Destreza v. Plazo
REITERATIONFacts
The Antecedents: Pedro L. Riñoza died, leaving several heirs, including respondents Ma. Gracia R. Plazo and Ma. Fe R. Alaras. In settling the estate, Plazo discovered that Transfer Certificate of Title (TCT) 40353, covering a sugarland, was missing. She later found TCT 55396, issued in the name of petitioner Gregorio M. Destreza and his wife, covering the same sugarland and canceling TCT 40353. An inquiry at the Bureau of Internal Revenue (BIR) yielded no record of sale. Alaras testified that her father, Riñoza, had intended to mortgage the land to her uncle and had given her the title, which she returned later. Procedural History: Respondents filed a complaint against the Destreza spouses and the Register of Deeds, seeking the nullification of TCT 55396 and the restoration of TCT 40353. The Regional Trial Court (RTC) nullified the Deed of Sale and TCT 55396, ordered the restoration of TCT 40353, and directed the Riñoza estate to pay the Destrezas ₱60,000.00, with the Destrezas to vacate the land. The Court of Appeals (CA) affirmed the RTC decision with modification, removing the monetary award to the Destrezas, finding that while the deed of sale could be presumed regularly executed, the Destrezas destroyed this presumption by failing to prove its authenticity and genuineness, particularly due to the discrepancy in the stated purchase price versus the claimed payment. The Petition: Petitioner Destreza sought review from the Supreme Court, arguing that the CA erred in nullifying the deed of sale despite the presumption of due execution and authenticity of a notarized document, and that the burden of proof was on the respondents to prove the invalidity of the deed.
Issue(s)
Whether the notarized deed of sale executed by the late Pedro L. Riñoza in favor of the Destreza spouses is valid and binding, and whether the failure of the notary public to submit a notarial report invalidates the deed. Whether the Court of Appeals erred in nullifying the deed of sale and the corresponding Transfer Certificate of Title (TCT) 55396, and whether the respondents presented sufficient evidence to overcome the presumption of regularity and due execution of the notarized deed. Whether the alleged irregularities and discrepancies, such as the premature release of TCT 55396 and the discrepancy in the stated price, sufficiently invalidate the deed of sale, considering the Destrezas' possession and Riñoza's knowledge of the sale.
Ruling
The Supreme Court reversed and set aside the decision of the Court of Appeals. It declared the Deed of Sale valid and ordered the Registry of Deeds to register TCT 55396 in the name of spouses Gregorio M. Destreza and Bernarda E. Butiong upon compliance with registration requirements.
Ratio Decidendi
On the validity of the notarized deed of sale: The Court held that a notarized deed of sale is admissible as evidence and enjoys a presumption of authenticity and due execution. The failure of the notary public to submit a notarial report to the RTC notarial section does not invalidate the deed itself, as the parties should not suffer from the notary's negligence. The swearing of the parties before the notary and the latter's act of signing and affixing his seal are material. The notarized deed, especially with the seller already deceased, serves as the best evidence of the seller's consent to the sale. On the burden of proof and the Court of Appeals' error: The Court clarified that the burden of proof to overcome the presumption of regularity and due execution of a notarized deed lies with the party contesting it, and this requires clear and convincing evidence. The respondents, claiming grave doubts about TCT 55396, had the burden to prove their claim, which they failed to do. Mere speculations or perplexing circumstances, without confrontation or direct evidence, are insufficient to declare fraud. The evidence presented by respondents Plazo and Alaras was not clear and convincing enough to overcome the presumption of authenticity and due execution of the notarized deed of sale. Alaras' testimony about her father wanting to mortgage land did not identify the specific title or prove that TCT 40353 remained uncancelled. The discrepancy in payment was not adequately addressed by respondents. On the alleged irregularities and discrepancies, and the admissibility of the deed: The Court found that the circumstances cited by respondents, such as the alleged premature release of TCT 55396 or the discrepancy between the stated price (₱60,000.00) and the claimed payment (₱100,000.00), did not sufficiently overcome the presumption of validity. The premature release of a copy of a title does not affect the validity of the contract of sale between the parties, as registration is primarily for the protection of third persons. The discrepancy in price, while unexplained due to the death of Riñoza, was not sufficiently confronted by respondents and did not, by itself, nullify the deed, especially considering the open and continuous possession of the land by the Destrezas for seven years. The Destrezas' immediate and open occupation and cultivation of the land after the sale, and continuing for years, negates any scheme to steal the land. The fact that Riñoza himself was furnished a copy of TCT 55396 by the Register of Deeds further strengthens the Destrezas' case, indicating Riñoza's knowledge and consent to the sale, thereby negating any suggestion of a fabricated sale due to the notary's procedural lapse.
Main Doctrine
A notarized deed of sale, while presumed authentic and duly executed, can be rebutted by clear and convincing evidence. The burden of proof to overcome this presumption lies with the party contesting the deed. Failure to present such evidence, coupled with circumstances casting doubt on the transaction, may lead to the nullification of the deed and the corresponding title.