Alteration in documents ( Rule 132, Sec. 31) Psu-776-44 with an area of 6,382 square meters.

h an area of 6,382 square meters. The lots were located

in Lamut, Indiana, Bambang, Nueva Vizcaya, and were covered by
Transfer Certificate of Title (TCT) No. T-1657. Lang-ew died intestate
3 

on November 23, 1965 and was survived by her grandchildren Maria

G.R. No. 134712             August 13, 2004 Cabotaje, Agustin Cabotaje, Amelia Tomas, the children of her
daughter Josefina Bintican who died on November 21, 1952; and, her
MARIA CABOTAJE, AGUSTIN CABOTAJE, AMELIA TOMAS and grandson Daniel Pugayan, the son of her daughter Emerenciana
DANIEL PUGAYAN, petitioners, Bintican who also predeceased her.
vs.
SPOUSES SOTERO PUDUNAN and MARIA RIVERA, respondents. Maria Cabotaje, Daniel Pugayan and their close relatives Remicio
Marques and Amelia Tomas, were in dire need of money. On January
4, 1966, they borrowed P1,000 from the Spouses Sotero Pudunan and
Maria Rivera. They signed a private document prepared by Juan
Anungos, which stated inter alia that the payment of the said amount
DECISION was secured by a mortgage over Lot 1 covered by TCT No. T-1657,
and that the property was redeemable within one year, extendible for
another year, until the full amount of the loan was paid. The owner’s
4 

duplicate copy of TCT No. T-1657 was then delivered to the

mortgagees by the mortgagors. The Spouses Pudunan took possession
CALLEJO, SR., J.: of the property, although under the document, the mortgagors had the
right to remain in possession thereof.
This is a petition for review on certiorari of the Decision of the Court of
1 

Appeals (CA) in CA-G.R. CV No. 42432 which reversed the Decision of 2 

On the same date, January 4, 1966, Maria Cabotaje, Agustin Cabotaje,
the Regional Trial Court of Bayombong, Nueva Vizcaya, Branch 30, in Daniel Pugayan, Amelia Tomas and her husband Pedro Tomas affixed
Civil Case No. 207 for recovery of ownership and possession, and their signatures over a deed entitled "Confirmatory Deed of Sale," in
damages. which they undertook to sell Lot 2 covered by TCT No. T-1657 to the
Spouses Pudunan for the price of P2,000.00. Also in the document was
The Antecedents a statement that part of the money was remitted to Bonifacia Lang-ew
and was spent by her during her illness, and to her heirs which was
Bonifacia Lang-ew was the owner of two parcels of land, Lot 1 of Plan used for burial expenses. The document was notarized by Judge
Psu-776-44 with an area of 9,951 square meters; and Lot 2 of Plan Tomas P. Maddela, the Municipal Judge and Ex-Officio Notary Public of
Bayombong, Nueva Vizcaya, and registered in his notarial register as 20808 was issued by the Register of Deeds in favor of the Spouses
Document No. 461, Page 96, Book V, Series of 1966. The property sold
5 
Pudunan.
under the said deed is described as follows:
After nineteen years or so, or on February 26, 1985, petitioners Maria
A parcel of land Lot No. 2, Plan Psu. 77644, situated in the Barrio Cabotaje, Agustin Cabotaje, Amelia Tomas and Daniel Pugayan filed a
of Lamut, Municipality of Bambang, Province of Nueva Vizcaya; complaint with the RTC of Bayombong, Nueva Vizcaya against the
bounded on the S. by prop. of Arcadio Biag; on the W. by Aritao- respondents, the Spouses Pudunan, for recovery of ownership and
Bambang Prov. Road; on the N by prop. of Crisanto Caro; on the possession of Lots 1 and 2 covered by TCT No. T-1657. The petitioners
SE. by the Acdao Brook; and on the NW. by prop. of Francisco alleged inter alia that in a private document they signed on January 4,
Concepcion. Containing an area of 6,382 sq. meters, more or 1966, it appears that they mortgaged Lot 1 to secure the payment of
less. Covered by Transfer Certificate of Title No. T-1657 of the a P1,000-loan from the respondents. They averred, however, that they
land records of Nueva Vizcaya. 6
only received P660.00 and that the respondents thereafter took
possession of the property. Being impoverished, they tolerated the
Judge Tomas Maddela retained two copies of the deed for his notarial respondents’ possession of the property. The petitioners further
file. However, the deed was not filed with the Registry of Deeds of narrated that they offered to pay their loan in 1972, but that the
Nueva Vizcaya. Subsequently, it was made to appear in the original respondents refused to accept such payment as they (the respondents)
copy of the said deed that both Lots 1 and 2, consisting of 6,382 square were the rightful owners of the property. The petitioners further averred
meters and 9,951 square meters, respectively, were sold to the that after eighteen years, or in 1984, they sought the assistance of
Spouses Pudunan. The alterations are underscored, thus: counsel on what course of action to take, and it was only then that they
discovered that by virtue of a deed of sale issued in favor of the
Two parcels of land Lot No. 1 and 2, Plan Psu. 77644, situated in respondents, TCT No. T-20808 covering Lots 1 and 2 had been issued
the Barrio of Lamut, Municipality of Bambang, Province of Nueva in the names of the latter. The petitioners alleged, however, that no
Vizcaya; bounded on the S. by prop. of Arcadio Biag; on the W. copy of the said deed could be found in the Register of Deeds, and that
by Aritao-Bambang Prov. Road; on the N by prop. of Crisanto they never executed any deed of sale covering the said lots, much less
Caro; on the SE. by the Acdao Brook; and on the NW. by prop. of any deed settling the estate of the deceased Bonifacia Lang-ew.
Francisco Concepcion. Containing an area of 15,333 sq. meters,
more or less. Covered by Transfer Certificate of Title No. T-1657 The petitioners prayed that, after due proceedings, judgment be
of the land records of Nueva Vizcaya. 7
rendered in their favor, thus:

