G.R. No. 190234, August 07, 2017

FORMER SPECIAL FIRST DIVISION

[ G.R. No. 190234, August 07, 2017 ]

JULIE ENRIQUEZ BANGAYAN-BANZON JOINED BY HER HUSBAND, NERIO BANZON, PETITIONER, V. TRANQUILINA ENRIQUEZ VDA. DE BANGAYAN, CELESTINO E. BANGAYAN, FLORINDA BANGAYAN, ZEN AID A E. BANGAYAN, LOURDES B. SING, ALFREDO E. BANGAYAN, ALBERTO E. BANGAYAN, ALICIA E. BANGAYAN, ELSA E. BANGAYAN, AND DAISY B. AQUINO, RESPONDENTS.

Sirs and Mesdames:

Please take notice that the Court, First Division, issued a Resolution dated  August 7, 2017 which reads as follows:"G.R. No. 190234 (JULIE ENRIQUEZ BANGAYAN-BANZON joined by her husband, NERIO BANZON, Petitioner, v. TRANQUILINA ENRIQUEZ vda. de BANGAYAN, CELESTINO E. BANGAYAN, FLORINDA BANGAYAN, ZEN AID A E. BANGAYAN, LOURDES B. SING, ALFREDO E. BANGAYAN, ALBERTO E. BANGAYAN, ALICIA E. BANGAYAN, ELSA E. BANGAYAN, and DAISY B. AQUINO, Respondents.) - Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Revised Rules of Court seeking to nullify and set aside the Court of Appeals (CA) Decision[2] in CA-G.R. CV No. 74774-MIN. The CA reversed and set aside the Decision of the Regional Trial Court (RTC) Branch 16, Zamboanga City.

THE ANTECEDENTS

The controversy originated from a family squabble over a lot covered by Transfer Certificate of Title (TCT) No. T-82,254 transferred and registered in the name of petitioner Julie Enriquez Bangayan-Banzon.[3] Prior to the transfer, the lot was registered in the name of the late Pablo Bangayan, married to respondent Tranquilina Bangayan. It was then covered by TCT No. T-41,672.[4] The couple allegedly acquired the lot sometime in 1950 and established their family home thereon.[5] It was where their 11 children grew up -among them, the other private respondents and petitioner Julie.[6]

On 31 July 1978, the spouses Pablo and Tranquilina mortgaged the subject lot to Banco Filipino Savings and Mortgage Bank for P373,000.[7] Subsequently, the lot was transferred to Julie on the basis of a Deed of Absolute Sale with Assumption of Mortgage (Deed), which appears to have been executed on 14 January 1986 and notarized on 20 January 1986.[8] The Deed was signed by Pablo as vendor with the marital consent of Tranquilina and by Julie as vendee. On 18 August 1986, TCT No. T-82,254 was issued in the name of Julie in lieu of TCT No. T-41,672, which was cancelled.[9]

Pablo was stricken with cancer sometime in January 1986[10] and eventually died on 30 July 1986.[11]

Tranquilina and her children Celestino, Florinda, Zenaida, Lourdes, Alfredo, Alberto, Tita, Alicia, Elsa and Daisy filed a Complaint[12] before the RTC of Zamboanga City dated 10 November 1995 for Cancellation of Title TCT No. T-82,254 and Sales and Recovery of Real Property.[13] The complainants prayed for the cancellation of TCT No. T-82,254, as well as for the issuance of a new title in their names.[14] They alleged that Julie had asked Tranquilina to sign the Deed without explaining its contents to the latter.[15] They also alleged that Tranquilina never received the amount of P10,000 as stated in the Deed and that she and Pablo never appeared before the notary public who had notarized the Deed.[16]

In their Answer,[17] Julie stated that it was Pablo's decision to dispose of the subject property in her favor.[18] She maintained that her family had full knowledge of the transfer of its title to her name.[19] She also argued that the Complaint filed against her was barred by laches, and that the complainants had no legal personality to file the case.[20]

