Gevero vs. IAC

A notarized deed of sale is a public document that enjoys a presumption of regularity; forgery cannot be presumed and must be proven by clear, convincing, and more than preponderant evidence. A purchaser of registered land who relies on the clean certificate of title and investigates the vendor’s possession is a buyer in good faith and is under no duty to go behind the title. The execution of a public instrument constitutes constructive delivery of the property, and registration transfers ownership, defeating a claim of laches based on alleged continuous adverse possession.

Lot 2476 of the Cagayan Cadastre was originally registered under Original Certificate of Title No. 7610 in the names of Teodorica Babangha (1/2 share) and her six children — Maria, Restituto, Elena, Ricardo, Eustaquio, and Ursula, all surnamed Gevero — who collectively held the remaining 1/2 undivided share. Teodorica Babangha died long before World War II. On February 5, 1952, Ricardo Gevero executed a deed of absolute sale covering a 20,119-square-meter portion of Lot 2476 in favor of Luis Lancero. The sale was annotated on the title, and Lancero obtained Transfer Certificate of Title No. T-1183. On September 15, 1964, Lancero sold the same land to Del Monte Development Corporation (DELCOR), which secured Transfer Certificate of Title No. 4320. Before purchasing, DELCOR examined Lancero’s title, the subdivision plan, the technical description, and the deed of sale from Ricardo Gevero; it also verified that Lancero was in possession. In 1966, the heirs of Teodorica Babangha executed an extrajudicial settlement and partition dividing Lot 2476 into several sublots. Lot 2476-D, with an area of 7,878 square meters, was adjudicated to Ricardo Gevero, overlapping the land already owned by DELCOR. The partition precipitated DELCOR’s complaint to quiet title and annul the partition insofar as it affected its property.

• Original Title and Co-ownership: Lot 2476, situated in Gusa, Cagayan de Oro City, was covered by OCT No. 7610. Teodorica Babangha owned an undivided 1/2 share, and her six children — Maria, Restituto, Elena, Ricardo, Eustaquio, and Ursula Gevero — held the remaining 1/2 share in common.

• 1952 Sale by Ricardo Gevero to Luis Lancero: On February 5, 1952, Ricardo Gevero executed a Deed of Absolute Sale in favor of Luis Lancero covering a 20,119-square-meter portion of Lot 2476. The transaction was annotated as Entry No. 1128 on the mother title. Lancero thereafter obtained TCT No. T-1183 for the segregated parcel.

• Death of Teodorica and Vesting of Hereditary Rights: Teodorica Babangha died long before World War II. Her half-share in Lot 2476 transmitted to her six children by operation of law upon her death, though no formal partition was effected at that time.

• 1964 Sale to DELCOR and Pre-Purchase Investigation: On September 15, 1964, Luis Lancero executed a Deed of Absolute Sale over the same parcel in favor of Del Monte Development Corporation (DELCOR). TCT No. 4320 was issued to DELCOR. Prior to the purchase, DELCOR examined Lancero’s title with the Register of Deeds, reviewed the subdivision plan and technical description, and verified the 1952 deed of sale from Ricardo Gevero. It also inspected the premises and found Lancero in exclusive possession. Satisfied that everything was in order, DELCOR bought the land in good faith and for value, occupyling it until May 1969.

• 1966 Extrajudicial Partition and Overlap: On October 17, 1966, the heirs of Teodorica Babangha executed an Extra-Judicial Settlement and Partition of her estate. Under an approved subdivision plan (LRC) Psd-80450, Lot 2476 was divided into nine sublots, 2476-A through 2476-I. Lot 2476-D, containing 7,878 square meters, was adjudicated to Ricardo Gevero. This sublot fell within the area earlier sold to Lancero and subsequently to DELCOR.

• Complaint and Defenses: DELCOR filed a complaint to quiet title and/or annul the partition insofar as it affected its land. Petitioners, as heirs of Ricardo Gevero, resisted on grounds that the 1952 sale was void for forgery, lack of consideration, and other defects, and that DELCOR’s suit was barred by laches because they had remained in continuous, adverse possession of the property.

• Invalidity of the 1952 Deed of Sale: Petitioners maintained that the deed of sale from Ricardo Gevero to Luis Lancero was void because Ricardo’s signature was forged without his knowledge; Lancero himself recognized the defect by executing a 1968 “Settlement to Avoid Litigation”; Ricardo’s children remained on the property; the deed incorrectly identified the lot as No. 2470 instead of 2476; the sale included the share of Eustaquio Gevero without authority; the segregation survey and issuance of Lancero’s TCT No. T-1183 and DELCOR’s TCT No. 4320 were done without the consent of the other co-owners; and the area recited in the deed (20,649 sqm) differed from the registered area (20,119 sqm).

