REPUBLIC OF THE PHILIPPINES

Court Of Appeals
Manila

EIGHTH DIVISION
*** ***

TEODORA CALLANTA, *CA-G.R. CV No. 115225

WILFREDO C. GUTIERREZ,
MANUEL C. GUTIERREZ, as Members:
Attorney-in-fact of ROSITA C.
GUTIERREZ, BARRIOS, M. M., Chairperson
Plaintiff-Appellees, ATAL-PAÑO, P.S.T., and
DE LEON, M.M., JJ.

-versus-
Promulgated:
ELSA ESTIL DELA CRUZ and
BENJAMIN GARCIA, ____________________
Defendants-Appellants.

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DECISION

DE LEON, J:

Challenged in this Appeal1 is the August 14, 2020 Decision2

rendered by the Regional Trial Court (RTC), Branch 40 of Dagupan
City, in Civil Case No. 2011-0190-D. The dispositive portion of the
said Decision3 reads:

WHEREFORE, premises considered, judgment is hereby rendered

finding that there was no valid transfer of title to Benjamin Garcia since
Alejandra C. Entil was no longer the owner of the subject property at the

* Raffled on May 4, 2022 as part of the Ponente's Initial Case Load and the Records and Rollo were
transmitted to this Office on May 5, 2022.
1 Rollo, p. 15.
2 Id. at 38-49.
3 Id.
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time of the execution of the Deed of Absolute Sale. Accordingly,

1. the defendants are hereby DIRECTED to surrender TCT No.

14042 to the plaintiffs immediately upon the finality of this decision; and
2. defendant Benjamin Garcia is hereby DIRECTED to vacate the
subject premises and to peacefully turn over the same to the plaintiffs
immediately upon the finality of this decision.

SO ORDERED.

THE FACTS

The case stemmed from a Complaint 4 for declaration of nullity

of documents filed by plaintiffs-appellees Teodorda Callanta,
Wilfredo C. Gutierrez, Rosita C. Gutierrez, as represented by Manuel
C. Gutierrez, against defendants-appellants Elsa Estil Dela Cruz and
Benjamin Garcia.

As culled from the records, the facts are as follows:

The subject property is a parcel of land situated in Arellano

Bani, Pantal, Dagupan City covered by Transfer Certificate of Title
No. 140425 (TCT No. 14042) registered under the name of Spouses
Maximo Ceralde and Francisca Solar.

According to plaintiffs-appellees, upon the death of their

parents, they, Teodora C. Callanta (Teodora), Rosita C. Gutierrez
(Rosita), Alejandra C. Estil (Alejandra), and Benita C. Reyes (Benita),
being the surviving heirs, executed a Deed of Extra Judicial
Settlement with Quitclaim6 dated January 22, 2009, wherein they
partitioned the subject property, pro indiviso, among themselves. In
the same instrument, Alejandra and Benita ceded their respective
shares, by way of quitclaim, in favor of Teodora and Rosita.

Plaintiffs-appellees posited that while the said Deed 7 was duly

4 Records, pp. 1-6.
5 Id. at 12.
6 Id. at 8-11.
7 Supra Note 4.
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notarized, they were not able to register the same because defendant-
appellant Elsa Estil Dela Cruz (Elsa) borrowed the title from them
and never gave it back. They later found out that defendant-
appellant Elsa gave the title to defendant-appellant Benjamin Garcia
(Benjamin). Consequently, plaintiffs-appellees sent a Demand Letter8
to defendants-appellants for the return of the title. However, the
latter refused and instead of surrendering the title to them, they
received a letter from one Atty. Tolete stating that the 1/3 of the
subject property was already sold to defendant-appellant Benjamin.
Thereafter, defendant-appellant Benjamin showed to them an
undated and un-notarized Deed of Absolute Sale 9 purportedly
executed by Alejandra in his favor.

For their part, defendants-appellants claimed that the subject

property was sold by Alejandra in favor of defendant-appellant
Benjamin through a Deed of Absolute Sale10 which was executed,
signed, and thumb-marked by the latter. Defendant-appellant
Benjamin submitted that he was not able to have the said deed
notarized and registered because he needed time to raise the amount
of capital gains tax and the cost of registration. According to
defendant-appellant Benjamin, he has no knowledge about quitclaim
Alejandra executed with respect to her share in the subject property.

