Tating v. Marcella
REITERATIONFacts
The Antecedents: The underlying dispute concerns a parcel of land, Lot 56, originally owned by Daniela Solano Vda. de Tating. On October 14, 1969, Daniela executed a Deed of Absolute Sale for this property in favor of her granddaughter, Nena Lazalita Tating (Nena). Nena subsequently obtained a Transfer Certificate of Title (TCT) in her name and paid the corresponding real estate taxes for several years. However, Daniela remained in possession of the property. On December 28, 1977, Daniela executed a sworn statement asserting that the sale was not intended to be a genuine transfer of ownership but rather a means for Nena to obtain a loan using the property as collateral. Daniela passed away on July 29, 1988. After Daniela's death, her heirs, Carlos and Felicidad Tating, demanded their rightful shares of the property from Nena, citing Daniela's sworn statement. Procedural History: On September 6, 1989, Carlos and Felicidad Tating filed a complaint against Nena before the Regional Trial Court (RTC) of Cadiz City, Negros Occidental, seeking to nullify the Deed of Absolute Sale, cancel Nena's TCT, and have a new title issued in favor of Daniela's heirs. An amended complaint was later filed to exclude a deceased heir. Nena denied the allegations of fraud and misrepresentation. After trial, the RTC rendered a decision on November 4, 1998, declaring the Deed of Absolute Sale null and void and ordering the cancellation of Nena's TCT, with the property to be divided among Daniela's heirs, including Nena, in equal shares. The RTC also awarded damages and attorney's fees. Nena appealed this decision to the Court of Appeals (CA). On February 22, 2002, the CA affirmed the RTC's decision, and a subsequent motion for reconsideration was denied on August 22, 2002. The Petition: Nena Lazalita Tating filed the present petition for certiorari with the Supreme Court, arguing that the CA erred in affirming the RTC's decision, which she contends was not supported by evidence and violated applicable laws. Specifically, Nena argued that the RTC and CA erred in giving probative weight to Daniela's sworn statement, as it constituted hearsay evidence and denied Nena the opportunity to cross-examine the deceased. She also contended that if the sale were simulated, Daniela would have taken action during her lifetime, and that the lower courts failed to require clear and convincing evidence to nullify a notarial document. The Supreme Court, while noting that the proper remedy should have been a petition for review under Rule 45, treated the petition as such in the interest of justice. The Court ultimately found that the private respondents failed to prove by clear, strong, and convincing evidence that the contract of sale was simulated, and that Nena's payment of taxes and assertion of ownership rights, along with Daniela's prolonged silence, supported the validity of the sale.
Issue(s)
Whether the Deed of Absolute Sale dated October 14, 1969, is simulated. Whether the sworn statement of Daniela dated December 28, 1977, is sufficient evidence to prove simulation, and whether the lower courts erred in giving it probative weight. Whether the petitioner demonstrated ownership through tax declarations and payments. Whether the physical possession of the property by Daniela is inconsistent with Nena's ownership. Given the finding on the validity of the sale, whether a trust relationship was created between Daniela and Nena.
Ruling
The petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals are REVERSED AND SET ASIDE. The complaint of the private respondents is DISMISSED.
Ratio Decidendi
On the issue of simulated sale: The Court held that the private respondents failed to present clear, strong, and convincing evidence beyond a mere preponderance of evidence to prove simulation. The legal presumption favors the validity of contracts, and the party impugning the regularity of a contract has the burden of proving its simulation. Since the private respondents failed to discharge this burden, the presumption of regularity and validity of the Deed of Absolute Sale stands. On the issue of the probative weight of Daniela's sworn statement: The Court held that while Daniela's sworn statement dated December 28, 1977, was admissible, it should not have been given probative weight by the lower courts. Affidavits are generally considered hearsay evidence, especially when the affiant is deceased and the adverse party is deprived of the opportunity to cross-examine. The Court emphasized that admissibility of evidence should not be equated with its weight. Since Daniela was no longer available to testify, her sworn statement, standing alone, was insufficient to prove that the contract of sale was simulated. The private respondents failed to present other evidence to sufficiently prove their allegation that Daniela had no intention of disposing of her property. On the petitioner's claim of ownership through tax declarations and payments: The Court found that petitioner Nena Lazalita Tating declared the property for taxation and paid real estate taxes on it in her name from 1972 to 1988, with only a few lapses. While tax receipts and declarations are not incontrovertible proof of ownership, they constitute evidence of a claim of title. The voluntary declaration of property for taxation manifests a bona fide claim of acquisition of ownership. Conversely, the private respondents failed to present any tax receipt or declaration showing that Daniela paid taxes on the disputed lot as proof of her claim of ownership. The only Tax Declaration in Daniela's name pertained to the house on the lot, and it even contained a notation that Nena owned the lot. On the issue of physical possession: The Court clarified that ownership and possession are distinct legal concepts. The fact that Daniela retained physical possession of the property after the sale and until her death does not necessarily negate Nena's ownership. Under Article 1498 of the Civil Code, the execution of a sale through a public instrument is equivalent to delivery of the thing sold, unless the contrary appears. Therefore, possession, along with ownership, was transferred to Nena by virtue of the notarized deed of conveyance. Nena's failure to take actual possession or occupation of the property was not legally consequential as she had already perfected her ownership and title. On the issue of trust relationship: Given that the Court found the contract of sale to be valid and not simulated, there was no necessity to discuss the issue of whether a trust relationship was created between Daniela and Nena.
Main Doctrine
A sworn statement, while admissible, may be rejected for lack of probative weight if the affiant is deceased and the adverse party is deprived of the opportunity to cross-examine, especially when the opposing party presents evidence of ownership such as tax declarations and tax payments.