Such altered original copy was filed on July 18, 1966 with the Office of
the Register of Deeds of Nueva Vizcaya. On the same day, TCT No. T-
 WHEREFORE, it is respectfully prayed of the Honorable Court defendants and which certificate of title lawfully, validly and
that, after notice and hearing, judgment be rendered in favor of regularly issued to the herein defendants on July 18, 1966 by the
the plaintiffs and against the defendants as follows, thus: Register of Deeds of Nueva Vizcaya, in the absence of any
plaintiffs’ allegation of fraud, mistake, intimidation, violence or
a) Declaring as null and void Transfer Certificate of Title undue influence as alleged reasons for its nullification and
No. T-20808 and the deed of sale which caused the cancellation, the same is very true likewise to said plaintiffs’
issuance thereof; seeking the nullification of the sale in favor of defendants, has
also long prescribed and barred by the statute of limitations; 9

b) Declaring plaintiffs as the lawful owners of the above-

described landholding, and directing the Register of Deeds In the course of the presentation of the petitioners’ evidence, Cornelio
to issue another title in the names of said plaintiffs; Tubal from the Office of the Register of Deeds of Nueva Vizcaya
testified on July 15, 1986 that TCT No. T-20808 was issued on the
c) Ordering defendants to pay actual damages to the basis of a "Confirmatory Deed of Sale" covering Lots 1 and 2 which
10  11 

plaintiffs equivalent to the monetary value of 2,440 cavanes deed, on its face, contained intercalations and alterations.
(sic) of palay at 46 kilos per cavan; Subsequently, the petitioners, with prior leave of court, filed an
amended complaint in which they alleged inter alia that they never
d) Granting the claim for damages: moral damages received any amount by virtue of the altered "Confirmatory Deed of
of P10,000.00 each for all the plaintiffs or a total Sale;" that they turned over the owner’s duplicate copy of TCT No. T-
of P40,000.00 and exemplary damages of P10,000.00; and 1657 to the respondents as a sign of good faith on account of
their P1,000-loan of which only P673.60 was received by them; that
e) Reimbursing attorney’s fees of P7,000.00. they discovered the existence of the altered "Confirmatory Deed of
Sale" covering Lots 1 and 2 only on July 15, 1986; and, that they never
12 

PLAINTIFFS further pray for such other reliefs consistent with law executed any deed of sale covering Lot 1, nor received the amount
13 

and equity and available in the premises. 8

of P2,000.00 as stated on the said deed of sale. The petitioners
concluded that as such, the altered deed was null and void.
In their answer to the complaint, the respondents interposed the
defense of prescription of action, to wit: The petitioners prayed that they be granted the following reliefs:
That similarly the plaintiffs’ alleged cause of action to annul and WHEREFORE, it is respectfully prayed of the Honorable Court
cancel Transfer Certificate of Title No. T-20808 covering the that, after notice and hearing, judgment be rendered in favor of
parcels of land in question which had long legally belong to the the plaintiffs and against the defendants as follows, thus:
 a) Declaring as null and void partially both Transfer received by "Belong," while the balance of P199.60 was divided among
Certificate of Title No. T-20808 as far as Lot No. 1 covering the petitioners. The petitioners also presented Tubal who appeared for
15 

an area of 9,951 square meters and the deed of sale which the Office of the Register of Deeds and testified that TCT No. T-1657
caused the issuance thereof; was cancelled on the basis of the altered copy of the Confirmatory
Deed of Sale.
b) Declaring plaintiffs as the lawful owners of the above-
described landholding, directing the Register of Deeds to Respondent Maria Rivera testified that after the death of Lang-ew in
issue a title in the names of said plaintiffs covering said 1965, the petitioners offered to sell Lot 1 for P2,500.00 to them and that
parcel of land and ordering the defendants to deliver the the latter agreed. The amount of P1,000.00 was then given to the
physical possession thereof to the plaintiffs; petitioners, while the remaining P1,500.00 was spent for the burial of
Lang-ew. The respondents’ remittances were further evidenced by
c) Ordering defendants to pay actual damages to the receipts. Respondent Rivera narrated that the parties to the sale
16 

plaintiffs equivalent to the monetary value of 2,870 cavans arrived in the Office of Judge Maddela and requested the latter to revise
of palay at 46 kilos per cavan; the original copy of the Confirmatory Deed of Sale so as to include Lot
1 thereon. Since Judge Maddela was in a hurry, he instructed his Clerk
d) Granting the claim for damages: moral damages of Court Mariano Gonzales to include Lot 1 in the deed, and the latter
of P10,000.00 each for all the plaintiffs or a total did as he was told. The petitioners and respondents then proceeded to
of P40,000.00 and exemplary damages of P10,000.00; and the Office of the Register of Deeds where the said deed was filed.
According to respondent Rivera, she was not aware if Judge Maddela’s
e) Reimbursing attorney’s fees of P7,000.00. notarial copies of the deed were altered as to include Lot 1 therein,
since the judge was in such a hurry. 17

PLAINTIFFS further pray for such other reliefs consistent with law
and equity and available in the premises. 14
The petitioners presented Maria Cabotaje on rebuttal, who testified that
the petitioners never sold Lot 1 to the respondents and that they
The respondents filed a motion to dismiss the amended complaint on learned of the insertions and intercalations in the original copy of the
the grounds of acquisitive prescription under Article 1117, in relation to Confirmatory Deed of Sale only when Tubal testified. 18

