Donton, Heirs of v. Stier
REITERATIONFacts
The Antecedents: The underlying dispute concerns a parcel of land with improvements in Quezon City, previously registered under Transfer Certificate of Title (TCT) No. N-137480 in the name of Peter Donton. Donton discovered in June 2001, while in the United States, that respondents Duane Stier and Emily Maggay had taken possession of the property and were managing his business located there. Despite demands from Donton's lawyers, the respondents failed to vacate the property. Upon returning to the Philippines, Donton learned that the property's ownership had been transferred to the respondents under TCT No. N-225996, allegedly through fraudulent means, specifically by forging Donton's signature on a Deed of Absolute Sale dated July 16, 2001. Donton asserted that he was in the United States during the purported execution of the sale and that Stier, an American citizen, was legally disqualified from owning real property in the Philippines. Procedural History: Donton filed a complaint for annulment of title and reconveyance of property with damages against Stier, Maggay, and the Register of Deeds of Quezon City. The Regional Trial Court (RTC) of Quezon City, Branch 215, dismissed Donton's complaint for insufficiency of evidence in a Decision dated December 14, 2009. The RTC found the Deed of Absolute Sale, being a notarized public document, to possess a presumption of regularity that Donton's allegations of forgery did not overcome. The RTC also gave little weight to the testimony of the handwriting expert, citing issues with the source of the documents examined and the expert's lack of direct knowledge. The RTC subsequently denied petitioners' motion for reconsideration in an Order dated May 4, 2011. The petitioners appealed to the Court of Appeals (CA), which affirmed the RTC's decision in a Decision dated June 13, 2014, and denied the motion for reconsideration in a Resolution dated January 21, 2015. The CA found that the petitioners failed to substantiate their forgery claim and that the passport stamps presented were insufficient to prove Donton's absence from the Philippines on the date of the sale. The Petition: The Heirs of Peter Donton, through their legal representative, filed this petition for review on certiorari under Rule 45 of the Rules of Court, assailing the CA's decision and resolution. The petitioners argue that the CA erred in affirming the dismissal of their complaint, contending that the lower courts overlooked crucial evidence. Specifically, they maintain that Donton's signature on the Deed of Absolute Sale was forged and that he was physically absent from the Philippines at the time of its execution. They also reiterate the argument that Duane Stier, being an American citizen, is disqualified from owning land in the Philippines. The petition seeks the annulment of the title and reconveyance of the property, arguing that the sale to Stier is void ab initio due to constitutional prohibitions against alien ownership of land, even if the forgery claim is not definitively proven.
Issue(s)
Whether the Court of Appeals erred in ruling that petitioners failed to discharge the burden of proof required for the annulment of title and reconveyance of property with damages, and the procedural issue of re-examination of facts. Whether the Deed of Absolute Sale is void due to forgery of the signature of Peter Donton. Whether the sale of the subject property to Duane Stier, an American citizen, is void ab initio under the constitutional prohibition against aliens acquiring real property in the Philippines. Whether the sale of the subject property to Emily Maggay is valid.
Ruling
The petition is partly meritorious. The Supreme Court reversed and set aside the decision of the Court of Appeals, annulling the Deed of Absolute Sale and the Transfer Certificate of Title No. N-225996 insofar as respondent Duane Stier is concerned, and directing the issuance of a new title in the names of Peter Donton and Emily Maggay, without prejudice to the rights of any subsequent purchasers for value.
Ratio Decidendi
On the procedural issue of re-examination of facts: The Court acknowledged the general rule that a petition for review on certiorari under Rule 45 does not allow a re-examination of factual findings. However, it found that exceptions applied in this case, specifically when the findings of fact are premised on the supposed absence of evidence contradicted by the record, and when the Court of Appeals manifestly overlooked relevant facts. These exceptions justified the Court's authority to pass upon the evidence and draw its own conclusions. On the issue of forgery: The Court upheld the findings of the lower courts that the allegation of forgery of Peter Donton's signature on the Deed of Absolute Sale was not sufficiently proven. While an expert witness, Rosario C. Perez, testified to finding significant divergences between the questioned signature and Donton's standard signatures, her testimony was deemed to have little probative weight. This was because Perez admitted she had no actual knowledge of the source of the specimen signatures provided to her by the Criminal Investigation and Detection Group (CIDG), rendering the comparison based on unverified documents. Furthermore, the Court noted that Donton's own admission of returning to the Philippines in the last week of July 2001 cast doubt on his claim of being abroad during the entire period of the sale's execution. The Court reiterated that forgery cannot be presumed and must be proven by clear, positive, and convincing evidence, and that the opinion of handwriting experts is not binding on the court. On the issue of Stier's citizenship and capacity to own property: The Court found that the lower courts erred in ruling that Stier's American citizenship was not established. The Court pointed to admissions against interest made by Stier himself, both in the respondents' Answer with Counterclaim and in an Affidavit he executed, wherein he explicitly stated that he is an "American citizen." These admissions were considered binding and sufficient proof of his citizenship. Consequently, the sale of the subject property to Stier was declared void ab initio as it violated Section 7, Article XII of the Constitution, which prohibits aliens from acquiring real property in the Philippines, except in cases of hereditary succession. The Court emphasized that a contract violating the Constitution is null and void and produces no legal effect. On the issue of Maggay's capacity to own property: The Court affirmed the lower courts' finding that petitioners failed to substantiate their allegation that Emily Maggay had no capacity to purchase the subject property. As such, the sale to Maggay was deemed valid, but only up to the extent of her undivided one-half share in the property. The other undivided one-half share, which pertained to Stier, was declared void and ordered to revert to Donton, the original owner.
Main Doctrine
While the allegation of forgery of a signature on a Deed of Absolute Sale was not sufficiently proven, the sale of real property to a foreign citizen is void ab initio pursuant to the constitutional prohibition against aliens acquiring lands in the Philippines. The sale is valid only with respect to the co-vendee who is qualified to acquire property.