Heirs of Celestial v. Heirs of Celestial
REITERATIONFacts
The Antecedents: Amado Celestial applied for and was granted a Miscellaneous Sales Patent for a 466 sq. meter lot, resulting in OCT No. P-27090, despite his civil status being erroneously recorded as 'single'. Amado married Florencia Celestial in 1962, and they occupied the lot. On October 10, 1975, Amado allegedly executed a Deed of Absolute Sale for P20,000.00 in favor of his sister-in-law, Editha G. Celestial, describing himself as single and without Florencia's signature. This led to the cancellation of OCT No. P-27090 and the issuance of TCT No. T-9145 in Editha's name. Amado passed away on March 21, 1976. Subsequently, on July 10, 1978, Editha sold the property with a right to repurchase to Prima B. Calingacion Chua for P30,000.00. Editha then subdivided the property into three lots (Lot 4112-A, Lot 4112-B, Lot 4112-D), obtaining TCT Nos. T-14270, T-14271, and T-14272. On September 4, 1979, Editha and her husband sold these subdivided lots to respondent Chua for P110,000.00, resulting in TCT Nos. T-14819, T-14820, and T-14821 being issued in Chua's name. In 1990, Chua notified the petitioners and other occupants to vacate and subsequently filed an ejectment case. Procedural History: Petitioners initiated a complaint seeking the nullity of the Deed of Absolute Sale between Amado and Editha, as well as subsequent deeds involving Chua. The Regional Trial Court (RTC) ruled in favor of the petitioners, declaring the October 10, 1975 Deed of Absolute Sale as forged and void, and the September 4, 1979 Deed of Sale of Three Parcels of Land as simulated and void. The RTC ordered the reconveyance of the properties to Amado Celestial's heirs and directed Chua to vacate. However, the Court of Appeals (CA) reversed the RTC's decision, dismissing the complaint, and subsequently denied the petitioners' motion for reconsideration. The Petition: Petitioners are seeking a review of the CA's decision, contending that the CA committed grave error in reversing the RTC's ruling. They argue that the CA misappreciated the evidence presented, made findings of fact that contradicted the trial court's findings, and based its decision on conjecture and surmises.
Issue(s)
Whether the Court of Appeals gravely misappreciated the evidence and committed serious error when it reversed the decision of the trial court declaring null and void the Deed of Absolute Sale dated October 10, 1975 and the simulated Deed of Sale of Three Parcels of Land dated September 4, 1979. Whether the findings of fact of the Court of Appeals are contrary to the findings of the trial court and contradicted by the evidence on record regarding the validity of the conveyance to respondent Prima B. Calingacion Chua. Whether the Court of Appeals gravely erred in rendering a decision on the basis of conjectures and surmises and departed from the accepted and usual course of judicial proceedings.
Ruling
The petition is GRANTED. The decision of the Court of Appeals is REVERSED and SET ASIDE. The decision of the Regional Trial Court is REINSTATED. The Deed of Absolute Sale dated October 10, 1975, and the Deed of Sale of Three Parcels of Land dated September 4, 1979, are declared NULL and VOID ab initio. Respondent Prima B. Calingacion is ordered to reconvey the properties to the petitioners and to vacate the lots. Calingacion and the Estate of Editha Celestial are ordered to pay petitioners attorney's fees, moral damages, and exemplary damages.
Ratio Decidendi
On the nullity of the Deed of Absolute Sale dated October 10, 1975 and the simulated Deed of Sale of Three Parcels of Land dated September 4, 1979: The Supreme Court reinstated the trial court's finding that the Deed of Absolute Sale was a forgery and that the simulated Deed of Sale of Three Parcels of Land dated September 4, 1979 was void. Regarding the Deed of Absolute Sale, the Court emphasized that while the appellate court found no accurate analysis due to lack of time proximity between specimen and questioned signatures, the trial court made its own independent assessment. The Court noted significant differences between the questioned signature and the standard signatures of Amado Celestial, which were also consistent with each other, indicating they were written by the same person. The NBI handwriting expert's testimony and report corroborated this finding. The Court also highlighted the notary public's failure to personally know Amado Celestial and merely presume his identity, which falls short of the legal requirement for notarization, rendering the acknowledgment defective and the deed void ab initio. The Court reiterated that a forged deed of sale conveys no title. Regarding the simulated Deed of Sale of Three Parcels of Land dated September 4, 1979, the trial court declared this deed void for being a simulated contract, and the Supreme Court reinstated this decision. The fact that the property was first sold with a right to repurchase and then later sold outright, along with the subsequent subdivision and transfer of titles, suggests a scheme to obscure the true nature of the transactions and potentially defraud the original owner or his heirs. The Court's reinstatement of the trial court's judgment implicitly upholds the finding of simulation and nullity of this deed as well. On the validity of the conveyance to respondent Prima B. Calingacion Chua: The Supreme Court ruled that respondent Chua could not be considered a purchaser in good faith. The trial court correctly found that Chua had knowledge or notice of other persons' rights or interests in the property prior to her purchase. Evidence showed that prior to 1962, old houses occupied by Amado's father, Erlindo, and other relatives, as well as tenants like Carmencita Paradena, were on the land. This presence of occupants, other than the seller (Editha and Erlindo), should have put Chua on guard and prompted her to investigate the possessory rights of the occupants. The Court cited Mathay v. Court of Appeals, stating that where circumstances exist that would prompt a prudent purchaser to investigate, such as the presence of occupants, failure to do so constitutes negligence and precludes claiming the rights of a purchaser in good faith. Chua's failure to inquire about the possessory rights of Florencia, Carmencita Paradena, and other relatives residing on the land meant no good faith could be appreciated in her acquisition of the property. On the Court of Appeals rendering a decision on the basis of conjectures and surmises and departing from the accepted and usual course of judicial proceedings: The Supreme Court implicitly found that the Court of Appeals erred in its assessment of the evidence, particularly regarding the handwriting analysis and the good faith of the purchaser. By reinstating the trial court's decision, the Supreme Court effectively reversed the Court of Appeals' findings, indicating that the appellate court's conclusions were based on insufficient or misconstrued evidence, thus amounting to conjectures and surmises. The departure from the trial court's factual findings, which were supported by evidence such as the NBI handwriting expert's testimony and the presence of occupants on the land, demonstrates a deviation from the accepted course of judicial proceedings.
Main Doctrine
A deed of sale found to be a forgery or a simulated contract is void ab initio, and subsequent transferees, even if they claim to be purchasers in good faith, cannot acquire valid title if they failed to exercise due diligence, especially when circumstances put them on guard regarding the seller's right to the property.