Non v. Court of Appeals
REITERATIONFacts
The Antecedents: Spouses Julian C. Viado and Virginia P. Viado owned several properties, including a house and lot at 147 Isarog Street, Quezon City. Virginia died in 1982, and Julian died in 1985. They were survived by their children: Nilo Viado, Leah Viado Jacobs, Rebecca Viado (petitioner), and Delia Viado (petitioner). Nilo and Leah died in 1987. Nilo was survived by his wife Alicia Viado (respondent) and their children Cherri Viado and Fe Fides Viado (respondents). Petitioners and respondents shared the Isarog property as a residence. Procedural History: Petitioners filed a case for partition before the Quezon City RTC, asserting co-ownership. Respondents claimed absolute ownership based on a deed of donation executed by Julian Viado in favor of Nilo Viado for his conjugal share, and a deed of extrajudicial settlement where Julian Viado, Leah Viado Jacobs (through Nilo Viado's power of attorney), and petitioner Rebecca Viado waived their rights to Nilo Viado. These instruments were executed on August 26, 1983, and registered on January 7, 1988, leading to a new title in the name of Nilo Viado's heirs. Petitioners challenged the validity of these instruments, alleging forgery, undue influence, and fraud by Nilo Viado, and preterition of Delia Viado. The RTC ruled in favor of respondents. The Court of Appeals affirmed the RTC decision but ordered the remand of the case to determine the value of Delia Viado's share due to preterition. The Petition: Petitioners seek a reversal of the Court of Appeals' decision before the Supreme Court.
Issue(s)
Whether the deed of donation and deed of extrajudicial settlement are valid despite allegations of forgery, undue influence, and fraud. Whether the late registration of the deeds affects their validity among the parties. Whether the exclusion of Delia Viado, alleged to be a retardate, from the deed of extrajudicial settlement constitutes preterition that warrants annulment of the settlement.
Ruling
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The Court held that the validity of the deeds of donation and extrajudicial settlement remains binding among the parties. The preterition of Delia Viado does not warrant rescission of the partition but entitles her to be paid the value of her share, as correctly ordered by the Court of Appeals.
Ratio Decidendi
On the validity of the deed of donation and deed of extrajudicial settlement: The Court found that the issues raised by the petitioners regarding forgery, undue influence, and fraud were matters of evidence appreciation, which had been resolved against them by both the trial court and the appellate court. The Court noted that the petitioners' evidence was "utterly wanting" and consisted largely of self-serving testimonies. They failed to provide specific details on how the alleged vices occurred or why Julian Viado would be incapable of ceding his rights. Petitioner Rebecca Viado's claim of misunderstanding the nature of the extrajudicial settlement was deemed too tenuous, especially given her profession as a teacher. On the effect of late registration: The Court clarified that the fact that the two deeds were registered five years after their execution did not adversely affect their validity among the parties. Registration is a ministerial act that creates constructive notice against third persons, but it does not invalidate the instruments between the signatories. The instruments remained completely valid and binding between Julian Viado, Nilo Viado, and Leah Viado Jacobs, and subsequently their heirs. On the preterition of Delia Viado: The Court acknowledged that the exclusion of Delia Viado, who was alleged to be a retardate, from the deed of extrajudicial settlement did indeed constitute preterition. However, it held that this preterition, in the absence of proof of fraud and bad faith, does not justify a collateral attack on the title. Instead, the relief available is governed by Article 1104 of the Civil Code, which states that if preterition is not attended by bad faith and fraud, the partition shall not be rescinded, but the preterited heir shall be paid the value of their share. The Court thus found the appellate court's order to remand the case for valuation of Delia Viado's share to be proper.
Main Doctrine
The validity of deeds of donation and extrajudicial settlement, even if registered late, remains binding among the parties. Preterition of an heir in an extrajudicial settlement does not warrant rescission but entitles the preterited heir to payment of their share, provided there is no fraud or bad faith.