Libres v. Delos Santos
REITERATIONFacts
The Antecedents: Respondents, Spouses Rodrigo and Martina delos Santos, filed a complaint for foreclosure of mortgage against petitioners, Bienvenido Libres and Julie L. Paningbatan. The respondents alleged that Bienvenido Libres executed three deeds of Real Estate Mortgage to secure three loans totaling P150,000.00, which were allegedly delivered to Julie L. Paningbatan. The respondents claimed that the petitioners failed to pay the principal loan and accrued interests, violating the mortgage terms. The petitioners, however, denied the allegations, claiming the documents were falsified and their signatures forged. Bienvenido Libres specifically denied authorizing his daughter, Julie Paningbatan, to enter into such transactions and requested a handwriting examination. Procedural History: The Regional Trial Court (RTC) of Lingayen, Pangasinan, Branch 68, initially dismissed the respondents' complaint and ordered the respondents to pay damages and litigation expenses to the petitioners. The respondents appealed this decision to the Court of Appeals (CA). The CA reversed the RTC's decision, ordering the petitioners to pay the P150,000.00 loan with legal interest, and in case of non-payment, to allow the sale of the mortgaged property via public auction. The petitioners then filed a motion for reconsideration, which was denied by the CA. This led to the petitioners filing the present petition for review on certiorari with the Supreme Court. The Petition: The petitioners are seeking a review on certiorari of the Court of Appeals' decision and resolution. They argue that the loans are not secured by a valid real estate mortgage because the absolute owner, Bienvenido Libres, did not sign the deeds, and his daughter was not authorized to contract the loans. The petitioners contend that the trial court correctly dismissed the case based on the NBI handwriting expert's opinion suggesting possible forgery of Bienvenido Libres' signatures. Conversely, the Court of Appeals gave more weight to the testimonies of the notaries public who attested to the personal appearance and signatures of the petitioners, and found the petitioners' evidence of forgery unconvincing, particularly their failure to present key witnesses and the self-serving nature of their claims.
Issue(s)
Whether the loans extended in favor of the petitioners are secured by a valid and legal real estate mortgage, considering the allegation of forgery regarding the deed of real estate mortgage. Whether the Court of Appeals erred in reversing the trial court's decision and ordering the foreclosure of the mortgage, based on the evidence presented regarding the validity of the mortgage.
Ruling
The petition is denied. The Court of Appeals' Decision ordering petitioners to pay respondents P150,000.00 with legal interest and its Resolution denying the motion for reconsideration are affirmed. However, the Regional Trial Court is directed to conduct a thorough inquiry into whether the subject property constitutes the petitioners' family home prior to execution.
Ratio Decidendi
On the validity of the Real Estate Mortgage and the alleged forgery of signatures: The Supreme Court affirmed the Court of Appeals' ruling, holding that notarial documents are imbued with the presumption of regularity and must be sustained unless impugned by clear, convincing, and more than merely preponderant evidence. The Court gave more weight to the direct testimonies of the two notaries public who categorically declared that Bienvenido Libres personally appeared before them and signed the mortgage deeds in their presence. These testimonies presented a more convincing picture of the actual events than the petitioners' bare denials and the NBI handwriting expert's opinion. The Court found the NBI expert's opinion to be merely persuasive and not conclusive, especially when contrasted with the positive declarations of the attesting witnesses. Furthermore, the Court noted the petitioners' failure to present the testimonies of Pancho and Gloria Libres, who were witnesses to the mortgage deeds, as fatal to their cause. Their testimonies, if favorable, could have corroborated the petitioners' defense. The Court reiterated that forgery cannot be presumed and must be proven by clear, positive, and convincing evidence, with the burden of proof lying on the party alleging it. The petitioners' claim of forgery was deemed insufficient, consisting of mere denials and an unconvincing expert opinion without corroboration. On the preponderance of evidence and the propriety of the foreclosure order: The Court found that there was a preponderance of evidence in favor of the respondents. This was based on the consistent and categorical testimonies of the notaries public who attested to the due execution of the mortgage deeds, the testimony of respondent Martina delos Santos, and the admission made by the petitioners during the barangay conciliation proceedings that they owed the respondents money and offered to pay with a portion of the subject property. The Court considered the NBI expert's findings as insufficient to overturn the positive declarations of the notaries public and the other evidence presented by the respondents. The failure of the petitioners to present corroborating witnesses, particularly Pancho and Gloria Libres, further weakened their claim of forgery and strengthened the respondents' position. The Court concluded that the evidence presented by the respondents was more convincing and established their claim by a preponderance of evidence, justifying the reversal of the trial court's decision.
Main Doctrine
Notarial documents, by virtue of their public nature and the presumption of regularity, must be sustained unless impugned by clear, convincing, and more than merely preponderant evidence. The testimony of notaries public who attested to the execution of documents generally prevails over claims of forgery, especially when the party alleging forgery fails to present sufficient corroborating evidence or fails to present witnesses who could attest to their claims.