• Exclusion of Teodorica’s Inherited Share: Petitioners contended that the 1952 sale covered only Ricardo’s proportionate interest in the undivided 1/2 of the six siblings and did not include the share he would eventually inherit from Teodorica Babangha, because the deed did not state that she was deceased and the extrajudicial partition had not yet taken place.

• Laches: Petitioners argued that DELCOR’s action was barred by laches, asserting that they had remained in actual, open, uninterrupted, and adverse possession of the property up to the present.

• Validity and Regularity of the 1952 Sale: DELCOR countered that the 1952 deed was a notarized public document clothed with a presumption of regularity. Petitioners failed to present the clear, convincing, and more than preponderant evidence required to rebut forgery or absence of consideration, the latter being presumed under Article 1354 of the Civil Code. The 1968 settlement executed by Lancero was res inter alios acta that could not prejudice DELCOR, which had acquired title in 1964.

• Inclusion of Hereditary Share: DELCOR maintained that under Article 777 of the Civil Code, Teodorica’s hereditary share vested in her heirs immediately upon her death, well before the 1952 sale. Ricardo therefore sold his entire interest in the property, including his inheritance, unless expressly excluded. Reading the deed in its entirety, as rules of contractual interpretation require, confirmed the inclusion of that share.

• Good Faith and Laches: DELCOR asserted it was an innocent purchaser for value who relied on the clean certificate of title of Lancero and confirmed his possession. The execution of the 1964 notarized deed constituted delivery, and registration transferred ownership. Thus, petitioners’ alleged continued possession was not adverse and could not ripen into a defense of laches.

• Validity of the 1952 Deed of Sale: Whether the deed of sale executed by Ricardo Gevero in favor of Luis Lancero in 1952 was valid, notwithstanding allegations of forgery and other procedural defects.

• Scope of the Sale — Inherited Share: Whether the sale included the 1/2 share that Ricardo Gevero inherited from his mother, Teodorica Babangha, or was limited solely to his undivided share among the siblings under the original certificate of title.

• Laches: Whether DELCOR’s action to quiet title was barred by laches due to the petitioners’ purported continuous possession of the property.

• Validity of the 1952 Deed of Sale: The 1952 deed of sale was valid. As a notarized public document, it carried a presumption of regularity in its execution, and forgery cannot be presumed but must be affirmatively proven by clear, convincing, and more than preponderant evidence. Petitioners failed to meet that burden. The claim of absence of consideration was likewise unsubstantiated, and consideration is presumed under Article 1354 of the Civil Code. Lancero’s execution of the 1968 “Settlement to Avoid Litigation” was an act performed after he had already transferred ownership to DELCOR in 1964. It was therefore res inter alios acta and could not prejudice DELCOR under Sections 28 and 31, Rule 130 of the Rules of Court. The trial court’s factual finding that Lancero took possession of the land after the 1952 sale was final and binding on review. The remaining alleged flaws — incorrect lot number, inclusion of Eustaquio’s share, lack of consent to the subdivision survey, and discrepancy in area — were raised for the first time on appeal and could not be entertained without offending due process.

• Scope of the Sale — Inherited Share: The sale included Ricardo Gevero’s hereditary share from his mother. Article 777 of the Civil Code provides that the rights to the succession are transmitted from the moment of the decedent’s death. Teodorica Babangha died long before World War II; thus, Ricardo’s hereditary share vested immediately and he was free to dispose of it in 1952 even though the actual extent of the estate had not yet been liquidated. A contract must be interpreted as a whole to give effect to all its provisions. Petitioners’ selective reading of a single paragraph of the deed would create contradictions and render the instrument meaningless. The subsequent 1966 extrajudicial partition could not defeat DELCOR’s previously acquired rights.

• Laches: DELCOR’s action was not barred by laches. The 1964 deed of sale was a public instrument, and under Article 1498 of the Civil Code, its execution is equivalent to delivery of the thing sold. Moreover, the land was registered, and it is the act of registration that transfers ownership. DELCOR was an innocent purchaser for value who had the right to rely on the certificate of title without being obliged to investigate beyond it; nevertheless, it did more than that by checking the title, the supporting documents, and the vendor’s physical possession. Having acted in good faith and having registered its title, DELCOR could not be defeated by a claim of adverse possession masquerading as laches.

