Spouses Malig-Coronel and Coronel vs. Solis-Quesada

Forgery cannot be presumed and must be proved by clear, positive, and convincing evidence; a claim of forgery in notarized deeds fails where the alleged signatory merely denies the signature and offers no accurate comparison with genuine signatures executed at the closest possible point in time. Because forgery was not established, the action for reconveyance—though pleaded as based on a void contract—could not prosper, and the dismissal on demurrer to evidence was affirmed.

The Spouses Coronel claimed ownership of Lot 9747-C, a 1,379-square-meter parcel in San Vicente, Sta. Ignacia, Tarlac City, covered by TCT No. 156304. Asuncion's aunt Catalina Hernando and Catalina's granddaughter Mina M. Delos Reyes were family relations; Quesada was the live-in partner of Delos Reyes' brother Marcelino Delos Reyes. The dispute implicates the Torrens system and the remedy of reconveyance under Section 53, paragraph 3 of Presidential Decree No. 1529, read with Article 1456 of the Civil Code on implied trusts and Article 1144(2) on the ten-year prescriptive period for obligations created by law.

The Spouses Coronel claimed ownership of Lot 9747-C, a 1,379-square-meter parcel in San Vicente, Sta. Ignacia, Tarlac City, covered by TCT No. 156304. In 1981, they permitted Asuncion's aunt Catalina Hernando to construct a house on a portion of the property and to act as caretaker while the spouses attended to their business in Angeles City, Pampanga. They entrusted Catalina with the title and other pertinent documents for tax and other legitimate purposes. When Catalina became ill and bedridden, her granddaughter Mina M. Delos Reyes allegedly obtained TCT No. 156304 and mortgaged the property without the spouses' knowledge and consent.

Sometime in 2005, the spouses discovered and verified with the Register of Deeds of Tarlac that a Deed of Donation purporting to show that they had donated the property to Delos Reyes had been filed. TCT No. 156304 was cancelled and TCT No. 292249 was issued in Delos Reyes' name. Delos Reyes and her husband Rodrigo A. Rodrigo then conveyed the property to Quesada through a Deed of Absolute Sale dated June 16, 2000, and TCT No. 335024 was issued in Quesada's name. The spouses confronted Delos Reyes, who promised to return the title, but she died on May 20, 2005 before accomplishing her promise.

The spouses denied executing the Deed of Donation and alleged that it was falsified. They also alleged that the June 16, 2000 Deed of Absolute Sale was forged because Rodrigo was in Hawaii, United States of America at the time and could not have participated in the transaction. They claimed that Delos Reyes and Quesada, who was the live-in partner of Delos Reyes' brother Marcelino Delos Reyes, colluded in transferring the title of the subject property.

Quesada maintained that she was the owner of the subject property and a purchaser in good faith and for value. According to her, on May 24, 1995, the Spouses Coronel executed a Deed of Donation in favor of Delos Reyes in consideration of her services, care, and help to Asuncion and her mother. Delos Reyes later obtained a loan from the First Provincial Development Bank and secured it through a mortgage of the property in favor of the bank; when Delos Reyes failed to pay, the bank foreclosed the property, and Quesada financially assisted Delos Reyes in redeeming it. On June 16, 2000, Delos Reyes executed a Deed of Absolute Sale in Quesada's favor. Quesada also presented Reynaldo's letter to the Register of Deeds of Tarlac requesting to annotate on TCT No. 229249 the right-of-way granted to them by Delos Reyes, and Delos Reyes' Affidavit granting a perpetual road right-of-way to the Spouses Coronel.

After the Spouses Coronel formally offered their evidence, Quesada filed a Motion to Dismiss on a Demurrer to Evidence on March 4, 2014, contending that they failed to prove their cause of action. The RTC found that more than ten years had lapsed from the 1995 donation to the September 1, 2011 complaint; that no evidence corroborated the spouses' claim of possession from 1980 to 2011 aside from Asuncion's self-serving testimony; that Asuncion admitted an agreement with Delos Reyes regarding a road right-of-way; and that mere denial did not support forgery or overcome the presumption of regularity and due execution of the notarized deed of donation. The CA likewise found that forgery was not proven, that Quesada was not shown to be a bad-faith purchaser, and that there was no proof of actual and continuous possession.