THE RTC DECISION

On 16 March 2001, the RTC Branch 16 of Zamboanga City rendered its Decision[21] in Civil Case No. 453 (4487), the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of defendants and against the plaintiffs as follows:

1. Dismissing plaintiffs' complaint and upholding the validity of the Deed of Sale with Assumption of Mortgage dated January 14, 1986;
   
   
2. Denying plaintiffs' prayer for the cancellation of T.C.T. No. T-82,254 in the name of defendant Julie Enriquez Bangayan; and
   
   
3. Dismissing defendants' counterclaim for damages, attorney's fees and litigation expenses and for costs. SO ORDERED.[22]

The RTC held that the signatures of Pablo and Tranquilina appearing on the subject Deed were genuine and that both signatories fully understood its contents.[23] The trial court also ruled that the plaintiffs failed to overcome by clear and convincing evidence the probative value of the Deed as a public document.[24] Furthermore, consideration was found present consisting of the selling price of P10,000 stated in the Deed, the assumption by Julie of the mortgage indebtedness of Pablo amounting to P373,000, plus the money spent by her for the medical treatment of her father.[25] Lastly, the RTC said that the action was barred by laches and the statute of limitations.[26]

The plaintiffs in Civil Case No. 453 (4487) filed their appeal on 3 April 2001, assailing the RTC Decision.[27] In their Appellants Brief,[28] they reiterated that because there was no evidence of their receipt of the P10,000 selling price, the subject contract was void for lack of cause or consideration.[29] Aside from claiming non-receipt of the amount, they argued that the selling price was grossly inadequate. They went on to conclude that there was never any intention to sell the subject property.[30] Its transfer to Julie's name was allegedly simulated, considering that the property remained in their physical possession. They alleged that Julie never made any attempt to take possession of the property, and that they were the ones who collected rentals for the lease of portions of it.[31]

Respondents also argued that their action for the cancellation of TCT No. T-82,254 and the recovery of the property could not be barred by laches or the statute of limitations. They claimed that they only came to know of the sale and transfer of the property in favor of Julie sometime before 4 May 1995. Thus, the filing of the Complaint on 21 December 1995 was timely.[32]

Julie denied the allegation that the sale was simulated. She countered that she and her father intended to be bound by the contents of the assailed Deed; her assumption of the mortgage supposedly indicated her clear intention to be bound by the agreement. She reiterated her claim that she had paid P10,000 and assumed the mortgage indebtedness to the Banco Filipino Savings and Mortgage Bank. In her view, the bank itself refuted the alleged simulation.[33]

Julie also denied that she had not performed acts of ownership over the subject property, e.g., her payment of the mortgage indebtedness in full. Further, she alleged that she had mortgaged the subject lot to Zamboanga City Rural Bank for P200,000 in October 1993 and to Westmont Bank for P500,000 sometime in 1995.[34] Likewise, she also restated her claim that the action against her was barred by laches and prescription.[35]

THE CA DECISION

On 27 March 2009, the CA reversed and set aside the RTC Decision, thus:

WHEREFORE, premises considered, the Decision of the Regional Trial Court Branch 16, Zamboanga City dated March 16, 2001 is REVERSED AND SET ASIDE. Judgment is hereby rendered declaring the deed of sale in favor of defendant Julie null and void and of no force and effect thereby ordering the cancellation of Transfer Certificate of Title No. 82,254 of the Register of Deeds of Zamboanga City and to declare plaintiff Tranquilina Enriquez Vda. De Bangayan as rightful owner thereof and a new Transfer Certificate of Title to the property subject matter of the suit be issued in plaintiffs name. Defendant Julie is further directed to pay the cost of the suit.