Article 1134 of the New Civil Code, and prescription of action. The trial
court granted the motion but reinstated the case on the petitioners’ After trial, the court rendered judgment in favor of the petitioners, the
motion for reconsideration. At the trial, petitioner Maria Cabotaje decretal portion of which reads:
testified that of the P1,000-loan, they received only P468.00, of which
the amount of P326.60 was used for "title expenses;" P6.00 was
WHEREFORE, by preponderance of evidence, justice and equity The trial court ruled that the petitioners merely mortgaged Lot 1 to the
demand that Judgment be hereby rendered in favor of the respondents and that the conveyance thereof to the latter after the
plaintiffs and against the defendants: death of Lang-ew was null and void because it was not made in the
settlement of the estate of the deceased. According to the trial court,
1. Declaring null and void ab initio TCT No. T-20808 as far the action to declare the non-existence of the said deed is
as Lot No. 1 is concerned with an area of 9,951 sq. meters, imprescriptible. It also ruled that the action for the cancellation of the
and the Confirmatory Deed of Sale (Exh. "C") which conveyance on the ground of fraud commenced to run only when
caused the issuance of said title; Cornelio Tubal testified, and not on July 18, 1966 upon the filing of the
original copy of the deed in the Office of the Register of Deeds and the
2. Declaring plaintiffs as the lawful owners of said Lot No. 1 cancellation of TCT No. T-1657 in favor of TCT No. T-20808 over Lots
and directing the Register of Deeds to issue corresponding 1 and 2 which was issued under the names of the respondents. The
Title to plaintiffs and Ordering the defendants to deliver the trial court also ruled that the respondents had not acquired ownership of
physical possession thereof to the plaintiffs; Lot 1 by acquisitive prescription because the possession of the said lot
by the respondents was merely upon the tolerance of the petitioners.
3. Ordering defendants to deliver to the plaintiffs 2,870
cavans of palay at 46 kilos per cavan or pay its monetary On appeal to the Court of Appeals, the petitioners did not bother to file
equivalent computed at the then prevailing rate or cost as their brief. The CA, thereafter, rendered judgment reversing the
actual damages; decision of the trial court, holding that the original copy of the
Confirmatory Deed of Sale was voidable under Article 1391 of the New
4. Ordering defendants to pay plaintiffs as damages: Civil Code and not void ab initio; hence, the action to annul the said
deed prescribed four years from the time of the petitioners’ actual or
a) moral Damages – P2,000.00 for each plaintiff or a presumptive knowledge thereof. The appellate court held that the cause
total of P8,000.00; of action of the petitioners to nullify the deed accrued on July 18, 1966
when the Confirmatory Deed of Sale was filed with the Office of the
b) exemplary Damages – P2,000.00; Register of Deeds, as the petitioners henceforth had presumptive
knowledge of the existence of the altered Confirmatory Deed of
c) attorney’s Fees – P5,000.00; and, Sale. Hence, the petitioners should have filed their complaint within
20 

four years from July 18, 1966 or, on or before July 19, 1970. Since the
d) The costs of suit.
appellees filed their complaint only on February 26, 1995, their action
had long prescribed and should have been dismissed by the trial court.
SO ORDERED. 19

The appellate court further ruled that there is no law requiring the heirs
to execute the conveyance in the settlement of the estate of the action is imprescriptible as provided for in Article 1410 of the New Civil
deceased. On motion for reconsideration by the petitioners, they Code. The petitioners further contend that Article 1391 of the New Civil
alleged that the respondents altered the original copy of the Code applies only in a case where fraud is committed prior to or
Confirmatory Deed of Sale after the said deed was executed by the simultaneous with the execution of a deed. The petitioners argue that
22 

parties; as such, the deed was null and void, not merely voidable. the deed is null and void since the respondents altered the original copy
However, the CA denied the said motion. of the deed after the execution and notarization thereof.

In their petition at bar, the petitioners raise the following issues for For their part, the respondents contend that the original copy of the
resolution: Confirmatory Deed of Sale is valid. They aver that the alterations and
intercalations contained in the original copy of the deed were reflective
WHETHER OR NOT IN RESOLVING THE APPEAL BEFORE IT, of the fact that Lot 1 was sold by the petitioners after the execution of
THE HONORABLE COURT OF APPEALS, SECOND DIVISION, the said deed, and that such alterations were known and agreed to by
HAS DONE SO IN ACCORD WITH LAW AND WITH THE the petitioners before the same was filed with the Register of Deeds.
APPLICABLE DECISIONS OF THE HONORABLE HIGHEST They aver that the petitioners even turned over to them not only the
TRIBUNAL. owner’s duplicate copy of TCT No. T-1657 so that title over the two lots
could be issued in their names, but also the possession of the property
SPECIFICALLY: HAS PRESCRIPTION SET IN THE INSTANT after Lang-ew’s death on November 23, 1965. They also insist that they
CIVIL CASE AS TO DENY THE PETITIONERS OF THEIR have been in possession of the property since then. The respondents
RIGHT TO PURSUE THEIR CAUSE/COMPLAINT TO further contend that even if the altered original copy of the Confirmatory
RECOVER THEIR OWNERSHIP AND POSSESSION OF THE Deed of Sale is fraudulent, the same is merely voidable; hence, the
SUBJECT PROPERTY? 21
action to nullify the same is prescriptible. The respondents aver that
since the petitioners filed their complaint only on February 26, 1985,
The core issue for resolution is whether the original copy of the their action had long prescribed, considering that their cause of action
Confirmatory Deed of Sale wherein it appears that the petitioners also accrued on July 18, 1966.
sold Lot 1 of their property to the respondents is null and void.
We rule for the petitioners.
The petitioners assert that they did not sell Lot 1 to the respondents,
much less receive from them the P2,000.00 purchase price which The general rule is that in a petition for review on certiorari, only
appears in the original copy of the Confirmatory Deed of Sale. Absent questions of law may be raised. However, the rule is not without
their consent to the sale and the price or consideration for their exceptions, which the Court enumerated in Fuentes v. Court of
property, such deed is null and void; hence, they contend that their Appeals as follows: (a) when the factual findings of the trial court and
23 
the Court of Appeals are contradictory; (b) when the inference made by Second. The petitioners did not authenticate the alterations in the
the Court of Appeals is manifestly mistaken or absurd; (c) when the assailed deed by affixing their initials or signatures thereon.
judgment of the Court of Appeals is premised on its misapprehension of
the facts; and, (d) when the Court of Appeals failed to resolve relevant Third. Neither did Ex-Officio Notary Public, Judge Tomas Maddela
facts which, if properly considered, would justify a modification or authenticate the said alterations when he notarized the Confirmatory
reversal of the decision of the appellate court. The present case falls
24  Deed of Sale. 26

within the foregoing exceptions.

