Heirs of Lagon v. Ultramax Healthcare Supplies, Inc.
REITERATIONFacts
The Antecedents: Spouses Jose and Nenita Lagon were the registered owners of two parcels of land. In July 2011, they discovered that their titles had been cancelled and replaced with new titles issued in the name of Ultramax Healthcare Supplies, Inc. (Ultramax). The Lagon Spouses filed a complaint for annulment of the new titles, alleging that the cancellation and transfer were due to a falsified deed of absolute sale. Ultramax countered that the properties were ceded to its director, Margie Huan, as payment for a substantial loan granted to the Lagon Spouses. Procedural History: After Jose Lagon's death, his heirs were substituted as petitioners. During the trial, Ultramax filed a Request for Admission concerning a Deed of Mortgage and a Deed of Absolute Sale, both dated December 2009. The Lagon heirs objected. Ultramax later filed a Supplemental Judicial Affidavit introducing the Deed of Mortgage. The Regional Trial Court (RTC) admitted the affidavit and the Deed of Mortgage, citing substantial justice and equity, and permitted its examination to prove previously existing obligations and for signature comparison. The Lagon heirs' motion for reconsideration was denied. They then filed a Petition for Certiorari with the Court of Appeals (CA), arguing grave abuse of discretion by the RTC. The CA dismissed the petition, holding that the RTC's actions were aimed at determining the authenticity of signatures and that the trial court has the authority to admit evidence determinative of the case's outcome. The CA denied the heirs' motion for reconsideration. The Petition: The Heirs of Jose Lagon filed a Petition for Review on Certiorari with this Court, assailing the CA's decision. They contend that the CA erred in dismissing their petition for certiorari. The petitioners argue that the Deed of Mortgage should not have been admitted as it was not mentioned in Ultramax's Answer and had been deemed inadmissible by the RTC. They also assert that the Deed of Mortgage is irrelevant, as the core issue is the falsification of the Deed of Absolute Sale. Ultramax, in its Comment, maintains that the CA correctly upheld the RTC's decision, as presenting the Deed of Mortgage constitutes defense evidence and is relevant to proving the authenticity of signatures on other relevant documents. The petitioners, in their Reply, reiterate that the examination of the Deed of Mortgage serves no purpose and cannot be used to prove existing obligations.
Issue(s)
Whether the Court of Appeals erred in finding that the Regional Trial Court did not gravely abuse its discretion in granting the Motion to have the Deed of Mortgage examined by a handwriting expert. Whether the Deed of Mortgage, not previously alleged in the Answer or marked during pre-trial, could be admitted for examination to compare signatures with the allegedly falsified Deed of Absolute Sale; and the relevancy and admissibility of the Deed of Mortgage.
Ruling
The Petition is DENIED for lack of merit. The January 31, 2019 Decision and May 8, 2019 Resolution of the Court of Appeals in CA-G.R. SP No. 08653-MIN are AFFIRMED.
Ratio Decidendi
On the issue of the RTC's discretion to admit the Deed of Mortgage for examination: The Court agreed with the Court of Appeals that the RTC did not gravely abuse its discretion. The RTC allowed the presentation of the Deed of Mortgage to allow respondents an opportunity to refute petitioners' evidence, particularly after petitioners moved for a forensic handwriting expert to examine the Deed of Absolute Sale. The need to introduce the separate but related Deed of Mortgage arose after the pre-trial when the results of the examination of the Deed of Absolute Sale were presented. The RTC admitted the Deed of Mortgage and allowed its examination not to prove an existing obligation, but to compare the signatures found in it with those on the questioned Deed of Absolute Sale to establish the probability of falsification. This action was justified by the principle of substantial justice and equity. On the issue of admitting evidence not pre-marked during pre-trial, and the relevancy and admissibility of the Deed of Mortgage: The Court reiterated the well-established rule that no evidence may be introduced during trial if it was not identified and pre-marked during pre-trial. However, this rule allows for an exception: if good cause has been shown, the trial court may allow documentary or object evidence not previously marked to be introduced. "Good cause" must be shown to be a "substantial reason that affords a legal excuse." Procedural rules are designed to aid courts in resolving cases and should not be applied so rigidly as to frustrate the full adjudication of cases. They facilitate the reception and evaluation of evidence rather than allowing litigants to lose on mere technicalities. The Court emphasized that it should not demand strict application of rules when such would exacerbate the situation rather than promote substantial justice. The Court found that the petitioners' claim that the Deed of Mortgage is irrelevant does not hold water. Rule 128 of the Rules of Court defines relevant evidence as that which has such a relation to the fact in issue as to induce belief in its existence or non-existence. Evidence on collateral matters is not allowed unless it tends in any reasonable degree to establish the probability or improbability of the fact in issue. Since the main question before the trial court is the falsification of the Deed of Absolute Sale, the signatures on the Deed of Mortgage can establish the probability of such falsification, making it relevant evidence. A reading of the RTC's Resolutions shows it did not unequivocally state that the Deed of Mortgage was inadmissible. The July 1, 2016 Resolution admitted the Supplemental Judicial Affidavit as relevant evidence that could reinforce claims affecting the plaintiffs' liability, and permitted proof of previously existing valid obligations. The March 2017 Resolution stated that the defendants were asking for an opportunity to compare signatures in the questioned Deed of Sale with those in the "ignored 'Deed of Mortgage'," deeming the signatures therein relevant and material evidence. The Court also noted that the Pre-Trial Order indicated that both parties reserved their rights to present additional evidence without objection, which amounts to a waiver of the strict application of Section 2 of the Judicial Affidavit Rule.
Main Doctrine
The trial court may allow the introduction of documentary or object evidence not previously marked during pre-trial if good cause is shown, which requires a substantial reason that affords a legal excuse, to promote substantial justice and equity, especially when the need for such evidence arises during trial due to developments in the proceedings.