VERA DEL CAMPO, PLAINTIFF-APPELLEE, VS. SPOUSES CORAZON AND RICARDO CALAQUIAN, JJ. DEFENDANTS-APPELLANTS.

Vera Del Campo versus Spouses Calaquian

The Case

This is an action for nullification of title with damages brought by Vera Del Campo against the spouses Ricardo and Corazon Calaquian, among others, over a parcel of land in Las Piñas City that she says was taken from her through a forged deed of donation. The case matters for two reasons a reviewee must hold onto: it fixes the standard for good faith in a purchaser of registered land, and it teaches the procedural rule on tender of excluded evidence — what happens when a trial court strikes testimony and refuses to act on a party's formal offer of exhibits. It is, in short, a case about who bears the loss when a forged title passes from hand to hand, and about how an appellate court may still look at evidence the trial court shut out.

Procedural History

Vera Del Campo filed her complaint for annulment of title with damages before the Regional Trial Court of Las Piñas City, Branch 255. She later amended it to implead the spouses Benny and Annabelle Condeza as the present transferees and Solid Bank Corporation as mortgagee. Solid Bank moved to dismiss for failure to state a cause of action; the trial court denied the motion. The spouses Condeza, Solid Bank, and the spouses Calaquian filed answers; the defendants Dalandan and Arieta were declared in default.

During trial, after the cross-examination of Ricardo Calaquian was declared terminated, the trial court later issued an order striking his testimony from the record, and it rendered decision without acting on the Calaquians' motion for reconsideration of that order and without admitting their formal offer of documentary evidence. The trial court ruled for Del Campo, held the Calaquians to be purchasers in bad faith, and ordered them, together with Dalandan and Arieta, to pay actual damages, attorney's fees, and costs. It upheld the title of the spouses Condeza as valid and dismissed the complaint against Solid Bank. The Calaquians' motion for reconsideration was denied. They appealed to the Supreme Court, which resolved the appeal on the errors they assigned.

Facts

Vera Del Campo owned a parcel of land in Las Piñas City, covered by a transfer certificate of title in her name, which she had bought from a corporation in October 1992. Needing money to pay arrears on a real estate mortgage loan, she was introduced to Luz Cosme Dalandan, who persuaded her to let the property be sold and obtained her owner's copy of the title. Unknown to Del Campo, Dalandan forged her signature in a deed of donation dated March 19, 1993, making it appear that Del Campo had donated the property to Alicia Arieta. A new title was then issued in Arieta's name.

Arieta later sold the property to the spouses Calaquian by a deed of absolute sale dated December 8, 1993, for 150,000 pesos, and a title was issued in the name of Corazon Calaquian. In July 1996, the Calaquians in turn sold the property to the spouses Condeza, who obtained their own title and later mortgaged the property to Solid Bank.

Upon discovering the fraud, Del Campo sought help from the Office of the President, which referred her to the National Bureau of Investigation. The Bureau examined her purported signature on the deed of donation against her specimen signatures and reported that the signature was not hers. She then sued. At trial, the Calaquians presented the testimony of Ricardo Calaquian and offered documentary exhibits to prove they were purchasers in good faith. His cross-examination was declared terminated upon the manifestation of Del Campo's counsel; the trial court later struck his testimony from the record, never acted on the Calaquians' motion for reconsideration, and never ruled on their formal offer of evidence before deciding the case against them.

Issues

• Whether or not the trial court erred in striking out the testimony of Ricardo Calaquian after his cross-examination had already been declared terminated, and in disregarding the documentary exhibits the spouses Calaquian had formally offered.
• Whether or not the spouses Calaquian were purchasers in good faith and for value of the subject property.
• Whether or not the spouses Calaquian may be held liable to Vera Del Campo for damages.

Applicable Provisions

Section 40, Rule 132 of the Revised Rules on Evidence provides:

Section 40. Tender of excluded evidence. If documents or things offered in evidence are excluded by the court, the offeror may have the same attached to or made part of the record. If the evidence excluded is oral, the offeror may state for the record the name and other personal circumstances of the witness and the substance of the proposed testimony.

This rule governs the Calaquians' remedy when the trial court shut out their testimony and exhibits, and it is the basis for the Supreme Court's holding that a sufficient tender was made.

Ruling

On the first issue, the Court ruled that the striking out was improper. The basic rule is that testimony given on direct examination should be stricken off the record where there was no adequate opportunity for cross-examination. But where a party had the opportunity to cross-examine and failed to avail himself of it, he forfeits that right and the testimony stays on record. Here, Del Campo's counsel himself manifested that he was done, and the court ordered the cross-examination terminated. The failure to cross-examine further was not the witness's fault but that of Del Campo's own counsel. The subsequent order striking the testimony had no factual or legal basis. Nor could the trial court blame the Calaquians, who did file a motion for reconsideration and did make a formal offer of evidence; it was the court that failed to act on both. The Court also rejected the argument that no tender of excluded evidence had been made, holding that the exhibits and the transcript of the direct and partial cross-examination, attached to the records and brought to the trial judge's attention on reconsideration, sufficed under the rule.

On the second issue, the Court ruled that the Calaquians were purchasers in good faith. Good faith consists in the possessor's belief that the person from whom he received the thing was the owner of the same and could convey his title. It is always presumed in the absence of proof to the contrary, and it requires a well founded belief that the person from whom title was received was himself the owner of the land, with the right to convey it. There is good faith where there is an honest intention to abstain from taking any unconscientious advantage from another; it is the opposite of fraud and refers to a state of mind manifested by the acts of the individual concerned. The circumstances the trial court relied on — the sale within a year of the donation, the allegedly low price, the differing signatures — rested on speculation. Nothing showed the Calaquians were given a copy of the deed of donation, and no evidence showed the 1993 price was inadequate.

On the third issue, it follows that the Calaquians, being purchasers in good faith, cannot be held liable for damages to Del Campo.

Doctrine

First, good faith of a purchaser means a well founded belief that the person from whom title was received was himself the owner of the land with the right to convey it; it is presumed absent proof to the contrary, and it is the opposite of fraud. A finding of bad faith cannot rest on speculation about the speed of resale or the adequacy of the price without evidence.

Second, on procedure: testimony on direct examination is stricken only where there was no adequate opportunity to cross-examine. Where the opportunity was given and the party's own counsel waived it, the testimony remains on record.

Third, on tender of excluded evidence under Section 40, Rule 132: when a court excludes evidence, the offeror's recourse is to have the exhibits attached to the record or to state for the record the substance of the excluded testimony. Where the excluded exhibits and transcripts are on the record and the trial judge was apprised of their substance, purpose, and relevancy, a sufficient tender has been made and the appellate court may consider the evidence.

Disposition

The appeal was granted: the spouses Calaquian were declared purchasers in good faith and relieved of liability for damages, with their testimony and documentary evidence considered on appeal.

Remember This

Memorize the line that good faith is a well founded belief that the seller was the owner with the right to convey, presumed unless rebutted by proof and never by speculation. Examiners use this case to test the requisites of a sufficient tender of excluded evidence under Section 40, Rule 132, and the rule that a party who waives cross-examination cannot later have the testimony stricken.