On August 14, 2019, the RTC rendered the assailed Decision 11

declaring that there was no valid transfer of title between Alejandra
and defendant-appellant Benjamin since Alejandra is no longer the
owner of the subject property at the time of the alleged sale. The RTC
ratiocinated in this wise:

Alejandra C. Entil [sic] signed two (2) separate deeds in different

occasion, one is the Extrajudicial Settlement of Estate with Quitclaim
and the other is a Deed of Absolute Sale. While this is the case, it appears
from the evidence presented that the former was executed ahead of the
latter. On this score, it is concluded that Alejandra C. Entil [sic] has
already parted ways with her property upon the execution of the
Extrajudicial Settlement of Estate with Quitclaim. She never, in her
lifetime, initiated any action to re-acquire the said property.
8 Id. at 13.
9 Id. at 14-15.
10 Id.
11 Supra Note 2.
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Consequently, while she again executed a Deed of Absolute Sale, the same
was never consummated because the property subject matter of the sale
was no longer hers. Accordingly, while the Deed of Absolute Sale was
perfected, it remained, and will remain, unconsummated. Alejandra C.
Entil [sic], in her lifetime, failed to validly transfer title to Benjamin
Garcia.12

Hence, this appeal.

THE ASSIGNMENT OF ERRORS

IN COMPLETE DISREGARDS [SIC] OF THE FACTS AND

EVIDENCE ON RECORD AND APPLICABLE
JURISPRUDENCE, THE TRIAL COURT SERIOUSLY ERRED
IN:

1. IN HOLDING THAT THE SALE MADE BY

ALEJANDRA C. ESTIL IN FAVOR OF
DEFENDANT-APPELLANG BENJAMIN GARCIA
HAS NO FORCE AND EFFECT THAT THE
LATTER DID NOT ACQUIRED [SIC] ANY RIGHT
OVER THE SAID SHARE;

2. DISREGARDING THAT DEFENDANT-

APPELLANT BENJAMIN GARCIA AS
PURCHASER IN GOOD FAITH;

3. IN ORDERING THE DEFENDANTS-

APPELLANT TO SURRENDER THE TCT 14042
AND TO VACATE THE SUBJECT PROPERTY.13

THE COURT'S RULING

The appeal should be denied.

It is a hornbook doctrine that the findings of fact of the trial

court are entitled to great weight on appeal and should not be
disturbed except for strong and valid reasons, because the trial court
12 Id.
13 Rollo, p. 23.
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is in a better position to examine the demeanor of the witnesses while

testifying.14 This Court see no such reason to deviate from the
findings of the RTC in this case.

An analysis of the facts obtaining in this case, the evidence

presented as well as the testimonies of the parties, irresistibly leads to
the conclusion that as aptly pointed out by the RTC, the Extra-
Judicial Settlement with Quitclaim15 was executed by Alejandra
ahead of the Deed of Absolute Sale16 she likewise executed in favor of
defendant-appellant Benjamin.

Here, it is undisputed that the Extra-Judicial Settlement with

Quitclaim17 was executed by Alejandra, together with her co-heirs, on
January 22, 2009. While, defendant-appellant Benjamin is claiming
that the Deed of Absolute Sale18 in his favor was allegedly executed
by Alejandra on November 2008, he failed to present any evidence to
prove such claim.

In civil cases, basic is the rule that the party making allegations
has the burden of proving them by a preponderance of evidence.
Preponderance of evidence is the weight, credit, and value of the
aggregate evidence on either side and is usually considered to be
synonymous with the term"greater weight of the evidence"or "greater
weight of the credible evidence." It is a phrase which, in the last
analysis, means probability of the truth, or evidence which is more
convincing to the court as worthier of belief than that which is
offered in opposition thereto.19

Thus, this creates is a serious legal obstacle to such sale,

rendering it impossible for Alejandra to perform its obligation as
seller to deliver and transfer ownership of the portion of the subject
property since, as discussed elsewhere, she is no longer the owner of
said portion of the subject property because of the quitclaim she
executed on January 22, 2009.

14 Tayco vs. Heirs of Concepcion Tayco-Flores, G.R. No. 168692, December 13, 2010.
15 Supra Note 6.
16 Supra Note 9.
17 Id.
18 Supra Note 9.
19 Spouses Ramos v. Obispo and Far East Bank and Trust Company,G.R. No. 193804, February 27, 2013.
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Nemo dat quod non habet, as an ancient Latin maxim says. One
cannot give what one does not have. In applying this precept to a
contract of sale, a distinction must be kept in mind between the
"perfection" and "consummation" stages of the contract.

A contract of sale is perfected at the moment there is a meeting

of minds upon the thing which is the object of the contract and upon
the price.20 It is, therefore, not required that, at the perfection stage,
the seller be the owner of the thing sold or even that such subject
matter of the sale exists at that point in time. 21 Thus, under Art. 1434
of the Civil Code, when a person sells or alienates a thing which, at that
time, was not his, but later acquires title thereto, such title passes by
operation of law to the buyer or grantee. However, under Art. 1459,
at the time of delivery or consummation stage of the sale, it is
required that the seller be the owner of the thing sold. Otherwise, he
will not be able to comply with his obligation to transfer ownership
to the buyer. It is at the consummation stage where the principle of
nemo dat quod non habet applies.