• Review of Factual Findings: Petitioners argued that the petition for review allows a review of the factual findings of the lower courts and that the case presents an exception to the rule on the Supreme Court's power to review decisions of the Court of Appeals via a petition for review.
• Sufficiency for Reconveyance: Petitioners maintained that they sufficiently established all the elements to warrant reconveyance of the subject property, claiming absolute ownership under TCT No. 156304 and alleging that registration in Quesada's name was obtained through fraud because the Deed of Sale and the Deed of Donation were absolutely simulated or fictitious.
• Forgery: Petitioners insisted that their denial, coupled with the substantial difference between the alleged forged signatures and their genuine signatures in their pleadings, and the apparent discrepancy between Rodrigo's supposed signature in the deed of sale and his signature samples, was sufficient to establish forgery; they claimed no title was conveyed to Delos Reyes.
• Non-compliance with Formalities: Petitioners argued that the deeds did not comply with Act No. 496, or the Land Registration Act, which requires every deed of conveyance to be signed by the person executing it in the presence of two witnesses, and that the deeds cannot be considered public documents due to the defects.
• Bad Faith of Quesada: Petitioners asserted that Quesada was not an innocent purchaser because it was impossible for her, given her close relationship with Delos Reyes, not to know that Delos Reyes was not the true owner of the property.
• Prescription and Possession: Petitioners asseverated that the action for reconveyance had not prescribed; that Asuncion's testimony on actual and continuous possession was sufficient and unrebutted; and that their action is based on void contracts, which does not prescribe.

• Ownership and Good Faith: Quesada maintained that she was the owner of the subject property and a purchaser in good faith and for value.
• Valid Donation and Sale: Quesada claimed that on May 24, 1995, the Spouses Coronel executed a Deed of Donation in favor of Delos Reyes in consideration of her services, care, and help to Asuncion and her mother; that Delos Reyes later obtained a loan from the First Provincial Development Bank secured by a mortgage, the bank foreclosed the property when Delos Reyes failed to pay, and Quesada financially assisted Delos Reyes in redeeming it; and that on June 16, 2000, Delos Reyes executed a Deed of Absolute Sale in Quesada's favor.
• Supporting Documents: Quesada presented Reynaldo's letter to the Register of Deeds of Tarlac requesting annotation on TCT No. 229249 of the right-of-way granted to them by Delos Reyes, and Delos Reyes' Affidavit granting a perpetual road right-of-way to the Spouses Coronel.
• Insufficiency of Petitioners' Evidence: Quesada filed a Motion to Dismiss on a Demurrer to Evidence contending that the Spouses Coronel failed to prove their cause of action.

• Review of Factual Findings: Whether the petition for review on certiorari allows a review of the factual findings of the lower courts and whether the case presents an exception to the rule on the Supreme Court's power to review decisions of the Court of Appeals via a petition for review.
• Sufficiency of Evidence for Reconveyance: Whether the evidence presented by petitioners is sufficient to sustain an action for reconveyance.
• Forgery: Whether petitioners sufficiently proved the forgery of the signatures in the Deed of Donation and the Deed of Absolute Sale.
• Prescription: Whether the action for reconveyance has prescribed.
• Innocent Purchaser for Value: Whether petitioners proved that Quesada was not an innocent purchaser for value.
• Possession: Whether petitioners were in actual, continuous, and peaceful possession of the subject property.
• Non-compliance with Formalities: Whether the questioned deeds cannot be considered public documents due to non-compliance with legal formalities.

• Review of Factual Findings: The Court proceeded to review the sufficiency of the evidence because the RTC had granted a demurrer to evidence; the inquiry was whether there was competent or sufficient proof to sustain the complaint.
• Sufficiency of Evidence for Reconveyance: No. The spouses failed to produce sufficient evidence to sustain an action for reconveyance, and the dismissal on demurrer to evidence was affirmed.
• Forgery: No. Forgery was not proved by clear, positive, and convincing evidence; mere denial and belated signature comparisons were insufficient.
• Prescription: The action could not be treated as imprescriptible on the ground that it was based on a void contract because forgery was not established; the lower courts' dismissal was affirmed.
• Innocent Purchaser for Value: No. Petitioners failed to prove that Quesada had actual knowledge of any defect in Delos Reyes' title; the allegation of close relationship was speculative.
• Possession: No. Petitioners failed to prove actual, continuous, and peaceful possession of the subject property.
• Non-compliance with Formalities: Not considered. The issue was raised for the first time in the motion for reconsideration before the Court of Appeals and could not be raised for the first time on appeal.