Fourth. Under the Confirmatory Deed of Sale, the petitioners sold Lot 2
Rule 132, Section 31 of the Revised Rules of Evidence, provides: for P2,000.00. In the assailed deed, the petitioners purportedly also
sold Lot 1 to the respondents, but the purchase price thereof remained
Alterations in document, how to explain. – The party producing a unchanged. Thus, under the assailed deed, the respondents
document as genuine which has been altered and appears to paid P2,000.00 for the two lots. The respondents failed to give a
have been altered after its execution, in a part material to the satisfactory explanation why the price of the property remained
question in dispute, must account for the alteration. He may show at P2,000.00 Evidently, there was no price or consideration for the sale
that the alteration was made by another, without his concurrence, of Lot 1, as it is incredible that the petitioners would sell the property to
or was made with the consent of the parties affected by it, or was the respondents without any price or consideration therefor.
otherwise properly or innocently made, or that the alteration did
not change the meaning or language of the instrument. If he fails Fifth. The respondents claim that they told Judge Maddela that they
to do that, the document shall not be admissible in evidence. were also buying Lot 1 from the petitioners, but since the judge was in a
hurry to leave, he merely instructed his clerk of court to make the
There is no doubt that the alterations in the assailed deed of sale are necessary alterations in his copies of the deed of sale. The respondents
substantial and material. We have reviewed the evidence on record and also claim that the parties to the deed left without seeing to it that the
we are convinced that the respondents, either by themselves or at their clerk of court had made the alterations in the copies of Judge Maddela:
behest and without the knowledge of the petitioners, caused the
alterations in the assailed copy of the Confirmatory Deed of Sale by Q And when the plaintiffs, according to you, went to you for the
making it appear therein that the petitioners sold Lot 1 as well as Lot 2 needed amount, you allegedly went to Judge Maddela?
with a total area of 15,333 square meters for only P2,000.00.
A Yes, Sir.
First. Respondent Maria Rivera admitted in court that the alteration
occurred after the execution of the Confirmatory Deed of Sale. 25
Q And you brought with you Exh. "E", which is the Confirmatory the file copy of Judge Maddela, but our copy contains the
Deed of Sale, which Exh. "E" appears not to contain any insertion.
intercalation or insertion, isn’t it?
Q You said that Judge Maddela was rushing then and he just told
A Yes, Sir. his clerk to make the insertion, my question is, did you see the
clerk bring out the file copy of Judge Maddela so that the
Q And when you went to Judge Maddela, according to you, you insertion would be made on that file copy?
told him that you were also buying Lot 1, did I hear you right?
A I do not know how to answer that but what the clerk said since
A Yes, Sir. they are not strangers to each other, meaning to say, the
plaintiffs.
Q And what did he tell you?
Q By the way, what office or place did you go and see Judge
A He asked, "What about this Lot 1?" Maddela at that time?

Q And what did you tell him? A It is his office at Bayombong?

A We told him that the plaintiffs were willing to give us the parcel Q Do you know that he was a Judge at that time of the Municipal
of land, Lot 1. Court of Bayombong?

Q And the plaintiffs were with you, is that what you mean when A Yes, Sir.
you went to Judge Maddela?
Q Do you still remember that clerk who allegedly was told to
A Yes, Sir. make [the] insertion by Judge Maddela?

Q And when you said or when you told (sic) to Judge Maddela A I cannot remember anymore because that happened long time
that the plaintiffs wanted to give you Lot 1, what did he do? ago.

A As Judge Maddela was rushing up then, he just ordered his Q At the time that the plaintiffs presented their witnesses, one
clerk to make the necessary insertion. I do not know with regards witness was presented, which is the Clerk of the Municipal Trial
Court of Bayombong by the name of Saturnino Galapon. My
 question, did you see that clerk who was subpoenaed to appear A Yes, Sir.
here and testified before about this Exh. "E"?
Q And, of course, you are not aware of any side agreement?
A Yes, Sir.
A In 1965, I had nothing to know of, Sir. 28

Q And can you tell the Honorable Court if that clerk who have
testified here before for the plaintiffs if he was the clerk whom you The Clerk of Court during the incumbency of Judge Tomas Maddela
were referring to as the one who was directed by Judge Maddela was Mariano Gonzales, who was already deceased at the time Galapon
to make [the] insertion in Exh. "E"? testified:

A He was the one. 27 ATTY. CORPUZ: ON RE-DIRECT

The claim of the respondents is incredible because Saturnino Galapon, Q Who is (sic) the Clerk of Court from whom you took over the
the Clerk of Court of the Municipal Trial Court of Bayombong, who position of Clerk of Court?
testified for the petitioners, declared that he was appointed to the
position during the incumbency of Judge Florante Tupasi: A The deceased MARIANO GONZALES, Sir.

ATTY. BAGASAO: ON CROSS- Q When you took over these 2 documents and the Notarial
Register Book No. V of Judge Maddela, were they all intact in the
Q Mr. Witness, when you begin (sic) your duty as Clerk of Court, office?
who is the Judge then?
A This is a part of the big file including the Notarial Register, Sir. 29

A Judge FLORANTE TUPASI, Sir.

Furthermore, Judge Maddela knew or should have known the legal
Q Meaning to say, Mr. Witness, Judge MADDELA was then out? implications of the alterations on the original copy of the Confirmatory
Deed of Sale without making the appropriate alterations in his own
A He transferred, Sir. copies of the deed, and could not have agreed to merely ordering the
clerk of court to make the alterations himself. Aside from the fact that
Q So, you were not the Clerk of Court of MTC, Bayombong, the copies of the deed retained by Judge Maddela do not contain any
30 

Nueva Vizcaya, during the time of Judge Maddela? alterations, the respondents failed to present Judge Tomas Maddela to
corroborate the testimony of respondent Maria Rivera.
While it is true that a notarized deed of sale is a public document and
has in its favor the presumption of regularity and that to contradict the
same, there must be evidence that is clear and convincing; the
evidence on record in this case is, however, so clear and convincing in
support of the finding that the assailed copy of the Confirmatory Deed G.R. No. 146523             June 15, 2006
of Sale has been altered and is, in fact, null and void.
SPOUSES ANICETO AND THELMA CIRELOS, Petitioners,
All told then, we find and so hold that the petitioners did not consent to vs.
the sale of Lot 1 to the respondents. One of the essential requirements SPOUSES WILLIAM G. HERNANDEZ, AND ROSEMARIE ZAFE AND
of a valid contract, including a contract of sale, is the consent of the THE HON. COURT OF APPEALS, Respondents.
owner of the property. Absent such consent, the contract is null and
31 

void ab initio. A void contract is absolutely wanting in civil effects; it is

32 
DECISION
equivalent to nothing. It produces no effects whatsoever either against
33 

AUSTRIA-MARTINEZ, J.:
or in favor of anyone; hence, it does not create, modify, or extinguish
the judicial relation to which it refers. In fine, the petitioners, not the
34 

