Almeda vs. Heirs of Ponciano Almeda

A notarized deed of absolute sale enjoys the presumption of regularity and due execution, and the party impugning its validity bears the burden of proving forgery, simulation, or lack of capacity by clear, positive, and convincing evidence — not merely by preponderant evidence or the uncorroborated testimony of an interested witness whose statements are uncertain and self-serving.

Spouses Venancio Almeda and Leonila Laurel-Almeda had nine children, including the petitioners (Rafael, Emerlina, Alodia, Leticia, Norma, and Publio Tibi, the widower of the deceased Rosalina) and the original defendant Ponciano Almeda. The disputed properties consisted of several parcels of land in Tagaytay City covered by OCT Nos. O-197 and O-443, which Leonila had inherited from her parents and which were registered in her name as married to Venancio. On May 19, 1976, when Venancio was 80 and Leonila was 81, they executed a Power of Attorney granting Ponciano, among others, authority to sell the parcels covered by those titles. Venancio died on February 27, 1985 at age 90, and Leonila died on April 3, 1993 at age 97, both intestate.

Spouses Venancio Almeda and Leonila Laurel-Almeda had nine children: Ponciano, Rafael, Emerlina, Alodia, Leticia, Norma, Benjamin, Severina Almeda-Santos, and Rosalina Almeda-Tibi (Publio's deceased wife). The disputed properties consisted of parcels of land in Tagaytay City covered by OCT Nos. O-197 and O-443, which Leonila had inherited from her parents and which were registered in her name as married to Venancio. OCT No. O-197 embraced four parcels — Lot 10 (48,512 sq m), Lot 17 (37,931 sq m), Lot 30 (8,047 sq m), and Lot 32 (715 sq m) — while OCT No. O-443 covered Lot 9 measuring 33,946 sq m. On May 19, 1976, when Venancio was 80 and Leonila was 81, they executed a Power of Attorney granting Ponciano, among others, authority to sell the parcels covered by those titles.

On June 9, 1976, Ponciano, acting as attorney-in-fact for Venancio and Leonila, executed a Deed of Absolute Sale over Lot 30 under OCT No. O-197 in favor of Julian Y. Pabiloña, Virginia Go, Gemma Tan Ongking, Arthur C. Chua, and Lee Hiong Wee for P160,940.00. Thereafter, on November 9, 1976, Venancio and Leonila themselves entered into an Agreement to Sell to Ponciano the parcels covered by OCT Nos. O-197 and O-443, as well as Lots 6, 4, and 9-A, for P1 Million with P200,000.00 as down payment and the balance payable in one year without interest. This was superseded by a Deed of Sale with Mortgage dated November 11, 1977, whereby the spouses sold the same properties to Ponciano for P1 Million, with the P700,000.00 balance secured by the properties. That Deed with Mortgage was in turn expressly superseded by the October 3, 1978 Deed of Absolute Sale, whereby Venancio and Leonila sold to Ponciano the remaining lots under OCT No. O-197 and Lot 9 under OCT No. O-443, plus Lots 6, 4, and 9-A, for a total consideration of P704,243.77. By virtue of these deeds, OCT Nos. O-197 and O-443 were cancelled and TCT Nos. T-15125, T-24806, T-24807, T-24808, and T-24809 were issued to Ponciano, while TCT No. T-10330 was issued to the Pabiloña group. The 1978 Deed was registered on November 12, 1984, during Venancio and Leonila's lifetime, as evidenced by annotations on both original certificates of title and the issuance of transfer certificates in Ponciano's name.

Venancio died on February 27, 1985 at age 90, and Leonila died on April 3, 1993 at age 97. Within two weeks of Leonila's death, on April 17, 1993, Rafael, Emerlina, Alodia, Leticia, and Norma filed a notice of adverse claim with the Register of Deeds of Tagaytay City over their parents' properties. According to petitioners, Ponciano had withheld from them the existence of the 1978 Deed, and when they learned of it and demanded partition, Ponciano merely promised to cause the same at a proper time. When they could no longer wait, they filed the adverse claim.

