We disagree with this observation. On the contrary, this

Court is of the opinion that it would be highly suspicious for such an impersonator to withhold the title of the

property being sold from a person signing as a witness to the sale. It was precisely the presentation of the title

that would convince others that the impostor was the owner of the real property involved in the sale.

Neither did it escape this Courts attention that the person who signed the pacto de retro sale used a

residence certificate with the wrong middle initial of respondent Garcia. As the respondents full name is

Marcelino de Claro Garcia, his middle initial should be either D or C. It surely causes doubt when a person

does not know his own middle initial.

All things considered, Garcias statement that he and his wife could have easily paid the P80,500.00

but refused in principle to pay an account that is not theirs[24] is certainly believable. It is difficult to conceive

that Garcia would sell their 6,951-square meter land at the heart of the city of Cagayan de Oro for only

P80,500.00 (or P11.58 per square meter). Garcia estimates the value of the property at P4.5 million. While

Garcia failed to present evidence on such market value in 1992, it can be ascertained that it is worth at least more

than the P170,000.00 mortgage to China Banking Corporation which had been previously annotated and

subsequently cancelled at the back of the title of the property.[25] If the property could be mortgaged to a bank

for P170,000.00, it is unlikely that a person needing money would instead opt to sell the same for a much smaller

amount.

Petitioner likewise argues that the Court of Appeals erred in failing to appreciate that the notarized deed

ofpacto de retro sale was entitled to the presumption of regularity and should be given great weight. It is settled

that while a notarized document enjoys this presumption, the fact that a deed is notarized is not a guarantee of

the validity of its contents.[26] The presumption of regularity of notarized documents is not absolute and may
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn26


23/24

be rebutted by clear and convincing evidence to the contrary.[27]

Irregularities in the notarization of the document may be established by oral evidence of persons present

in said proceeding. Thus, inEulogio v. Apeles,[28] where the party insisting on the presumption of regularity of

a notarized deed of sale admitted that the same was notarized without his presence, this Court held that such

fact alone overcomes the presumption of regularity, since a notary public is enjoined not to notarize a document

unless the persons who signed the same are the very same persons who executed and personally appeared before

the said notary public to attest to the contents and truth of what are stated therein. [29] In the case at bar, even

more convincing evidence of the irregularity was presented as it was the notary public himself who testified that

the person who appeared before him was not respondent Garcia. Since the very official who attested to the

crucial facts in the notarization i.e., that the persons who personally appeared before him are the same persons

who executed the deed of conveyance admitted in open court the falsity of said manifestation, the reliability of

the Acknowledgment that clothes the document with a presumption of regularity is completely shattered. We,therefore, agree with the Court of Appeals that the presumption of regularity of the notarized deed ofpacto de

retro sale was sufficiently overcome by the testimony of Atty. Mediante.

At this point, however, we should clarify that the proper basis for the nullity of the forged pacto de retro

sale is not Article 1409[30](which enumerates examples of void contracts) in relation to Article 1505[31] (which

refers to an unenforceable contract and is applicable only to goods) of the Civil Code as stated by the Court of

Appeals, but Article 1318 of the Civil Code, which enumerates the essential requisites of a valid contract:

Article 1318. There is no contract unless the following requisites concur:

(1) Consent of the contracting parties;

(2) Object certain which is the subject matter of the contract;

(3) Cause of the obligation which is established.

There are two types of void contracts: (1) those where one of the essential requisites of a valid contract

as provided for by Article 1318 of the Civil Code is totally wanting; and (2) those declared to be so under Article

1409 of the Civil Code.[32] [C]onveyances by virtue of a forged signature x x x are void ab initio. The

absence of the essential [requisites] of consent and cause or consideration in these cases rendered the contract

inexistent. x x x.[33]
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/179323.htm#_ftn33


24/24

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No.

55408 dated September 26, 2006 and its Resolution dated August 9, 2007 are hereby AFFIRMED.

SO ORDERED.

BRI November

Documents

Transcript of BRI November