• Review of Factual Findings: A demurrer to evidence is an objection that the evidence produced by the adversary is insufficient in point of law to make out a case or sustain the issue. In passing upon sufficiency, the court merely ascertains whether there is competent or sufficient proof to sustain the complaint. Because the RTC granted Quesada's demurrer, the Supreme Court examined whether the Spouses Coronel produced sufficient evidence to make out their case. The forgery issue was essentially a question of fact.
• Sufficiency of Evidence for Reconveyance: An action for reconveyance is a legal and equitable remedy granted to the rightful owner of land wrongfully or erroneously registered in another's name to compel transfer of the land to him. It respects the decree of registration as incontrovertible and seeks transfer to the rightful owner. It is based on Section 53, paragraph 3 of Presidential Decree No. 1529, read with Article 1456 of the Civil Code. The spouses failed to clearly establish forgery, Quesada's actual knowledge of a defect in Delos Reyes' title, and their actual, continuous, and peaceful possession. Thus, they did not produce sufficient evidence to sustain reconveyance.
• Forgery: Forgery cannot be presumed; it must be proved by clear, positive, and convincing evidence, and the burden lies on the party alleging it. The spouses relied on Asuncion's denial and alleged variance in signatures. No witness familiar with the signatures or expert witness was presented, and no samples were offered for independent examination. Under Cesar vs. Sandiganbayan, an accurate examination must dwell on both differences and similarities. Under Section 22, Rule 132, genuineness of handwriting may be proved by a witness who believes it to be the handwriting or by comparison with writings admitted or treated as genuine. The standards of comparison must be as close as possible in time to the questioned signature because age and state of health may affect writing characteristics. Here, the questioned deed was executed on May 24, 1995, while Asuncion's Judicial Affidavit was executed on May 22, 2013 when she was 79 years old, and the complaint's verification was dated August 31, 2011—an almost two-decade disparity. Thus, comparison with signatures in the pleadings was unreliable. As to Rodrigo, none of the evidence, such as identification cards and a pawnshop receipt, was issued in the same period as the deed of absolute sale, and he admitted using different signatures during his lifetime. Forgery was therefore not established.
• Prescription: An action for reconveyance based on an implied or constructive trust prescribes in ten years from the issuance of the certificate of title, but prescription does not run against a claimant in actual, continuous, and peaceful possession because the action is in the nature of a suit for quieting of title, which is imprescriptible. An action for reconveyance based on a void contract, as when there was no consent on the part of the alleged vendor, is imprescriptible. Whether prescription applies depends on the nature of the action. The spouses alleged forgery, making the action one based on a void or inexistent contract. The resolution of prescription therefore hinged on whether the signatures were forged. Since forgery was not proven, the action could not be treated as imprescriptible on that ground, and the dismissal was affirmed.
• Innocent Purchaser for Value: No one can transfer a right greater than what he has, but a forged deed can legally be the root of a valid title when an innocent purchaser for value intervenes. A purchaser in good faith buys property without notice of another's right or interest and pays a fair price before notice of adverse claims. Every person dealing with registered land may rely on the correctness of the certificate of title, unless he has actual knowledge of facts and circumstances that would impel a reasonably cautious person to inquire. The burden of proving the status of a purchaser in good faith lies upon the one who asserts that status. Here, no evidence showed that Quesada was aware of the circumstances surrounding the property; nothing in the certificate of title under Delos Reyes' name revealed other claims. The allegation that the close relationship between Delos Reyes and Quesada indicated knowledge of a defect in Delos Reyes' title was purely speculative. Petitioners thus failed to prove bad faith.
• Possession: The spouses claimed actual and continuous possession since 1980, but Asuncion's testimony was their only evidence. Antonio, the tenant, knew of a different owner before he approached the spouses to lease the property; he acknowledged that Delos Reyes and her family lived in the subject property before he first noticed it vacant in 2006; and he was only aware that the spouses owned the lot at the back because he never saw them occupy the subject property. No evidence of possession was presented prior to Antonio's occupancy sometime in August 2010. Mere allegation is not evidence, and each party must prove affirmative allegations by a preponderance of evidence. The spouses' evidence had to stand on its own merit and was not rendered conclusive simply because it was unrebutted. Possession was therefore not established.
• Non-compliance with Formalities: The issue of non-compliance with legal formalities was raised for the first time in the motion for reconsideration of the CA Decision. Issues not raised in the court a quo cannot be raised for the first time on appeal without violating the basic rules of fair play, justice, and due process. Exceptions exist when the factual bases are subject of judicial notice or had already been judicially admitted. Here, the issue was not mentioned in the complaint, Asuncion did not assert it during her testimony, and it was neither judicially noticed nor judicially admitted. The Court therefore did not consider it.