On October 10, 1996, petitioners filed a Complaint for Nullity of Contracts, Partition of Properties and Reconveyance of Titles with Damages before the RTC of Tagaytay City, docketed as Civil Case No. TG-1643, against Ponciano and his wife Eufemia and the Register of Deeds of Tagaytay City, with Severina's surviving spouse Cesar Santos and children Rosana, Norman, and Ferdinand as unwilling plaintiffs. Petitioners alleged that the parties were the only heirs of Venancio and Leonila, who died intestate and without legal obligations. They claimed that Ponciano, taking advantage of his being the eldest child and his close relationship with their parents, caused the simulation and forgery of the 1978 Deed, asserting that their parents did not sign it, that their signatures may have been forged, that no consideration was received, and that if the parents did sign, they did so without knowledge of the import of the document. Ponciano and Eufemia denied the allegations, asserting the genuineness of the 1978 Deed and its execution for valuable consideration from which some petitioners, including Rafael, received substantial pecuniary benefits. They also accused petitioners of laches and of not coming to court with clean hands. Ponciano died on October 16, 1997 and was substituted by his wife and children.

At trial, petitioners presented the lone testimony of Emerlina, whose account was internally inconsistent: she first testified that the vendors' signatures on the 1978 Deed did not belong to her parents, then said that if they did sign, they did not know what they signed, and eventually conceded she could not say whether the signatures belonged to her parents. After Ponciano's heirs failed to present their evidence despite several opportunities, the RTC considered the case submitted for decision. The RTC found that the notarized documents enjoyed the presumption of regularity and that petitioners failed to overcome it by clear and convincing evidence of simulation or forgery. The CA affirmed, adding that mere variance in signatures is not proof of forgery and that presentation of documents bearing genuine signatures for comparison was required but not done.

• Forgery of the 1978 Deed: Petitioners argued that their parents Venancio and Leonila did not sign the October 3, 1978 Deed of Absolute Sale in favor of Ponciano, and that their signatures thereon may have been forged. They described the questioned signatures as "wiri-wiri" or containing "wild strokes."
• Simulation and Lack of Consideration: Petitioners maintained that the 1978 Deed was simulated because no consideration was paid, pointing out that the vouchers supposedly showing Ponciano's payment of P704,243.77 were not offered in evidence by private respondents. They also argued that the price was unconscionable, citing the alleged sale of Lot 30 to Cityland, Inc. on September 18, 1992 for P12,070,500.00.
• Mental Incapacity of Parents: Petitioners asserted that their parents were "uliyanin" or forgetful, of advanced age, and "at times" sickly during the execution of the 1978 Deed, rendering them incapable of freely giving consent.
• Undue Influence: Petitioners alleged that Ponciano took advantage of his being the eldest child and his close relationship with their parents to unduly influence them into executing the 1978 Deed.
• Defective Notarization: Petitioners argued that the Acknowledgment before Notary Public Federico Magdangal, whose commission was for Makati City, was done outside his territorial limits because the property is in Tanauan, Batangas, and that the printed text stated the parties appeared before the Notary Public in Tanauan, Batangas despite the acknowledgment being done in Makati City. They also pointed out that no identification document from Venancio and Leonila was reflected in the Acknowledgment.
• Late Registration and Tax Declarations: Petitioners contended that the alleged late registration of the 1978 Deed in 1993 — 15 years after the sale — and the Tax Declarations allegedly still in Leonila's name up to the time the Complaint was filed, were additional indications of simulation.

