Chua v. Westmont Bank
REITERATIONFacts
1. The Antecedents: This case originated from a petition filed by Tomas K. Chua seeking the cancellation of a real estate mortgage and a subsequent certificate of sale. Chua alleged that he pre-signed a blank Deed of Real Estate Mortgage in favor of Westmont Bank and submitted his owner's duplicate titles as collateral for a loan intended for T.C. Builders Suppliers, Inc. When the loan did not materialize due to disagreements over interest rates, Chua expected the mortgage to be canceled and his titles returned. However, Westmont Bank proceeded to foreclose the mortgaged properties and purchased them in a public auction. 2. Procedural History: Chua filed a petition for cancellation of mortgage before the Regional Trial Court (RTC) of Parañaque City. The RTC dismissed his complaint, upholding the validity of the Deed of Real Estate Mortgage and the subsequent foreclosure sale. Chua appealed this decision to the Court of Appeals (CA), which affirmed the RTC's ruling. The CA found no merit in Chua's claims, particularly his assertion that he signed a blank mortgage deed. Chua then filed a motion for reconsideration, which was denied by the CA. This led to the present petition before the Supreme Court. 3. The Petition: This petition for review on certiorari, filed under Rule 45, seeks to annul the decisions of the Court of Appeals. Petitioner Tomas K. Chua argues that the CA erred in affirming the RTC's findings, specifically questioning the admissibility and authenticity of Westmont Bank's documentary evidence and the conclusion that the mortgage deed was validly executed. Chua contends that the CA relied on speculation and conjecture regarding the timing of the deed's execution and that his testimony in open court should have superseded earlier allegations. He asserts that he has met his burden of proof to establish his case by a preponderance of evidence.
Issue(s)
Whether the Court of Appeals erred in admitting Westmont Bank’s documentary exhibits in evidence even if the authenticity and due execution were not established in accordance with the Rules of Evidence. Whether the Court of Appeals erred in concluding that petitioner could have signed and acknowledged the Deed of Real Estate Mortgage before his departure to Malaysia on July 10, 1998. Whether petitioner’s testimony in open court superseded his earlier admissions in the petition for cancellation of mortgage, consistent with Gardner v. Court of Appeals. Whether petitioner overcame his burden of proof by a preponderance of the evidence to establish that the Deed of Real Estate Mortgage is null and void.
Ruling
The petition for review on certiorari is DENIED for lack of merit. The Decision dated January 24, 2008 and the Resolution dated April 22, 2008 of the Court of Appeals in CA-G.R. CV No. 86882 are AFFIRMED. Costs against petitioner.
Ratio Decidendi
On Issue 1 (Admissibility and Authentication of Documents): The Court held that the deed was notarized and thus prima facie regular as a public document, enjoying the presumption of regularity and of due execution. Applying China Banking Corporation v. Lagon, the Court reiterated that a notarized instrument is admissible without further proof of due execution and is conclusive as to the truth of its contents unless rebutted by clear and convincing evidence. The petitioner failed to produce such clear and convincing evidence; his unsupported claim of having signed a blank deed was self-serving and insufficient to overcome the presumption. The Court further observed that the documentary exhibits had been the subject of cross-examination at trial and were admitted without objection, undermining petitioner’s later attacks on their authenticity. Because the CA found no error in the RTC’s appreciation of evidence and the deed was properly notarized, the Court concluded that the CA did not err in admitting and crediting the bank’s documentary evidence. On Issue 2 (Impossibility of Notarization on Date in Question): The Court examined petitioner’s claim that he was in Malaysia on July 10, 1998 and thus could not have acknowledged the deed, but found from petitioner’s own testimony that he left in the afternoon and was in the Philippines earlier that day. The CA reasonably inferred, and the Supreme Court agreed, that petitioner could have executed and acknowledged the document before his flight. The Court emphasized that this contention is essentially a factual one and that under Rule 45 review the Supreme Court will not disturb factual findings of the RTC and CA that are supported by substantial evidence. Applying Ong v. Ong and Sering v. Court of Appeals, the Court stressed deference to lower courts on credibility determinations and factual findings. Since the lower courts found petitioner’s chronology inconsistent and accepted the possibility of notarization prior to departure, there was no reversible error. On Issue 3 (Repudiation of Pleadings by Subsequent Testimony / Gardner): Petitioner relied on Gardner v. Court of Appeals to argue that his testimony in open court superseded his earlier admissions in the petition. The Court distinguished Gardner by noting that in Gardner the courts believed the witness’ subsequent testimony and found it credible; here both the RTC and the CA found petitioner’s testimony conflicting and not credible. The Supreme Court held that where trial and appellate courts have weighed credibility and disbelieved a party’s testimony, this Court will not substitute its judgment on credibility in a Rule 45 petition. Therefore, Gardner did not aid petitioner because the factual circumstances and credibility findings differ materially. On Issue 4 (Sufficiency of Proof / Burden of Proof): The Court reiterated the civil burden of proof is by preponderance of evidence but clarified that to overcome the presumption in favor of a notarized public document one must produce clear and convincing evidence. Citing Santos v. Lumbao and Eulogio v. Apeles, the Court explained that petitioner’s self-serving and unsupported assertion was insufficient to meet the higher quantum necessary to rebut a notarized instrument. The CA’s acceptance of the RTC’s findings that the mortgage was supported by substantial consideration and that foreclosure was proper was sustained because substantial evidence supported those findings. Consequently, petitioner did not carry his burden and the Court affirmed the dismissal of his complaint.
Main Doctrine
A notarized deed is a public document enjoying the presumption of regularity and is prima facie evidence of its due execution; to overcome that presumption clear and convincing evidence is required. Findings of fact of the Regional Trial Court and the Court of Appeals supported by substantial evidence are conclusive in a petition for review on certiorari under Rule 45.