Chingkoe v. Chingkoe
REITERATIONFacts
The Antecedents: Faustino Chingkoe and Gloria Chingkoe were registered owners of a property. Faustino alleged that in 1990, he allowed his brother, Felix Chingkoe, to occupy the property and signed an undated Deed of Sale at their mother's (Tan Po Chu) request to appease Felix, who was becoming an alcoholic. Felix, on the other hand, claimed he had been in possession since 1989 and purchased the property on October 10, 1994, for P3,130,000.00, with both parties signing the Deed of Sale before a notary public. Felix filed a complaint for specific performance with damages when Faustino refused to surrender the Owner's Duplicate of TCT No. 8283 and later discovered Faustino had mortgaged the property. Procedural History: The Regional Trial Court (RTC) ruled in favor of Felix, declaring the Deed of Absolute Sale valid and due to its execution, ordering Faustino and Gloria to pay attorney's fees. Upon Felix's motion for reconsideration, the RTC ordered the surrender of the TCT. Faustino appealed to the Court of Appeals (CA). The CA reversed the RTC's decision, giving credence to Tan Po Chu's testimony that Faustino signed the Deed of Sale merely to appease Felix without intent to sell, and that Felix failed to prove payment, rendering the contract void for lack of consideration. Felix's motion for reconsideration was denied. The Petition: Felix filed a Petition for Review on Certiorari, arguing that the CA erred in considering Tan Po Chu's testimony as critical without explaining how the RTC misjudged her credibility, and how her testimony outweighed his and the notary public's. He also insisted on being awarded actual damages for lost business opportunities.
Issue(s)
Whether the Court of Appeals erred in reversing the Regional Trial Court's decision by giving undue weight to the testimony of Tan Po Chu over the presumption of regularity of a notarized Deed of Sale. Whether the failure to prove actual payment of the contract price renders a Deed of Sale void. Whether Felix Chingkoe is entitled to actual damages for lost business opportunity.
Ruling
The petition is GRANTED. The Court of Appeals' Decision dated April 30, 2018, is REVERSED. The Decision of the Regional Trial Court Branch 101, Quezon City dated May 12, 2014, and its Order dated July 30, 2015, are REINSTATED.
Ratio Decidendi
On the validity of the Deed of Sale and the weight of Tan Po Chu's testimony: The Court held that a duly notarized Deed of Sale enjoys the presumption of regularity, authenticity, and due execution, which can only be overturned by clear and convincing evidence. The CA overturned this presumption based solely on the testimony of Tan Po Chu. However, her testimony was found to be repetitive, unresponsive, and indicated her lack of understanding of the document, including the contract price. She admitted she could not read English, did not pay much attention to the document, and believed it was only a temporary measure to appease Felix. The Court emphasized that the evaluation of witness credibility is best left to the trial court, which had the opportunity to observe the witnesses firsthand. Furthermore, a witness can only testify on facts within their personal knowledge, and Tan Po Chu's testimony on the alleged simulation was hearsay as she was not present during the signing and notarization, nor privy to the discussions of the terms. On the issue of consideration and absolute simulation: The Court found ample evidence supporting the validity of the Deed of Sale. Faustino, who admitted initiating the preparation of the Deed of Sale and signing it with his wife, is presumed to know its contents. The notary public, Atty. Calabio, testified that both parties appeared before him. Faustino's claim that the Deed was an absolute simulation was contradicted by his own testimony, where he stated that the intention to give the house to Felix eventually was always there, and he committed this to his mother. His excuses were deemed flimsy. The Court clarified that failure to pay the consideration is different from lack of consideration; non-payment does not render a contract void but gives the injured party the remedy to demand fulfillment or rescission under Article 1191 of the Civil Code. The Deed of Sale itself contained an acknowledgment of full payment, which, in the absence of clear and convincing evidence to the contrary, was deemed sufficient proof of payment. On the claim for actual damages: The Court ruled that Felix's claim for actual damages based on unrealized profits was without merit. Article 2199 of the Civil Code requires that actual damages must be duly proved with reasonable certainty. Felix's testimony alone, without supporting receipts, documents, or other evidence, was insufficient to establish the extent of the pecuniary loss suffered. The Court reiterated that actual damages cannot be presumed and must be based on competent proof, not speculation or guesswork.
Main Doctrine
A duly notarized Deed of Sale enjoys the presumption of regularity, authenticity, and due execution, which can only be overturned by clear and convincing evidence. The testimony of a witness who did not understand the document, was not present during its execution, and had no part in the discussion of its terms is insufficient to overcome this presumption. Failure to pay the contract price does not render a contract void; it merely gives the injured party the remedy to demand fulfillment or rescission.