• Genuineness and Due Execution: Ponciano and Eufemia denied that the 1978 Deed was simulated or forged, asserting its genuineness and execution for valuable consideration from which some petitioners, including Rafael, received substantial pecuniary benefits.
• Laches: Ponciano and Eufemia averred that petitioners were guilty of laches.
• Unclean Hands: They accused petitioners of not coming to court with clean hands, claiming the latter may have themselves resorted to falsification of documents to transfer assets in their names and subsequently to other persons.
• Belated Issues: Private respondents pointed out that the alleged defects in the notarization were raised only for the first time before the Supreme Court, not before the lower courts.

• Forgery: Whether petitioners established by clear and convincing evidence that the signatures of Venancio and Leonila on the 1978 Deed of Absolute Sale were forged, thereby overcoming the presumption of regularity attaching to the notarized document.
• Mental Capacity to Contract: Whether Venancio and Leonila were mentally incapacitated to execute the 1978 Deed by reason of advanced age, forgetfulness, and illness.
• Undue Influence: Whether Ponciano exerted undue influence over Venancio and Leonila such that their consent to the 1978 Deed was vitiated.
• Simulation and Inadequacy of Consideration: Whether the 1978 Deed was simulated for lack of consideration or whether the price paid was unconscionable.
• Defective Notarization: Whether alleged defects in the notarization of the 1978 Deed, raised for the first time before the Supreme Court, may be considered and whether they affect the document's validity.
• Burden of Proof: Whether petitioners' evidence suffices to establish their claims by preponderance of evidence, given that private respondents waived presentation of their evidence.

• Forgery: No. Petitioners failed to present clear, positive, and convincing evidence of forgery; their sole witness's testimony was uncertain, self-serving, and uncorroborated, and a visual comparison of the disputed signatures with admittedly genuine signatures revealed prominent similarities.
• Mental Capacity to Contract: No. Mere forgetfulness and advanced age, without medical or other evidence showing that mental faculties were impaired to the extent of preventing intelligent and free exercise of will, do not incapacitate a person from contracting.
• Undue Influence: No. Other than a general allegation that Ponciano took advantage of his position as eldest child, no evidence was presented showing how undue influence was exerted or how the parents were deprived of freedom of choice.
• Simulation and Inadequacy of Consideration: No. The notarized 1978 Deed shows on its face that the consideration of P704,243.77 was acknowledged, and petitioners failed to substantiate their claim of unconscionability, having presented no evidence of the properties' condition or valuation in 1978.
• Defective Notarization: No. The alleged defects in notarization were raised for the first time before the Supreme Court and may not be entertained; even if the acknowledgment were defective, the document would merely be reduced to a private instrument, still requiring petitioners to prove forgery by preponderance of evidence.
• Burden of Proof: No. The party making allegations bears the burden of proving them and must rely on the strength of their own evidence, not on the weakness of the defense; petitioners' evidence does not suffice even by the standard of preponderance of evidence.

• Forgery: The presumption of regularity attaches to notarized documents, and the burden of overcoming it lies on the party contesting the document. Forgery cannot be presumed; it must be proved by clear, positive, and convincing evidence. Petitioners' complaint itself did not allege forgery in definite terms, stating only that the parents "did not sign" and that their signatures "may have been forged." Emerlina's testimony — the sole evidence presented — was internally inconsistent: she first denied the signatures were her parents', then said they may have signed without knowing the import, then conceded she could not say whether the signatures belonged to her parents. Her testimony was also self-serving, as she stood to benefit from annulment. To establish forgery, the extent, kind, and significance of variation between standard and disputed signatures must be demonstrated, and it must be shown that the variation is due to a different personality and that resemblance is the result of imitation. Emerlina's uncorroborated testimony satisfied none of these criteria. The Court, pursuant to Section 22, Rule 132 of the Rules of Court, conducted its own visual comparison of the disputed signatures on the 1978 Deed with the admittedly genuine signatures on the 1976 Power of Attorney and found prominent similarities — Leonila's signature appeared almost the same, and Venancio's showed characteristic similarities in angles and slants. The apparent dissimilarities were overshadowed by the striking similarities and could be attributed to the signatories' old age.

