Mendezona v. Ozamiz
REITERATIONFacts
The Antecedents: This case concerns a dispute over the ownership of three parcels of land located in the Banilad Estate, Lahug, Cebu City. The petitioners, spouses Mario J. Mendezona and Teresita M. Mendezona, spouses Luis J. Mendezona and Maricar L. Mendezona, and Teresita Adad Vda. de Mendezona, claim ownership based on a Deed of Absolute Sale dated April 28, 1989, executed in their favor by Carmen Ozamiz. The respondents, who are relatives of Carmen Ozamiz, challenged the validity of this sale, alleging that Carmen Ozamiz was already mentally incapacitated and that the sale was simulated. The underlying dispute arose from a notice of lis pendens inscribed on the petitioners' titles, stemming from a guardianship proceeding initiated by the respondents for Carmen Ozamiz. Procedural History: The petitioners filed a suit for quieting of title before the Regional Trial Court (RTC) of Cebu City, Branch 6, seeking to remove the cloud on their titles caused by the lis pendens. The RTC ruled in favor of the petitioners, upholding the validity of the Deed of Absolute Sale and ordering the removal of the lis pendens. However, on appeal, the Court of Appeals reversed the RTC's decision. The appellate court found the Deed of Absolute Sale to be simulated, citing a lack of proof of payment and the alleged impaired mental state of Carmen Ozamiz at the time of the sale. The Court of Appeals ordered the cancellation of the titles issued to the petitioners and the issuance of new titles in favor of Carmen Ozamiz or her estate. The petitioners' subsequent motions for reconsideration and for a new trial were denied by the Court of Appeals. The Petition: The petitioners seek a review on certiorari of the Court of Appeals' decision and resolution. They argue that the appellate court gravely erred in ruling that the Deed of Absolute Sale was simulated and that Carmen Ozamiz's mental faculties were seriously impaired. The petitioners contend that the appellate court ignored statutory presumptions of regularity for notarized documents and the presumption of sound mind. They assert that the burden of proof to show invalidity lay with the respondents, who failed to discharge it. Furthermore, the petitioners argue that the appellate court erred in refusing to consider crucial evidence, including checks proving payment and the testimony of Judge Teodorico Durias regarding Carmen Ozamiz's mental state. The petition asks this Court to reverse the Court of Appeals' decision and reinstate the RTC's ruling.
Issue(s)
Whether the Court of Appeals gravely erred in ruling that the April 28, 1989 Deed of Absolute Sale was a simulated contract. Whether the Court of Appeals gravely erred in ruling that Carmen Ozamiz’s mental faculties were seriously impaired when she executed the Deed of Absolute Sale on April 28, 1989. Whether the Court of Appeals gravely erred in refusing to consider Judge Teodorico Durias’s testimony as newly discovered evidence.
Ruling
The Supreme Court granted the petition, reversed and set aside the decision and resolution of the Court of Appeals, and reinstated the decision of the Regional Trial Court of Cebu City, Branch 6.
Ratio Decidendi
On the issue of simulation and validity of the Deed of Absolute Sale: The Court held that simulation requires an outward declaration of will different from the parties' true intention, a false appearance intended by mutual agreement, and the purpose of deceiving third persons. None of these were clearly shown. The Court emphasized that a notarized Deed of Absolute Sale enjoys the presumption of regularity and carries evidentiary weight regarding its due execution, being admissible without further proof of authenticity. The burden of proving fraud or invalidity of such a document rests upon the party assailing it, requiring clear, convincing, and more than merely preponderant evidence. The respondents failed to discharge this burden. The Court found the testimonies of Carmen Ozamiz's assistant and bookkeeper unreliable and inconsistent, and noted that the deed itself acknowledged receipt of the ₱1,040,000.00 consideration. The appellate court's reliance on the non-production of checks was misplaced, as payment was acknowledged in the notarized deed, and the burden of proving non-payment was on the respondents. On the issue of Carmen Ozamiz's mental capacity: The Court found that the respondents' core witnesses made sweeping statements that failed to clearly demonstrate Carmen Ozamiz's true state of mind at the time of the sale. The testimony of Dr. Faith Go did not categorically state that Carmen Ozamiz was in a "second childhood" as early as 1987, and the petitioners' rebuttal witness, a neurologist, testified that no conclusion of mental incapacity could be inferred from Dr. Go's notes or the prescription of medication for memory loss. The Court reiterated that a person is not incapacitated to contract merely due to advanced age or physical infirmities unless these impair mental faculties to the extent of preventing the protection of property rights. The respondents failed to provide adequate proof of such impairment on April 28, 1989. Furthermore, the Court noted that respondents did not assail nine other important documents signed by Carmen Ozamiz before or after the disputed sale, contradicting their claim of complete incapacity since 1987. The Court agreed with the trial court that it was unfair to claim soundness of mind when beneficial and incapacity when disadvantageous. On the issue of Judge Durias's testimony as newly discovered evidence: The Court ruled that the testimony of Judge Durias could not be considered newly discovered evidence warranting a new trial. The requirements for newly discovered evidence are: (a) discovered after trial; (b) could not have been discovered and produced during trial even with reasonable diligence; and (c) material and would probably alter the result. The Court found that the requirement of reasonable diligence was not met, as Judge Durias's name had surfaced during pre-trial. The testimony existed before and during the trial and could have been presented. The Court cited jurisprudence holding that a lack of diligence is exhibited when evidence within reach or through public records or available discovery procedures is not secured.
Main Doctrine
A notarized deed of sale, which acknowledges receipt of the consideration, enjoys the presumption of regularity and due execution. The burden of proving its invalidity or simulation rests upon the party assailing it, who must present clear, convincing, and more than merely preponderant evidence. Mere non-production of checks or unsubstantiated claims of mental incapacity are insufficient to overcome this presumption.