• Action for reconveyance — A legal and equitable remedy granted to the rightful owner of land wrongfully or erroneously registered in another's name, compelling the latter to transfer or reconvey the land. It respects the decree of registration as incontrovertible and seeks transfer to the rightful owner. It is based on Section 53, paragraph 3 of Presidential Decree No. 1529, read with Article 1456 of the Civil Code. In this case, the remedy was invoked but failed because the alleged forgery was not proved.
• Prescription of action for reconveyance — The prescriptive period for reconveyance of fraudulently registered real property is ten years from the issuance of the certificate of title under Article 1144(2) of the Civil Code. Prescription does not run against a claimant in actual, continuous, and peaceful possession because the action is in the nature of a suit for quieting of title, which is imprescriptible. An action based on a void contract, as when there was no consent on the part of the alleged vendor, is also imprescriptible. Whether prescription applies depends on whether the action is founded on an implied or constructive trust or on a void or inexistent contract. Here, because forgery was not established, the action could not be treated as imprescriptible on the ground of a void contract.
• Forgery — Forgery cannot be presumed and must be proved by clear, positive, and convincing evidence; the burden lies on the party alleging it, who must establish the case by a preponderance of evidence. An accurate examination must dwell on both differences and similarities in the questioned signatures. The standards of comparison must be as close as possible in time to the questioned signature because the passing of time and increase in age may affect writing characteristics. Mere denial and comparison with signatures executed almost two decades later are insufficient. This doctrine was applied to reject the spouses' forgery claim.
• Presumption of regularity of notarized documents — A document acknowledged before a notary public is a public document that enjoys the presumption of regularity. It is prima facie evidence of the truth of the facts stated therein and a conclusive presumption of its existence and due execution. The presumption may be rebutted only by evidence so clear, strong, and convincing as to exclude all controversy as to falsity. 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 as a voluntary act. Here, Asuncion's bare testimony did not overcome the presumption.
• Innocent purchaser for value — A forged deed can legally be the root of a valid title when an innocent purchaser for value intervenes. A purchaser in good faith buys property without notice of another's right or interest and pays a fair price before notice of adverse claims. Every person dealing with registered land may rely on the correctness of the certificate of title, unless he has actual knowledge of facts and circumstances that would impel a reasonably cautious person to inquire. The burden of proving the status of a purchaser in good faith lies upon the one who asserts that status. In this case, no evidence showed Quesada had actual knowledge of a defect in Delos Reyes' title; the close relationship allegation was speculative.
• Demurrer to evidence — An objection or exception that the evidence produced by the adversary is insufficient in point of law to make out a case or sustain the issue. It challenges the sufficiency of the plaintiff's evidence. In passing upon it, the court merely ascertains whether there is competent or sufficient proof to sustain the complaint. The dismissal on demurrer was affirmed because the spouses failed to produce sufficient evidence.
• Issues raised for the first time 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. Exceptions are when the factual bases are subject of judicial notice or had already been judicially admitted. The non-compliance-with-formalities issue was not considered because it was raised only in the motion for reconsideration before the CA.
• Burden of proof and mere allegation — Each party must prove affirmative allegations by a preponderance of evidence; mere allegation is not evidence. Parties must rely on the strength of their own evidence, not on the weakness of the opponent's defense. The spouses' evidence was not rendered conclusive simply because it was unrebutted. This supported the finding that possession was not established.