• Mental Capacity to Contract: The law presumes every person fully competent to contract until satisfactory proof to the contrary is presented. The party claiming lack of capacity bears the burden of adducing clear and convincing evidence. Petitioners' claim that their parents were "uliyanin," of advanced age, and at times sickly was based solely on Emerlina's testimony, unsupported by medical evidence. Mere forgetfulness, without evidence that it removed the ability to intelligently and firmly protect property rights, does not incapacitate a person from contracting. The Court distinguished Domingo vs. CA, where the deed was nullified because the seller was senile — playing with her waste and urinating in bed — circumstances indicating clear incapacity not present here. A person is presumed of sound mind at any particular time absent proof to the contrary.

• Undue Influence: Undue influence exists when a person takes improper advantage of his power over the will of another, depriving the latter of reasonable freedom of choice. It must be established by full, clear, and convincing evidence; otherwise, presumed consent prevails. Petitioners offered only a general allegation that Ponciano took advantage of being the eldest child and having a close relationship with their parents. No evidence was presented showing how Ponciano exerted influence or how the parents were thereby deprived of freedom to exercise sufficient judgment.

• Simulation and Inadequacy of Consideration: Simulation requires (a) an outward declaration of will different from the parties' true will, (b) the false appearance intended by mutual agreement, and (c) the purpose of deceiving third persons. None of these requisites were shown. Petitioners' contention that no consideration was paid because the vouchers were not offered in evidence was unavailing: the notarized 1978 Deed shows on its face that the properties were sold for P704,243.77, and the deed went through registration, leading to issuance of TCTs in Ponciano's name. Relying on Mendezona vs. Ozamiz, the Court held that a simulated contract cannot be inferred from mere non-production of payment evidence, and the burden to prove non-payment falls on the party alleging it. Petitioners' claim of unconscionable price, premised on the 1992 sale of Lot 30 to Cityland, Inc. for P12,070,500.00, failed because the 1978 Deed was executed 14 years earlier under different market conditions, and petitioners presented no evidence of the properties' condition or valuation in 1978. The Court also noted that the 1978 Deed was in fact registered in 1984, during the parents' lifetime, and that tax declarations remaining in Leonila's name could not negate Ponciano's assertion of ownership through registration and issuance of titles.

• Defective Notarization: The alleged defects — that the notary's commission was for Makati City while the property is in Tanauan, Batangas, that the printed text stated the parties appeared in Tanauan, and that no identification documents from the parents were reflected — were raised only before the Supreme Court. It is well-settled that issues not raised in the court a quo cannot be raised for the first time on appeal without violating fair play, justice, and due process. Even granting a defective acknowledgment, the document would merely lose its public character and be reduced to a private instrument, still requiring petitioners to prove forgery by preponderance of evidence.

• Burden of Proof: In civil cases, the party making allegations bears the burden of proving them by preponderance of evidence and must rely on the strength of their own evidence, not on the weakness of the defense. This holds true especially when the defense has not presented evidence. Petitioners' argument that their evidence should prevail because private respondents presented none was rejected. Under Section 1, Rule 133 of the Rules of Court, preponderance is determined by considering all facts and circumstances, including the witnesses' manner of testifying, intelligence, interest, and credibility. Considering all circumstances — the uncertain and self-serving nature of Emerlina's testimony, the striking similarities in the visual comparison of signatures, the absence of medical evidence of incapacity, the lack of proof of undue influence, and the failure to substantiate simulation or unconscionability — petitioners failed to establish their claims even by preponderance of evidence.

• Presumption of Regularity of Notarized Documents — A notarized document enjoys the presumption of regularity and due execution, is admissible in evidence without further proof of authenticity, and is entitled to full faith and credit upon its face. He who impugns it must present strong, complete, and conclusive proof of its falsity or nullity. Absent evidence of falsity so clear, strong, and convincing — not merely preponderant — the presumption must be upheld. The burden of proof lies on the party contesting the document. Applied here: the 1978 Deed being notarized, petitioners bore the burden of overcoming the presumption, which they failed to discharge.