Before this Court is a petition for review seeking the reversal of the
respondents, are the rightful owners of Lot 1.
Decision of the Court of Appeals (CA) in CA-G.R. CV No. 55835
promulgated on December 18, 2000,1 which affirmed the
Under Article 1410 of the New Civil Code, the action for the declaration
Decision2 dated May 8, 1996 of the Regional Trial Court (RTC) of
of the non-existence of a contract does not prescribe. Thus, the action
Quezon City, Branch 92 in Civil Case No. Q-93-15226.
of the petitioners for the declaration of the non-existence of the assailed
deed is imprescriptible.
On March 10, 1993, spouses Aniceto and Thelma Cirelos (petitioners)
filed a complaint for Breach of Contract, Annulment of Sale and
IN LIGHT OF THE FOREGOING, the petition is GRANTED. The
Damages before the RTC, against spouses William G. Hernandez and
decision of the Court of Appeals is REVERSED and SET ASIDE. The
Rosemarie Zafe (private respondents) alleging that: they are the
decision of the Regional Trial Court in Civil Case No. 207 is
registered owners of a house and lot located at No. 10 Kennedy Drive,
REINSTATED. No costs.
Tandang Sora, Quezon City, consisting of 302 square meters and
SO ORDERED. covered by TCT No. 244566; on March 5, 1991, petitioner Thelma
Cirelos (Cirelos) obtained a loan from respondent William Hernandez
(Hernandez), a money lender, in the amount of P450,000.00 and as
security therefor, executed a Deed of Real Estate Mortgage in favor of
Hernandez covering the said property; in order to effect the immediate After a careful study of the evidence of both parties, the Court finds that
release of the loan, Hernandez asked Cirelos to sign a blank bond the Deed of Absolute Sale covering the subject property is not
paper containing nothing but her name which Hernandez said will be fabricated by the defendants. First of all, plaintiff Thelma Cirelos alleges
converted into promissory note; on February 15, 1993, petitioners that defendant made her sign a blank paper from which the latter later
received a letter from respondents asking them to vacate the property on made on [sic] Deed of Absolute Sale. However, plaintiff admitted
because respondents already own the same; Cirelos went to the during trial that it was not her habit of signing blank papers although in
Register of Deeds and learned that there was already a Deed of Sale in this particular case, she claimed she signed a blank paper to effect the
favor of respondents annotated at the back of the title as Entry No. PE- immediate release of the loan. Furthermore, the paper used, the type of
2060/T-244566, PR-24978, and a Release of Real Estate Mortgage their contents, the signature of the parties, their subscribing witnesses
annotated as Entry No. PE-2059/TCT-244566, PR-23978; Cirelos also and of the notary public, as well as the spacing and the wordings
discovered that the blank paper she signed, which Hernandez said will thereof, the entry number in the notarial register, all these are
only be used as promissory note, was converted into a Deed of incontestable evidence that the document is what it purports to be.
Absolute Sale;3 moreover, the Deed did not have the consent of Second, Atty. Campos testified under oath in Court that both plaintiff
Aniceto, husband of Cirelos, and the Release of Real Estate Mortgage and defendant appeared and signed the deed of sale before him. In this
is fictitious as petitioners have not yet paid their loan.4 case, the presumption of regularity applies. Also, Atty. Campos is a
disinterested third party who will not risk his name as well as his
Respondents in their Answer countered that: Thelma did not sign any professional license for the benefit of his retaining client. Third, plaintiff
blank paper neither did they require her to do so; the execution of the admitted that defendant never made a demand on her to pay nor did
Release of Real Estate Mortgage and Deed of Absolute Sale was out of she ever offered [sic] to pay the debt. This may be premised on the fact
the free will and volition of petitioners who could no longer pay the loan that plaintiff already knew that she had executed a Deed of Absolute
plus interest;5 in the execution of the promissory note, Real Estate Sale over the lot in question in favor of defendant Hernandez due to her
Mortgage and Deed of Absolute Sale, Thelma was authorized by her inability to pay the debt. Another is the fact that plaintiffs never made
husband, Aniceto, through a power of attorney executed way back on any effort of reconstituting the original TCT which was burned during
January 27, 1990;6 and it is not true that petitioners learned of the sale the fire that occurred in the Quezon City Hall where it was kept. Such
only after receiving a letter from respondents’ lawyer dated February omission only shows that plaintiffs are no longer interested in the land.
15, 1993 and thereafter verifying with the Register of Deeds, because Finally, the letter of plaintiffs asking for an extension of time to vacate
as early as September 5, 1991, respondents’ counsel had been writing the premises is an admission and recognition of the right of the
petitioners asking them to vacate the property.7 defendants over the subject property.8