SO ORDERED.[36]

The CA ruled that the subject Deed was null and void ab initio for the absence of consideration.[37] It found that there was no evidence of receipt by Pablo and Tranquilina of the P10,000 selling price, and that the said amount was grossly inadequate.[38] In light of these findings, the appellate court held that there was never any intention to transfer title and ownership of the subject property.[39]

The CA also dismissed the allegation that the action against Julie was barred by laches. It observed that the argument that Tranquilina abandoned her right to claim the property was negated by her prompt action. She asked her son Alfredo to check the title to the subject lot with the Register of Deeds right after she learned that a new title had been issued in the name of Julie.[40] Tranquilina even called all her children to a meeting to settle the matter among themselves, but Julie was not amenable to her plan.[41]

Julie, joined by her husband, filed a Motion for Reconsideration on 26 June 2009, but it was denied by the CA in a Resolution dated 5 October 2009.[42]

Hence, this Petition.

OUR RULING

The main controversy in this case is the determination of the true intention of the parties in the execution of the subject Deed.

Petitioners argue that consideration was present in the execution of the assailed Deed as shown by the P10,000 selling price and the assumption of the mortgage indebtedness amounting to P373,000 plus the expenses incurred by Julie in getting medical treatment for her sick father.[43] They also argue that the gross inadequacy of the price in a contract of sale does not render the sale void, but merely makes it voidable or rescissible.[44] They further aver that the CA's declaration that there was no intention to transfer title of ownership disregarded the integrity accorded to public documents and the legal presumption in favor of the validity of contracts.[45]
In their Comment,[46] respondents reiterate that there was no intention to transfer ownership of the subject property. This claim was supposedly confirmed by Julie's own admission in her testimony that the property had merely been entrusted to her.[47]

We partly agree with petitioners.

First, as to the defect found by the appellate court that there is absence of consideration, it was worth mentioning that the Deed provided for an assumption of mortgage with Banco Filipino Savings and Mortgage Bank. This being the case, even assuming that the alleged purchase price of P10,000.00 was never received by Tranquilina or Pablo, it would not make the Deed altogether void.

Petitioner likewise pointed out that gross inadequacy of price by itself will not result in a void contract. We agree. Gross inadequacy of price does not even affect the validity of a contract of sale, unless it signifies a defect in the consent or that the parties actually intended a donation or some other contract.[48]

Petitioners assail the conclusion of the CA that there was no intention to transfer ownership of the subject property. They rely on their argument that the Deed is an authentic document duly signed by the parties and acknowledged before a notary public and insist that it enjoys the presumption of validity in the absence of evidence sufficient to overcome the presumption.[49] Indeed, the notarization of a deed of sale indeed vests in its favor the presumption of regularity.

The Court has held that one who denies the due execution of a deed where one's signature appears has the burden of proving that contrary to the recital in the jurat, one never appeared before the notary public and acknowledged the deed to be a voluntary act.[50] We have also held that a notarized instrument is admissible in evidence without further proof of its due execution, is conclusive as to the truthfulness of its contents, and has in its favor the presumption of regularity.[51] Tranquilina failed to overcome this presumption by mere assertion that the Deed was not explained to her. She did not offer any reason for the need to explain the contents of the Deed.

Nevertheless, in the interest of substantial justice, this Court finds an application of implied trust in this case. The intention is determined not only from the express terms of the agreement, but also from the contemporaneous and subsequent acts of the parties.[52]

Julie's real objective in transferring the title of the subject lot to her name was evident in her own testimony. She said:

xxx So then, later on it was already January 1986, that was the time we have also a family problem regarding my father because, I overheard in the telephone that my father was talking to his mistress and so it has affected our family problem. So me, Daisy and Zenaida, decided to have the title entrusted to me because during that time, there was this [F]amily [C]ode according to them it will be unfair. Why will we give shares to the illegitimates? So Zenaida, my elder sister brought me to Atty. Go for this deed of sale.[53] (Emphasis supplied)

It appears that the original plan was to entrust the subject lot's title to Julie by transferring it to her name, in order that the alleged children of Pablo with another woman would not be given any share in the property. This, to the mind of the Court, is an admission of the existence of implied trust. Article 1453 of the Civil Code thus applies in this case. It provides:

Art. 1453. When property is conveyed to a person in reliance upon his declared intention to hold it for, or transfer it to another or the grantor, there is an implied trust in favor of the person whose benefit is contemplated.