• Forgery Must Be Proved, Not Presumed — Forgery cannot be presumed. An allegation of forgery must be proved by clear, positive, and convincing evidence, with the burden on the party alleging it. To establish forgery, the proponent must demonstrate: (1) the extent, kind, and significance of the variation between standard and disputed signatures; (2) that the variation is due to the operation of a different personality and not merely an expected and inevitable variation in the genuine writing of the same writer; and (3) that the resemblance is the result of a more or less skillful imitation and not merely a habitual and characteristic resemblance in genuine writing. Applied here: Emerlina's uncorroborated testimony satisfied none of these criteria.

• Presumption of Competence to Contract — Every person is presumed fully competent to enter into a contract until satisfactory proof to the contrary is presented. A person is not incapacitated to contract merely because of advanced years or physical infirmities, unless such age and infirmities impair mental faculties to the extent of preventing intelligent and fair understanding of the contract's provisions or protection of property rights. A person is presumed of sound mind at any particular time absent proof to the contrary. Applied here: petitioners' bare assertion of forgetfulness and sickness, unsupported by medical evidence, did not rebut the presumption.

• Undue Influence — Undue influence exists when a person takes improper advantage of his power over the will of another, depriving the latter of reasonable freedom of choice. It must be established by full, clear, and convincing evidence; otherwise, presumed consent prevails. Applied here: general allegations of Ponciano's advantage as eldest child, without evidence of how influence was exerted, were insufficient.

• Simulation of Contracts — Simulation exists when: (a) there is an outward declaration of will different from the will of the parties; (b) the false appearance was intended by mutual agreement of the parties; and (c) their purpose is to deceive third persons. A simulated contract cannot be inferred from mere non-production of evidence of payment, and the burden to prove non-payment falls on the party alleging it. Applied here: none of the requisites were shown, and the notarized deed showed the consideration on its face.

• Burden of Proof in Civil Cases; Preponderance of Evidence — The party making allegations has the burden of proving them by preponderance of evidence and must rely on the strength of their own evidence, not on the weakness of the defense. This rule applies even when the defense has not presented evidence. Preponderance means probability of the truth — evidence more convincing to the court as worthy of belief than that offered in opposition. Under Section 1, Rule 133, the court considers all facts and circumstances including witnesses' manner of testifying, intelligence, means of knowing, interest, and credibility. Applied here: petitioners' evidence, scrutinized on its own merit, failed to meet even the preponderance standard.

• Issues Not Raised Below Cannot Be Raised on Appeal — Issues not raised in the court a quo cannot be raised for the first time on appeal without violating fair play, justice, and due process. A party who adopts a certain theory in the lower court may not change it on appeal. Applied here: the alleged defects in notarization, raised only before the Supreme Court, could not be entertained.

• Effect of Defective Notarization — A defective acknowledgment merely strips the document of its public character and reduces it to a private instrument. The party contesting it must then prove their allegations by preponderance of evidence, as the document no longer enjoys the significantly weighted presumption of validity. Applied here: even assuming defective notarization, petitioners still failed to prove forgery by preponderance of evidence.

• "A notarized Deed of Absolute Sale has in its favor the presumption of regularity, and it carries the evidentiary weight conferred upon it with respect to its due execution. It is admissible in evidence without further proof of its authenticity and is entitled to full faith and credit upon its face." — This passage states the foundational presumption governing notarized documents, which petitioners were required to overcome but failed to do.

• "To establish forgery, the extent, kind and significance of the variation in the standard and disputed signatures must be demonstrated; it must be proved that the variation is due to the operation of a different personality and not merely an expected and inevitable variation found in the genuine writing of the same writer; and it should be shown that the resemblance is a result of a more or less skillful imitation and not merely a habitual and characteristic resemblance which naturally appears in a genuine writing." — This is the canonical three-part test for proving forgery, frequently cited in subsequent jurisprudence and central to the Court's analysis.