• Presumption of Regularity of Notarized Documents — A public document executed and attested through the intervention of a notary public enjoys a presumption of regularity and is evidence of the facts stated therein in a clear and unequivocal manner. To overthrow this presumption, the evidence must be clear, convincing, and more than merely preponderant; forgery can never be presumed and must be proven affirmatively. Applied to uphold the 1952 deed of sale despite allegations of forgery.

• Res Inter Alios Acta (Sections 28 and 31, Rule 130, Rules of Court) — The rights of a party cannot be prejudiced by the act, declaration, or omission of another. Where title to property has passed to a new owner, the former owner’s admissions made after the transfer do not bind the successor. Lancero’s 1968 settlement, executed four years after he sold the land to DELCOR, was thus inadmissible against DELCOR.

• Immediate Transmission of Hereditary Rights (Article 777, Civil Code) — The rights to the succession are transmitted from the moment of the death of the decedent, and an heir may validly dispose of his hereditary share immediately thereafter, even before formal liquidation or partition. Applied to hold that Ricardo Gevero’s 1952 sale to Lancero included the share he inherited from his mother, who died before World War II.

• Delivery and Transfer of Ownership in Registered Land (Article 1498, Civil Code) — The execution of a public instrument is equivalent to delivery of the thing sold. In the case of registered land, ownership is transferred by the act of registration. An innocent purchaser for value who relies on the certificate of title and registers the sale acquires a right superior to a claim of adverse possession raised as laches.

• “A public document executed and attested through the intervention of the notary public is evidence of the facts in clear, unequivocal manner therein expressed. It has the presumption of regularity and to contradict all these, evidence must be clear, convincing and more than merely preponderant.” (Articulating the stringent evidentiary standard for overturning a notarized deed.)

• “Forgery cannot be presumed, it must be proven.”

• “The hereditary share in a decedent’s estate is transmitted or vested immediately from the moment of the death of the ‘causante’ or predecessor in interest (Civil Code of the Philippines, Art. 777), and there is no legal bar to a successor (with requisite contracting capacity) disposing of his hereditary share immediately after such death, even if the actual extent of such share is not determined until the subsequent liquidation of the estate.”

• “Under the established principles of land registration law, the person dealing with registered land may generally rely on the correctness of its certificate of title and the law will in no way oblige him to go behind the certificate to determine the condition of the property.”

• Dy v. Sacay, 165 SCRA 473 (1988); Nuguid v. C.A., G.R. No. 77423, March 13, 1989 — Applied to reinforce the presumption of regularity of notarized documents.
• Rebuleda v. I.A.C., 155 SCRA 520-521 (1987) — Cited for the rule that evidence to rebut a notarized document’s regularity must be clear, convincing, and more than preponderant.
• Siasat v. IAC, No. 67889, October 10, 1985 — Relied on for the principle that forgery cannot be presumed.
• City of Manila v. del Rosario, 5 Phil. 227 (1905); Medel v. Avecilla, 15 Phil. 465 (1910) — Applied to hold that an admission of a former owner binds the present owner only if made while the former held title.
• De Borja v. Vda. de Borja, 46 SCRA 577 (1972) — Cited for the doctrine of immediate transmission of hereditary rights upon the decedent’s death.
• GSIS v. C.A., G.R. No. 42278, January 20, 1989 — Cited for the proposition that registration transfers ownership of registered land.
• Mallorca v. De Ocampo, No. L-26852, March 25, 1970; Unchuan v. C.A., 161 SCRA 710 (1988) — Reiterated the right of a buyer to rely on the certificate of title.

• Article 777, Civil Code — The rights to the succession are transmitted from the moment of the death of the decedent. Applied to establish that Ricardo Gevero’s inheritance from Teodorica vested before the 1952 sale and was included in the conveyance.
• Article 1354, Civil Code — Consideration is presumed unless the contrary is proven. Applied to dismiss the unsubstantiated allegation of absence of consideration for the 1952 sale.
• Article 1498, Civil Code — The execution of a public instrument is equivalent to delivery of the thing sold. Applied to deem the property constructively delivered to Lancero and subsequently to DELCOR, undercutting the claim of continuous adverse possession by petitioners.
• Sections 28 and 31, Rule 130, Rules of Court — The rights of a party cannot be prejudiced by the act, declaration, or omission of another (res inter alios acta); the declaration of a former owner binds the present owner only if made while the former held title. Applied to exclude Lancero’s 1968 settlement as evidence against DELCOR.

Justices Melencio-Herrera (Chairman), Padilla, and Regalado concurred. Justice Sarmiento was on leave.