• "Settled is the rule that forgery cannot be presumed and must be proved by clear, positive and convincing evidence, thus, the burden of proof lies on the party alleging forgery. One who alleges forgery has the burden to establish his/her case by a preponderance of evidence." — States the quantum and burden for forgery, which was fatal to petitioners' claim.
• "The closeness or proximity of the time in which the standards used had been written to that of the inspected signature or document is very important to bring about an accurate analysis and conclusion. The selection of the proper standards of comparison is of paramount importance specially if we consider the age and state of health of the author of the questioned signatures." — Explains why the almost two-decade gap between the questioned deed and the signatures in the pleadings made comparison unreliable.
• "An action for reconveyance is a legal and equitable remedy granted to the rightful owner of land which has been wrongfully or erroneously registered in the name of another for the purpose of compelling the latter to transfer or reconvey the land to him." — Defines the remedy and frames the requisites the spouses failed to establish.
• "A forged deed can legally be the root of a valid title when an innocent purchaser for value intervenes." — States the exception to the rule that no one can transfer a greater right than he has, relevant to Quesada's status.

• Cesar vs. Sandiganbayan, 219 Phil. 87, 106 (1985) — Cited for the rule that an accurate examination to determine forgery must dwell on both the differences and similarities in the questioned signatures.
• Reyes vs. Vidal, 91 Phil. 126 (1952) — Cited for the rule that the standards of comparison must be as close as possible in point of time to the questioned signature because age and state of health affect writing characteristics.
• Choa vs. Choa, 441 Phil. 175, 183 (2002) — Cited for the definition of a demurrer to evidence as an objection that the adversary's evidence is insufficient in point of law to make out a case or sustain the issue.
• Hi-Tone Marketing Corp. vs. Baikal Realty Corp., 480 Phil. 545, 573 (2004) — Cited for the definition of an action for reconveyance as a legal and equitable remedy to compel transfer of land wrongfully or erroneously registered in another's name.
• Uy vs. Court of Appeals, et al., 769 Phil. 705, 721 (2015) — Cited for the rule that an action for reconveyance based on a void contract, as when there was no consent on the part of the alleged vendor, is imprescriptible, and that prescription depends on the nature of the action.
• Spouses Santos vs. Spouses Lumbao, 548 Phil. 332, 349 (2007) — Cited for the rule that a notarized document is a public document enjoying the presumption of regularity, and that one denying due execution has the burden of proving non-appearance before the notary.
• Rufloe, et al. vs. Burgos, et al., 597 Phil. 261, 270 (2009) — Cited for the exception that a forged deed can legally be the root of a valid title when an innocent purchaser for value intervenes.
• Tolentino, et al. vs. Spouses Latagan, et al., 761 Phil. 108, 134 (2015) — Cited for the definition of a purchaser in good faith and the rule that a person dealing with registered land may rely on the certificate of title unless circumstances require inquiry.
• Salao vs. Court of Appeals, 348 Phil. 529, 535 (1998) — Cited for the rule that issues not raised in the court a quo cannot be raised for the first time on appeal.
• Borromeo vs. Mina, 710 Phil. 454, 461-462 (2013) — Cited for the exceptions to the rule against raising new issues on appeal, such as when the factual bases are subject of judicial notice or judicially admitted.

• Section 53, paragraph 3, Presidential Decree No. 1529 — Provides that in all cases of registration procured by fraud, the owner may pursue all legal and equitable remedies against the parties to such fraud without prejudice to the rights of any innocent holder for value of a certificate of title; after entry of the decree of registration, any subsequent registration procured by a forged duplicate certificate of title, or a forged deed or other instrument, shall be null and void. The Court cited this as the basis for an action for reconveyance.
• Article 1456, Civil Code — Provides that if property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. The Court read this with Section 53, paragraph 3 of Presidential Decree No. 1529 in discussing reconveyance.
• Article 1144(2), Civil Code — Requires actions upon an obligation created by law to be brought within ten years from the time the right of action accrues. The Court used this to state the prescriptive period for reconveyance of fraudulently registered real property.
• Section 22, Rule 132, Rules of Court — Provides how the genuineness of handwriting may be proved: by any witness who believes it to be the handwriting of a person because he has seen the person write or has seen writing purporting to be his upon which the witness has acted or been charged, or by comparison 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. The Court applied this to hold that the spouses' evidence was insufficient to prove forgery.
• Act No. 496 (Land Registration Act) — Invoked by petitioners for the requirement that every deed of conveyance be signed by the person executing it in the presence of two witnesses. The Court did not resolve the issue because it was raised for the first time on appeal.

Justice Leonen and Justice A. Reyes, Jr. concurred. Justice Hernando was on wellness leave, and Justice Inting was on leave.