Trial ensued and on May 8, 1996, the RTC dismissed petitioners’ Petitioners appealed to the CA which denied their appeal, finding that:
complaint, based on the following findings: Cirelos’s testimony that she was made to sign a blank paper which will
be converted into a promissory note is not worthy of belief as there was or when it can be inferred that the real intention of the parties is to make
already a promissory note at the time the Real Estate Mortgage was the transaction secure the payment of a debt or the performance of any
executed; petitioners failed to impeach the credibility of Atty. Danilo other obligation; in this case, the market value of the house and lot
Campos (Atty. Campos), the notary public before whom the Deed of is P1.2 Million while the amount of the sale is only P450,000.00;
Absolute Sale was acknowledged and they were not able to overthrow petitioners remain in possession of the property despite the execution
the presumption that official duty has been regularly performed; of the assailed deed of absolute sale, and it was only in February 1993
respondents were able to present the questioned deed of sale which or a year and a half after the date of the purported sale that the
appeared to be genuine and untampered and petitioners were not able respondents demanded in writing that the petitioners vacate the
to present proof to the contrary other than Cirelos’s testimony; the RTC premises.12
correctly noted the failure of Cirelos to pay their debt despite the lapse
of reasonable length of time and her failure to take steps towards the Petitioners also claim that: the Deed of Absolute Sale is void as there
reconstitution of the burned title; gross inadequacy of the price does not was no cause or consideration;13 the consent of Cirelos was obtained
affect a contract of sale and there was no sufficient evidence to show through fraud as she was made to sign a blank bond paper in the
defect in consent or show an intent other than a contract of sale.9 pretext that it will be converted into a promissory note in favor of
Hernandez in his personal capacity;14 the sale also did not have the
Petitioners now come before this Court claiming that: consent of Cirelos’s husband, as the Special Power of Attorney (SPA)
relied upon by respondents were merely tampered with, i.e., the words
"[T]he judgment of the Honorable Court of Appeals is not in "sell", "absolute sale" and "sale" were written with another
accord with law; committed grave abuse of discretion in the typewriter;15 Atty. Campos, who notarized the Real Estate Mortgage, the
appreciation of the evidence on record; and the failure to apply or release thereof and the Deed of Absolute Sale is a biased witness since
the misapplication of the aforecited provisions of the Civil Code he is a retained counsel of respondents for eight years.16
and the Rules of Court."[10]
Petitioners pray that the entire records of the case be reviewed by this
Petitioners argue that: the true agreement between the parties is Court; that the decisions of the RTC and the CA be reversed and set
mortgage and not sale;11 there was lack of written demand on aside; that the Deed of Absolute Sale and Release of Real Estate
petitioners to comply with the mortgage agreement, thus the mortgage Mortgage be declared null and void; that respondents be ordered to
agreement subsists; the amount of the loan secured by the real estate comply with the terms and conditions of the Real Estate Mortgage; and
mortgage is the same amount stated in the deed of absolute sale; the that damages be awarded to petitioners, plus costs.17
CA failed to apply Art. 1602 of the Civil Code which provides that the
contract shall be presumed to be an equitable mortgage when the price Respondents filed an Answer18 to the petition asserting that the Deed of
is inadequate, when the vendor remains in possession of the property Absolute Sale is complete in all details as the object, subject matter and
consideration therefor are specified therein and the notary public before (2) the inference is manifestly mistaken, absurd or impossible; (3) there
whom the document was signed even testified to its regularity;19 that the is grave abuse of discretion; (4) the judgment is based on a
failure of petitioners to act on their alleged discovery of the transfer of misapprehension of facts; (5) the findings of fact are conflicting; (6)
title to respondents makes their claim hard to believe;20 that the decision there is no citation of specific evidence on which the factual findings are
of the trial court as affirmed by the CA has already settled the validity of based; (7) the finding of absence of facts is contradicted by the
the deed of sale on the basis of the credibility of the witnesses presence of evidence on record; (8) the findings of the CA are contrary
presented during trial;21 that the contents of the petition are evidentiary to the findings of the trial court; (9) the CA manifestly overlooked certain
in nature and no error of law was raised in this petition for review; and relevant and undisputed facts that, if properly considered, would justify
that the argument that the true agreement between the parties is a different conclusion; (10) the findings of the CA are beyond the issues
mortgage and not sale was raised for the first time in this Court.22 of the case; and (11) such findings are contrary to the admissions of
both parties.27
Petitioners filed a Reply23 and both parties filed their respective
Memoranda24 which reiterated their arguments on the matter. In the present petition, the Court finds no cogent reason to depart from
the general rule. The CA did not commit any reversible error in affirming
Stated simply, the arguments of petitioners are as follows: Cirelos’s the RTC.
signature in the Deed of Absolute Sale was obtained through fraud;
there was no consent from Cirelos’s husband; and the sale had no The Deed of Absolute Sale being impugned by petitioners is a public
cause or consideration. Petitioners also argue that at most, the sale document having been notarized by Atty. Campos. As a public
must be considered only as equitable mortgage as the amount stated in document, the deed has in its favor the presumption of regularity, and
the deed of sale is inadequate, petitioners remain in possession of the carries the evidentiary weight conferred upon it with respect to its due
property, and it took a year and a half after the date of the purported execution, i.e., it is admissible in evidence without further proof of its
sale before respondents demanded that petitioners leave the premises. authenticity and is entitled to full faith and credit upon its face.28 To rebut
the same, there must be evidence that is clear, convincing and more
The Court finds the petition devoid of merit. than merely preponderant; otherwise the document shall be upheld.29

