Facts:
1. Lorna Tampan-Naldoza purchased a residential house and lot from Socorro Cabilao, covered by TCT No. T-59, through a Deed of Absolute Sale of a Residential Land together with a House, in the amount of Pl0,000.00.
2. Since Lorna was in the United States, her mother, Antonieta, purchased the property on her behalf.
3. Then Lorna decided to have TCT No. T-59 registered in her name but she discovered that the owner's duplicate got lost while it was kept by Judith Tampan-Montinola in the house.
4. Thereafter, Lorna, through Judith, filed a petition for the issuance of a new owner's duplicate. However, spouses Lapulapu and Lelita Buyser opposed her petition on the ground that they were in possession of the said title after buying the same from Socorro.
5. Lorna and Judith lodged a complaint for declaration of nullity of a pacto de retro sale entered into between Socorro and spouses Buyser.
6. Socorro, on the otherhand filed an action for Annulment or Cancellation of Document, Quieting of Title/Recovery of Ownership and Possession, Injunction, and Damages with Prayer for Preliminary Injunction and Temporary Restraining Order against Loma and Danilo Tampan.
a. She alleged that she was the absolute and registered owner of the subject property which was in her possession. Moreover, she sold the subject property through a pacto de retro sale to Enriqueta Baybayon for P89,000.00, and to Lelita. During both transactions, she surrendered her owner's copy of TCT to Enriqueta and Lelita.
b. As an illiterate person, Socorro claims that she does not understand English and while the purported deed of sale bears her signature, the same was obtained through fraud by the Tampans in the guise of signing loan documents whenever she borrowed money.
c. Socorro further claims that her possession over the owner's duplicate copy of the TCT is inconsistent with any intention to convey ownership to another.
Issues:
· Whether or not the consent of Socorro was obtained through fraud.
· Whether or not the gross inadequacy of the price rendered the Deed of Sale void.
· Whether or not the late transfer of the title over the subject property to the buyer despite the execution of the Deed of Sale will affect the validity of the sale
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Ruling:
The Supreme Court held that the Deed of Sale between Loma and Socorro is valid.
Article 1305 of New Civil Code (NCC) provides that a contract is "a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service."
The essential requisites are:
(1) consent of the contracting parties;
(2) object certain which is the subject matter of the contract; and
(3) cause of the obligation which is established.
In the present case, all the elements of a valid contract are present. In the case at bar, the Deed of Sale validly transferred the ownership over TCT No. T-59 from Socorro to Lorna in consideration of Pl0,000.00.
Allegation of fraud
It is a well-settled rule that a duly notarized document enjoys the prima facie presumption of authenticity and due execution, as well as the full faith and credence attached to a public instrument.
Thus, a party assailing the authenticity and due execution of a notarized document is required to present evidence that is clear, convincing and more than merely preponderant. Here, Socorro failed to overcome this burden. Aside from her self-serving allegation that she did not know that she was signing a Deed of Sale, there is nothing else on record that supports her assertion.
While Socorro claims that she is an illiterate person, she failed to prove this fact. When a party claims that one is unable to read or is otherwise illiterate, and fraud is alleged, a presumption that there is fraud or mistake in obtaining consent of that party arises under Article 1332 of the NCC.
However, for Article 1332 to be applicable, the contracting party who alleges fraud or vitiated consent must establish the same by full, clear and convincing evidence. Here, there is nothing in Socorro's testimony showing that she cannot read English or that she was illiterate. To the contrary, the pacto de retro sales that she entered into with Enriqueta and Lelita, respectively, indicate that she is able to read, affix her signature, freely give her consent and enter into contracts.
Allegation of gross inadequacy of price
It is also of no moment that the consideration was in the amount of Pl0,000.00. Gross inadequacy of price does not 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. Inadequacy of cause will not invalidate a contract unless there has been fraud, mistake or undue influence. As earlier stated, fraud was not proven. Hence, the consideration in the amount of Pl0,000.00 did not invalidate the sale.
Late transfer of title
The Supreme Court note that the title over the subject property remained under Socorro's name despite the execution of the Deed of Sale. However, this does not also affect the validity of the deed of sale. Transfer of the certificate of title in the name of the buyer and transfer of ownership to the buyer are two different concepts. Between the seller and buyer, ownership is transferred not by the issuance of the new certificate of title in the name of the buyer but by the execution of the instrument of sale in a public document.
The sale was already perfected upon the execution of the Deed of Sale before Atty. Mantilla.
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