By her own admission, it clearly shows that petitioner Julie merely held the subject property in favor of her siblings and mother Tranquilina. To bolster this, it is worth noting that respondents remained in physical possession, enjoyment and use of the subject property. Petitioner Julie never made any attempt to take possession of it.Even the rentals for the lease of portions of the building were collected by respondents through respondent Elsa Bangayan. These facts strengthen the application of implied trust.

Implied trust is founded on equity,[54] thus, reconveyance of the property is an appropriate remedy for the parties. An action for reconveyance based on an implied trust seeks to compel the registered owner to transfer the property to its true owner.[55] In this case, the true owner is the conjugal partnership of Tranquilina and Pablo. Therefore, by virtue of the implied trust created by the parties, the subject property must be transferred back to the conjugal partnership. Upon the death of Pablo, his right over his share of the property was automatically transmitted to his heirs.

Should petitioner be so minded, remedies are open for recovery of the alleged moneys she had parlayed, whether for the mortgage obligations or for the hospital expenses of her late father. This may properly be claimed in the settlement of the estate of Pablo. This will address the injustice she claims will be occasioned by an order of reconveyance.

WHEREFORE, the Petition is PARTLY GRANTED. The Court of Appeals Decision dated 27 March 2009 is hereby AFFIRMED with MODIFICATION to order petitioner Julie to reconvey the property covered by Transfer Certificate of Title No. 82,254 of the Register of Deeds of Zamboanga City to the conjugal partnership of Tranquilina and Pablo. The order of the CA against petitioner Julie to pay the cost of suit is hereby set aside.

SO ORDERED."

Very truly yours,

(Sgd.) EDGAR O. ARICHETA
Division Clerk of Court

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[1] Rollo, pp. 4-11.

[2] Id. at 15-28. Penned by Associate Justice Ruben C. Ayson and concurred in by Associate Justices Rodrigo F. Lim, Jr. and Michael P. Elbinias; dated 27 March 2009.

[3] Id. at 36.

[4] Id. at 41.

[5] Id. at 81-82.

[6] Id. at 82.

[7] Id. at 16.

[8] Id. at 47-49.

[9] Id. at 50-51.

[10] Id. at 36.

[11] Id. at 46.

[12] Docketed as Civil Case No. 453 (4487).

[13] Rollo, pp.35-40.

[14] Id. at 38.

[15] Id. at 36.

[16] Id. at 36-37.

[17] Id. at 53-62.

[18] Id. at 56.

[19] Id. at 56-57.

[20] Id. at 57-58.

[21] Id. at 81-94. Penned by Judge Jesus C. Carbon, Jr.

[22] Id. at 121.

[23] Id. at 90.

[24] Id. at 91.

[25] Id. at 92.

[26] Id. at 93-94.

[27] Id. at 18.

[28] Id. at 95-116.

[29] Id. at 107.

[30] Id.

[31] Id. at 115.

[32] Id. at 116.

[33] Id. at 126.

[34] Id. at 127.

[35] Id. at 128-134.

[36] Id. at 27.

[37] Id.

[38] Id. at 19.

[39] Id. at 20.

[40] Id. at 26.

[41] Id.

[42] Id. at 29-34.

[43] Id. at 9.

[44] Id. at 9-10.

[45] Id. at 10-11.

[46] Id. at 182-193

[47] Id. at 185-186.

[48] Sta. Fe Really, Inc. v. Sison, G.R. No. 199431, 31 August 2016.

[49] Rollo, pp. 10-11.

[50] Santos v. Lumbao, 548 Phil.332 (2007).

[51] China Banking Corporation v. Lagon, 527 Phil. 143 (2006).

[52] Heirs of Policronio M. Ureta, Sr. et al v. Heirs of Liberato M. Ureta, et al., 673 Phil. 188, 212 (2011)

[53] Rollo, p. 88-89.

[54] Heirs of Candelaria v. Romero, 109 Phil. 500-504 (1960).

[55] Spouses Aboitiz v. Spouses Po, G.R. Nos. 208450 & 208497, 5 June 2017.