As a rule, only questions of law are entertained by this Court in petitions In this case, all petitioners could offer by way of evidence was Cirelos’s
for review on certiorari under Rule 45 of the Rules of Court.25 It is not bare denial that she signed the subject deed of sale and her claim that
our function to analyze or weigh all over again the evidence what was given her to sign was a blank piece of paper which
presented.26 Indeed, the findings of fact of the trial court, especially Hernandez later turned into said deed. Such denial is insufficient to
when affirmed by the CA are binding and conclusive on us, unless: (1) overcome the positive value of the deed of sale which is a notarized
the conclusion is grounded on speculations, surmises or conjectures; document.30
As held in Veloso v. Court of Appeals,31 firsthand and note their demeanor, conduct and attitude under grilling
examination.35
Documents acknowledged before a notary public have the evidentiary
weight with respect to their due execution. The questioned x x x deed of Indeed, the assessment by the RTC of the credibility of witnesses is
sale, [was] notarized and therefore, presumed to be valid and duly entitled to great respect and weight for having had the opportunity of
executed.32 observing the conduct and demeanor of the witnesses while
testifying.36 The RTC found it unbelievable that Cirelos, who admitted
One who denies the due execution of a notarized document, has the that it is not her habit to sign blank papers, should sign a blank bond
burden of proving that contrary to the recital in the Acknowledgment, he paper which Hernandez purportedly later turned into an Absolute Deed
has never appeared before the notary public and acknowledged the of Sale. This was correctly affirmed by the CA which also noted that
deed to be his voluntary act.33 Cirelos’s story that Hernandez told her that the blank paper she signed
will be turned into a promissory note, is not worthy of belief as there
Cirelos testified that she has never seen Atty. Campos neither has she was already a promissory note (Exhibit "F") signed at the time the Real
signed any deed of sale in his presence. Atty. Campos however Estate Mortgage was executed.
testified that Cirelos appeared before him and signed the deed of sale
in his presence.34 Apart from the allegations of petitioners no other proof was presented to
justify a reversal or modification in the findings of the trial court which
Petitioners claim that since Atty. Campos is a retained counsel of had the occasion to see the deportment of the witnesses as they
Hernandez, his (Atty. Campos’s) testimony is biased and not worthy of testified in court.
belief. Petitioners also claim that Cirelos’s testimony is more credible
than that of Atty. Campos and that therefore, her testimony that her Petitioners further claim that the Deed of Absolute Sale is void since it
signature in the deed of sale was obtained through fraud must be given did not have the consent of Cirelos’s husband. It is true that in the sale
credence. of conjugal properties, the consent of both the husband and the wife is
required and the absence of the consent of one renders the entire sale
On this point, it is well to remind petitioners that: null and void including the portion of the conjugal property pertaining to
the spouse who contracted the sale.37
The oft-repeated principle is that where the credibility of a witness is an
issue, the established rule is that great respect is accorded to the
evaluation of the credibility of witnesses by the trial court. The trial court
is in the best position to assess the credibility of witnesses and their
testimonies because of its unique opportunity to observe the witnesses
In this case, while the Deed of Absolute Sale mentioned that Thelma Certificate of Title No. 244566 issued by the Register of Deeds of
Cirelos is "married to Aniceto Cirelos",38 and the Acknowledgment Quezon City, and more particularly bounded and described as follows:
thereof stated that it is "signed by the vendor (Cirelos) with the marital
consent of her spouse,"39 the Deed however does not actually contain TRANSFER CERTIFICATE OF TITLE
any signature of Aniceto showing his consent.
NO. 244566
In asserting that the Deed of Absolute Sale was executed by Cirelos
with the consent of her husband, respondents formally offered said SPA xxx
as Exhibit "7," pertinent portions of which read:
which parcel of land is our conjugal property but is registered in the
SPECIAL POWER OF ATTORNEY name of my wife, Thelma Morcilla Cirelos;

KNOW ALL MEN BY THESE PRESENTS: absolute sale aBC

That I, ANECITO40 CIRELOS, of legal age, Filipino, married to Thelma 2. To sign, execute and deliver any deed of /mortgage or instrument in
Morcilla Cirelos, and a resident of 19 Kennedy Drive, Pleasant View favor of the lender encumbering the above-described parcel of land to
Subdivision, Tandang Sora, Quezon City, have this day, named, any private individual, banking or financial institution with whom my said
appointed and constituted and by these presents do hereby NAME, ATTORNEY-IN-FACT may obtain the loan, under such terms and
APPOINT and CONSITUTE as my true and lawful ATTORNEY-IN- conditions as she may deem just and reasonable;
FACT, my wife, THELMA MORCILLA Cirelos, of legal age, Filipino, and
a resident of 19 Kennedy Drive, Pleasant View Subdivision, Tandang aBC
Sora, Quezon City, for me and my name, place and stead, to do and
perform any or all of the following acts or things, with the same force 3. To receive, sign for, acknowledge the proceeds of the sale
and legal effect as if I were personally present and could lawfully do the
same, to wit: loan obtained by virtue of this POWER OF ATTORNEY and to endorse
and encash any check or warrant that may be issued in lieu of cash for
sell, aBC the loan so obtained; and

1. To /secure, negotiate or obtain a loan from any private individual, HEREBY GIVING AND GRANTING unto my said ATTORNEY-IN-FACT
banking or financial institution, using as collateral a parcel of land full power and authority to do and perform any act or thing requisite or
situated in the District of Banlat, Quezon City, covered by Transfer necessary to be done in or about the premises with the same force and
legal effect as if I were personally present and could lawfully do the Under Rule 132, Section 31 of the Rules of Court, the party producing a
same and hereby CONFIRMING and RATIFYING all that my said document as genuine which has been altered, in a part material to the
ATTORNEY-IN-FACT may do or cause to be done by virtue of these question in dispute must account for the alteration. Said provision
presents. reads:

IN WITNESS WHEREOF, I have hereunto signed my name this 7th day Sec. 31. Alterations in document, how to explain. --- The party
of ___Jan.____, 1990, at ____________________. producing a document as genuine which has been altered and appears
to have been altered after its execution, in a part material to the
ACCEPTED: question in dispute, must account for the alteration. He may show that
the alteration was made by another, without his concurrence, or was
(sgd.) (sgd.) made with the consent of the parties affected by it, or was otherwise
THELMA MORCILLA CIRELOS ANECITO41 CIRELOS properly or innocently made, or that the alteration did not change the
Attorney-In -Fact42 Principal meaning or language of the instrument. If he fails to do that, the
document shall not be admissible in evidence.

Aniceto testified that the words "sell," "absolute sale" and "sale" were In this case, since it is the respondents who presented the SPA, the
not in the SPA when he signed it and that his intention was only to burden is on them to account for the alterations.
authorize his wife to mortgage and not to sell the property;43 he also
said that while his initials are ABC, he was not the one who placed the On this score, Atty. Campos, testifying for the respondents stated that
same in the SPA.44 while the Deed of Absolute Sale which he notarized involved a property
registered in the names of the spouses, and the deed was signed only
Cirelos testified that she gave her only copy of the SPA to Hernandez by Cirelos, he allowed the same, as an SPA (Exhibit "7") was shown to
when she mortgaged their property;45 and that when she gave the said him with the words "sell", "absolute sale", and "sale" with the
SPA to Hernandez the words "sell", "absolute sale", and "sale" were not initials ABC;48 and that said SPA was already annotated at the back of
yet inserted in the said document.46 the title49 as Entry No. 9115 and marked as Exhibits "1-B" and "1-B-1."50