In this case, the alleged sale by Alejandra to defendant-

appellant Benjamin of her portion of the subject property after she
executed a quitclaim in favor of Teodora and Rosita must, therefore,
be deemed a nullity for she no longer have a valid title to the said
portion of the subject property at the time of the alleged sale.
Moreover, the Deed of Absolute Sale22 not having been properly and
validly notarized cannot be considered a public document. It is an
accepted rule, however, that the failure to observe the proper form
does not render the transaction invalid. It has been settled that a sale
of real property, though not consigned in a public instrument or
formal writing is, nevertheless, valid and binding among the parties,
for the time-honored rule is that even a verbal contract of sale or real
estate produces legal effects between the parties.23

Not being considered a public document, the deed is subject to

the requirement of proof under Section 20,Rule 132 of the Rules of
20 Civil Code, Art. 1475.
21 Cavite Development Bank, et.al.v. Sps. Lim, G.R. No. 131679, February 1, 2000.
22 Supra Note 9.
23 IVQ Landholdings, Inc. v. Barbosa, G.R. No. 193156, January 18, 2017.
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Court, which reads:

Section 20. Proof of private document. - Before any private document
offered as authentic is received in evidence its due execution and
authenticity must be proved either:

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of

the maker.

Any other private document need only be identified as that which it is

claimed to be.

Accordingly, the party invoking the validity of the deed of

absolute sale had the burden of proving its authenticity and due
execution. Unfortunately, defendant-appellant Benjamin likewise
failed in this respect, thus, he cannot invoke its validity in
establishing his claim of ownership over the portion of the subject
property.

Anent defendants-appellants' argument that Benjamin is a

buyer in good faith, thus, his title as innocent purchaser and for value
will not in any way be affected

We are also not convinced.

To prove good faith, a buyer of registered and titled land need

only show that he relied on the face of the title to the property. He
need not prove that he made further inquiry for he is not obliged to
explore beyond the four corners of the title. Such degree of proof of
good faith, however, is sufficient only when the following conditions
concur: first, the seller is the registered owner of the land; second, the
latter is in possession thereof; and third, at the time of the sale, the
buyer was not aware of any claim or interest of some other person in
the property, or of any defect or restriction in the title of the seller or
in his capacity to convey title to the property. Absent one or two of
the foregoing conditions, then the law itself puts the buyer on notice
and obliges the latter to exercise a higher degree of diligence by
scrutinizing the certificate of title and examining all factual
circumstances in order to determine the seller’s title and capacity to
transfer any interest in the property. Under such circumstance, it was
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no longer sufficient for said buyer to merely show that he had relied
on the face of the title; he must now also show that he had exercised
reasonable precaution by inquiring beyond the title. Failure to
exercise such degree of precaution makes him a buyer in bad faith.24

In this case, defendant-appellant Benjamin alleged to have

derived his title from a Deed of Absolute Sale 25 executed by
Alejandra. He was very much aware that the title to the subject
property was still in the name of Alejandra's predecessors-in-interest
as it was evident on the face of the document itself. Because the
property had not yet been partitioned in accordance with the Rules of
Court, no particular portion of the property could have been
identified as yet and delineated as the object of the sale. This is
because the alienation made by Alejandra was limited to the portion
which may be allotted to her in the division upon the termination of
the co-ownership. Despite this glaring fact, defendant-appellant
Benjamin still constructed improvement on the property. For this
reason, his claim of good faith lacks credence.

Consequently, it is not sufficient for defendant-appellant

Benjamin to insist that he relied on the face of the certificate of title,
for he must further show that he exercised reasonable precaution by
inquiring beyond the certificate of title. Failure to exercise such
degree of precaution rendered him a buyer in bad faith. "It is a well-
settled rule that a purchaser cannot close his eyes to facts which
should put a reasonable man upon his guard, and then claim that he
acted in good faith under the belief that there was no defect in the
title of the vendor."26

WHEREFORE, The Appeal is DENIED. The August 14, 2020

Decision rendered by the Regional Trial Court, Branch 40 of Dagupan
City, in Civil Case No. 2011-0190-D is hereby AFFIRMED in TOTO.

SO ORDERED.

24 Uy v. Fule, et.al., G.R. No. 164961, June 30, 2014.

25 Supra Note 9.
26 Id.
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ORIGINAL SIGNED
MAXIMO M. DE LEON
Associate Justice

WE CONCUR:

ORIGINAL SIGNED ORIGINAL SIGNED

MANUEL M. BARRIOS PERPETUA SUSANA T. ATAL-PAÑO
Associate Justice Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is

hereby certified that the conclusions in the above decision were
reached in consultation before the case was assigned to the writer of
the opinion of the Court.
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MANUEL M. BARRIOS
Associate Justice
Chairperson, Eighth Division