• "The parties must rely on the strength of their own evidence and not upon the weakness of the defense offered by their opponent. This rule holds true especially when the latter has had no opportunity to present evidence because of a default order." — This passage articulates the principle that a plaintiff's evidence must stand on its own merit and is not rendered conclusive simply because unmet by defense evidence, directly relevant where private respondents waived their right to present evidence.

• "A person is not incapacitated to enter into a contract merely because of advanced years or by reason of physical infirmities, unless such age and infirmities impair his mental faculties to the extent that he is unable to properly, intelligently and fairly understand the provisions of said contract, or to protect his property rights." — This formulation defines the threshold for contractual incapacity based on age or infirmity, distinguishing this case from Domingo vs. CA where actual senility was proven.

• Mendezona vs. Ozamiz, 426 Phil. 888 (2002) — Controlling precedent on the presumption of regularity of notarized documents and the insufficiency of mere non-production of payment evidence to infer simulation. Extensively relied upon for the propositions that a simulated contract cannot be inferred from non-production of checks, that the notarized deed's face shows acknowledgment of consideration, and that forgetfulness alone does not establish mental incapacity.
• Ceballos vs. Intestate Estate of the Late Mercado, 474 Phil. 363 (2004) — Followed on the rule that the Supreme Court is not a trier of facts in Rule 45 petitions and on the insufficiency of alleging unconscionable price without evidence of property conditions at the time of sale. Distinguished from the present case on its facts but applied on the principle that unconscionability must be substantiated by evidence of valuation at the time of transaction.
• Domingo vs. CA, 419 Phil. 651 (2001) — Distinguished. There, the deed was nullified because the seller was senile — playing with her waste and urinating in bed — circumstances indicating clear physical and mental incapacity. No similar circumstances were alleged or proved in the instant case.
• Rivera vs. Turiano, 546 Phil. 495 (2007) — Followed on the proposition that mere variance in genuine and disputed signatures is not proof of forgery and on the three-part test for establishing forgery.
• Spouses Villaceran vs. De Guzman, 682 Phil. 426 (2012) — Followed on the rule that the genuineness of a deed of sale is essentially a question of fact and that factual findings of the trial court affirmed by the CA are final and conclusive.
• Dr. Yason vs. Arciaga, 490 Phil. 338 (2005) — Followed on the presumption of competence to contract and on the principle that advanced age or physical infirmity does not incapacitate a person unless mental faculties are impaired.
• Pan Pacific Industrial Sales Co., Inc. vs. CA, 517 Phil. 380 (2006) — Followed on the burden of proof to overcome the presumption of due execution of notarized documents and on the rule that forgery must be proved by clear and convincing evidence.
• Adelaida Meneses (deceased) vs. Venturozo, 675 Phil. 641 (2011) — Followed on the principle that a defective acknowledgment merely strips a document of its public character and reduces it to a private instrument, still requiring the contesting party to prove their allegations by preponderance of evidence.

• Section 22, Rule 132, Rules of Court — Authorizes the court, by itself, to make a comparison of disputed handwriting with writings admitted or treated as genuine by the party against whom the evidence is offered, or proved to be genuine to the satisfaction of the judge. Applied: the Court compared the disputed signatures on the 1978 Deed with the admittedly genuine signatures on the 1976 Power of Attorney and found prominent similarities.
• Section 1, Rule 133, Revised Rules of Court — Governs how preponderance of evidence is determined, directing courts to consider all facts and circumstances including witnesses' manner of testifying, intelligence, means of knowing the facts, interest, and credibility. Applied: the Court evaluated petitioners' evidence under this standard and found it insufficient even by preponderance of evidence.

Sereno, C.J. (Chairperson), Leonardo-De Castro, Del Castillo, and Jardeleza, JJ., concurred.