Hernandez on the other hand testified that when Cirelos gave him the Entry No. 9115 reads:
SPA, there were already insertions and when he asked Cirelos about
them, Cirelos countered that it was made before the Notary Public Entry No. 9115/ T244566 x x x POWER OF ATTORNEY
when she had it notarized.47 In favor of THELMA M. CIRELOS______________________
With power to SELL, MORTGAGE____________________
 in behalf of ANECETO CIRELOS_______________________ This argument is raised for the first time by petitioners in view of the
Other conditions set forth in Doc. No. 131________________ ruling of the CA, to wit:
Page No. 38________Book No. 3_________of the Not. Public
of QUIRINO D. CARPIO_____________________________ In the instant case, no sufficient evidence to show defect in consent or
to show an intent other than a contract of sale was presented by
Date of Instrument _____1/27/90_______ appellants.52
Date of Inscription ______7/10/90______51
(Emphasis supplied) While the issue that the real contract between the parties is that of an
equitable mortgage may not be raised for the first time on
As respondents were able to show that there was already an annotation appeal,53 considering that said issue was triggered by the
on the title anent the SPA dated January 27, 1990 executed by Aniceto pronouncement of the CA, the Court will proceed to resolve the same to
in favor of Cirelos, with power to sell as well as mortgage, which was settle once and for all the controversy between the parties involving the
inscribed on July 10, 1990 or before Cirelos started transacting with subject property.
Hernandez, we find that respondents were able to comply with the
requirements of Rule 132, Section 31 and were able to show, by Petitioners’ claim is not meritorious.
convincing evidence that the insertions in the SPA were already
existing when it was given to them by Cirelos. Equitable mortgage, defined, is a contract that – although lacking the
formality, the form or words or other requisites demanded by a statute –
The claim of petitioners that the contract is void for lack of cause or nevertheless reveals the intention of the parties to burden a piece of
consideration also does not persuade the Court. As explained by real property as security for a debt. Its essential requisites are: (1) the
respondents, the parties changed their agreement from that of loan to parties enter into what appears to be a contract of sale; and (2) their
an absolute sale when petitioners could no longer pay their obligation. intention, however, is to secure an existing debt by way of a mortgage.54
The P450,000.00 loan was therefore converted to a purchase price
when the parties modified the agreement between them. While there is no single conclusive test to determine whether a deed
absolute on its face is really a simple loan accommodation secured by a
Petitioners further argue that even if a contract is an absolute sale on its mortgage,55 the Civil Code enumerates several instances when a
face, applying Art. 1602 of the Civil Code, still the agreement between contract is presumed to be an equitable mortgage, thus:
them and respondents should be considered as equitable mortgage
and not that of sale. Art. 1602. The contract shall be presumed to be an equitable mortgage,
in any of the following cases:
 1. When the price of a sale with right to repurchase is unusually Art. 1604. The provisions of Article 1602 shall also apply to a contract
inadequate; purporting to be an absolute sale.

2. When the vendor remains in possession as lessee or While there is a presumption in favor of equitable mortgage, such
otherwise; presumption, however, is not conclusive and may be rebutted by
competent and satisfactory proof to the contrary.58
3. When upon or after the expiration of the right to repurchase
another instrument extending the period of redemption or In this case, petitioners claim that the agreement between them is one
granting a new period is executed; of equitable mortgage for three reasons, i.e., there was inadequacy of
the price, they remained in possession of the property, and, their
4. When the purchaser retains for himself a part of the purchase intention was only that of mortgage and not sale.
price;
Petitioners’ claim that there was inadequacy of the price is not
5. When the vendor binds himself to pay the taxes on the thing supported by the evidence on record. They did not present any proof
sold; that the fair market value of the real property in the area at the time of
the transaction were much higher than the selling price of the lot in
6. In any other case where it may be fairly inferred that the real question. Mere allegation that the price paid is inadequate, without
intention of the parties is that the transaction shall secure the more, does not make a case favorable to petitioners.59
payment of a debt or the performance of any other obligation.
As held in San Pedro v. Lee60
In any of the foregoing cases, any money, fruits, or other benefit to be
received by the vendee as rent or otherwise shall be considered as Absent any evidence of the market value of the locale as of the date of
interest which shall be subject to the usury laws. the contract, it cannot be concluded that the price at which the property
was sold x x x was grossly inadequate. Mere inadequacy of price would
The presence of even just one of the circumstances set forth in this not be sufficient. The price must be grossly inadequate, or purely
provision suffices to convert a contract to an equitable mortgage.56 No shocking to the conscience.61
concurrence or an overwhelming number is needed.57
Cirelos, in her testimony, not only failed to present sufficient evidence,
Article 1604 of the Civil Code provides: she even admitted her uncertainty as to the real value of the property at
the time of the sale.62
Petitioners also claim that since they remained in possession of the receipts and registry return cards, the authenticity of which respondents
property, the presumption of equitable mortgage should govern. did not question.70

It is true, that where the vendor remains in physical possession of the Thus, respondent had shown by preponderance of evidence that the
land as lessee or otherwise, the contract should be treated as an possession of petitioners of the subject property after the date of the
equitable mortgage.63 absolute sale is without the acquiescence of respondents.

Respondents presented proof however that as early as September 5, The Court also notes that, as admitted by Cirelos in her testimony,
1991, or more than a month from July 30, 1991, the date of the deed of petitioners have not been paying real estate taxes for the lot since 1990
sale, they already sent a letter to petitioners asking them to vacate the up to the time of her testimony in 1993.71 In Bernardo vs. Court of
premises.64 Reacting thereon, Cirelos went to Hernandez personally Appeals,72 this Court noted that a party’s nonpayment of realty taxes on
and requested for more time;65 she then made a handwritten letter dated the subject land from the time the document of sale was signed, was
January 14, 1992 which reads: inconsistent with his claim of continued ownership.73

Sir, Thus, having no cogent reason to reverse the ruling of the CA, the
Court is constrained not to grant the present petition.
Kung maari po pag bigyan ninyo ako hanggan Feb. 15, 1992 at
gumagawa po ako ng paraan. Sana po maunawaan ninyo ako. Salamat WHEREFORE, the petition is DENIED for lack of merit.
po.
Costs against petitioners.
Lubos na gumagalang,

Mrs. Cirelos Cirelos66

Respondents sent another demand letter by registered mail dated

January 15, 199267 which petitioners still did not heed. Respondents
then sent a third letter, dated February 15, 1993 again asking that
petitioners vacate the premises.68 It is only the third letter which
petitioners claimed to have received.69 However, respondents presented
the first two letters to the trial court with their corresponding registry