Spouses Rongavilla v. Court of Appeals
REITERATIONFacts
The Antecedents: Private respondents, Mercedes and Florencia de la Cruz, elderly sisters and embroiderers/dressmakers, owned a parcel of land. They borrowed P2,000.00 from petitioners, spouses Narciso and Dolores Rongavilla (Dolores being their niece), for roof repairs. Later, Dolores and her sister Juanita Jimenez visited the respondents and presented a document in English, claiming it was merely to acknowledge the P2,000.00 debt. Relying on this representation, the respondents signed the document. Over four years later, petitioners demanded the respondents vacate the property, claiming ownership. Respondents discovered their title had been cancelled and a new one issued in petitioners' names, who had subsequently mortgaged the property for P40,000.00. Respondents filed a complaint to declare the deed of sale void and inexistent due to fraud and misrepresentation, alleging they never sold the land and received no consideration. Procedural History: The Regional Trial Court (RTC) of Pasay City declared the Deed of Absolute Sale void and inexistent, ordered reconveyance of the property, and awarded attorney's fees and costs. The Court of Appeals (CA) affirmed the RTC judgment in toto. Petitioners appealed to the Supreme Court. The Petition: Petitioners sought reversal of the CA decision, arguing the CA erred in declaring the deed void and inexistent, in holding the action to annul did not prescribe, in relying on an unoffered BIR certificate, and in ordering reconveyance.
Issue(s)
Whether the Deed of Absolute Sale dated June 3, 1976, is void and inexistent. Whether the action to declare the nullity of the Deed of Absolute Sale has prescribed. Whether the Court of Appeals committed grave abuse of discretion in relying on a purported Bureau of Internal Revenue Certificate not offered in evidence. Whether the Court of Appeals committed grave error in ordering the reconveyance of the subject parcel of land.
Ruling
The petition is denied, and the Decision and Resolution of the Court of Appeals are affirmed. The Deed of Absolute Sale dated June 3, 1976, is declared void and inexistent. The action to declare its nullity is imprescriptible. Petitioners are ordered to reconvey the property to the private respondents.
Ratio Decidendi
On the issue of the Deed of Absolute Sale being void and inexistent: The Court affirmed the findings of the lower courts that the deed of sale was void ab initio due to lack of consent and consideration. The private respondents, being elderly and unschooled in English, were misled by petitioner Dolores Rongavilla and her sister Juanita Jimenez into believing the document was merely an acknowledgment of a P2,000.00 debt for roof repairs, when it was actually a deed of sale. Their signatures were obtained through fraud and misrepresentation. Furthermore, the consideration stated in the deed (P2,000.00) was grossly inadequate and unconscionable compared to the P40,000.00 mortgage value of the property, and petitioners themselves admitted a different consideration (P7,800.00) was agreed upon, contradicting the deed's recital and raising doubts about its integrity. The alteration of the amount from P3,000.00 to P2,000.00 in the deed further undermined its genuineness. On the issue of prescription: The Court held that an action to declare the inexistence of void contracts, such as the deed of sale in this case which lacked both consent and consideration, is imprescriptible. Article 1410 of the New Civil Code explicitly states that the action or defense for the declaration of the inexistence of void contracts does not prescribe. Unlike voidable contracts, which are subject to annulment within a specified period, void contracts are considered non-existent from the beginning and can be attacked at any time. The respondents' prompt action upon discovering the fraud further supported their claim, distinguishing the case from precedents where inaction led to dismissal. On the issue of the Bureau of Internal Revenue (BIR) Certificate: While the BIR certificate was not formally offered in evidence, the Court noted that it was presented during the testimony on rebuttal of respondent Mercedes de la Cruz. The certificate, which stated that the records of the BIR did not show that the respondents were issued any Tax Account Number (TAN), contradicted petitioners' claim that the respondents had tax account numbers and residence certificates. The Court found that the issue of the TAN's authenticity or ownership would ultimately boil down to credibility, and the trial court had already found petitioners and their witnesses not credible. Therefore, even without formal offer, the evidence presented and the credibility findings of the lower courts were sufficient. On the issue of reconveyance: The Court affirmed the order for reconveyance as a proper remedy when a contract is declared void and inexistent. Article 1410 of the Civil Code allows for the recovery of what has been given by virtue of a void contract. Since the deed of sale was found to be void, the transfer of title was without legal basis. Therefore, petitioners, who acquired title through the void deed, were obligated to return the property to the rightful owners, the private respondents, free from any liens and encumbrances.
Main Doctrine
A deed of sale that is void ab initio due to lack of consent and consideration is inexistent and imprescriptible. The presumption of validity of public documents is rebuttable by clear and convincing evidence.