Dela Peña v. Avila
REITERATIONFacts
The Antecedents: Antonia R. Dela Peña obtained a loan from A.C. Aguila & Sons, Co. (Aguila) secured by a real estate mortgage over a residential land registered in her name, married to Antegono A. Dela Peña. Subsequently, Antonia executed a Deed of Absolute Sale over the same property in favor of Gemma Remilyn C. Avila (Gemma) for a stated consideration. Gemma then caused the cancellation of the title and registered the property in her name, and subsequently constituted a real estate mortgage in favor of Far East Bank and Trust Company (FEBTC-BPI) to secure loans she obtained. Due to Gemma's failure to pay her loans, FEBTC-BPI foreclosed the mortgage and consolidated ownership. Antonia later filed an Affidavit of Adverse Claim alleging the Deed of Absolute Sale was simulated. Procedural History: Antonia and her son Alvin John B. Dela Peña filed a complaint against Gemma for annulment of the Deed of Absolute Sale, reconveyance, damages, and attorney's fees, alleging the property was conjugal, the sale was simulated, and Antonia was misled. FEBTC-BPI was impleaded as an additional defendant. The Regional Trial Court (RTC) declared the Deed of Absolute Sale void, ordered FEBTC-BPI to reconvey the property, and awarded damages to the Dela Peñas. FEBTC-BPI appealed to the Court of Appeals (CA). The CA reversed the RTC decision, upholding the validity of the Deed of Absolute Sale and FEBTC-BPI's status as a mortgagee in good faith. The Petition: The Dela Peñas filed a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure, seeking the reversal of the CA decision. They argued that the CA erred in reversing the RTC's findings that the property was conjugal, that the Deed of Absolute Sale was void, and that FEBTC-BPI was a mortgagee in bad faith.
Issue(s)
Whether or not the CA erred in reversing the RTC holding the house and lot covered by TCT No. N-32315 conjugal property of the spouses Antegono and Antonia Dela Peña; Whether or not the CA erred in reversing the RTC declaring null and void the Deed of Absolute Sale executed by Antonia to Gemma; Whether or not the CA erred in reversing the RTC holding FEBTC-BPI a mortgagee/purchaser in bad faith.
Ruling
The petition is DENIED for lack of merit. The assailed Court of Appeals Decision dated 31 March 2009 is AFFIRMED in toto. The Deed of Absolute Sale in favor of Gemma Avila dated November 4, 1997 and the subsequent sale on auction of the subject property to FEBTC (now Bank of the Philippine Islands) on March 15, 1999 are upheld as valid and binding.
Ratio Decidendi
On Whether the property is conjugal: The Court held that the presumption of conjugality under Article 160 of the Civil Code requires proof that the property was acquired during the marriage. The Dela Peñas failed to present any evidence to establish the date of acquisition of the property, relying solely on Antonia's uncorroborated assertion and the phrase "married to Antegono A. Dela Peña" in the title. The Court reiterated that such a phrase is merely descriptive of the civil status and does not prove acquisition during coverture. Therefore, without proof of acquisition during the marriage, the property is presumed paraphernal, belonging exclusively to Antonia. The CA correctly ruled that the property was Antonia's exclusive property. On the validity of the Deed of Absolute Sale: The Court affirmed the CA's ruling that the RTC erred in nullifying the Deed of Absolute Sale. The Court found Antonia's claim that her signature was forged to be contradicted by her own allegation in the complaint that she was misled into executing the deed, and by the NBI Questioned Documents Report which found her signature on the Deed of Absolute Sale to be written by the same person who signed the Deed of Real Estate Mortgage. Furthermore, the Court noted that the Deed of Absolute Sale, being a notarized public document, enjoys a presumption of regularity and due execution, which the Dela Peñas failed to overcome with clear and convincing evidence. Antonia's admission that she did not pay the loan from Aguila and that Gemma extended a ₱50,000.00 loan further supported Gemma's version of the transaction. On FEBTC-BPI's status as mortgagee in good faith: The Court upheld the CA's finding that FEBTC-BPI was a mortgagee in good faith and for value. The real estate mortgage in favor of FEBTC-BPI was executed on November 26, 1997, which predated Antonia's Affidavit of Adverse Claim filed on March 3, 1998, and the annotation of the Notice of Lis Pendens on December 10, 1999. The Court reiterated that a mortgage directly subjects the property to the fulfillment of the obligation, and the mortgagee has the right to foreclose upon default. The validity of the Deed of Absolute Sale in favor of Gemma having been upheld, FEBTC-BPI's supposed failure to ascertain ownership was rendered immaterial, as it relied on the title in Gemma's name at the time of the mortgage.
Main Doctrine
The presumption of conjugality under Article 160 of the Civil Code is not automatically invoked by the mere fact that a property is registered in the name of a spouse 'married to' another; proof of acquisition during the marriage is a sine qua non. Furthermore, a duly notarized Deed of Absolute Sale is a public document that enjoys a presumption of regularity and due execution, which can only be overcome by clear, convincing, and satisfactory evidence. A mortgagee in good faith, whose mortgage was constituted and registered prior to any adverse claim or notice of lis pendens, is entitled to the foreclosure of the mortgage upon the mortgagor's default.