RUFINO B. REQUINA, SR., AND ALLAN EREÑO, DULY REPRESENTED BY LENY B. EREÑO, AS ATTORNEY-IN-FACT, PLAINTIFFS-APPELLEES, VS. ELEUTERIA ERASMO, DEFENDANT-APPELLANT.

Requina versus Erasmo

The Case

This is a case about a single parcel of unregistered land in Cebu City and two competing claims of ownership over it. Rufino Requina, Senior, and Allan Ereño, the plaintiffs-appellees, sued Eleuteria Erasmo, the defendant-appellant, asking the trial court to declare null and void a deed of sale that Erasmo claimed to have received from the Bagano spouses, and to declare the plaintiffs the true owners of the lot. The case matters because it gathers in one decision several rules a Bar candidate must hold at once: the burden of proving forgery, the weight of a notarized deed, the meaning of preponderance of evidence, and the precise reach of the double-sale rule in Article 1544 of the Civil Code, which the Court holds does not apply to unregistered land.

Procedural History

The plaintiffs filed a complaint for declaration of nullity of deed of sale, with a prayer for a better right of possession and ownership and for preliminary injunction, before Branch 9 of the Regional Trial Court of Cebu City. The trial court rendered judgment in favor of the plaintiffs. It declared void the deeds of sale in favor of Erasmo conveying 245 square meters, declared valid and binding the affidavit of adjudication of sole heir executed by Rosalita Bagano Nevado, and declared the plaintiffs the true co-owners in fee simple over the portion covered by the adjudication with sale dated March 15, 1994. Erasmo moved for reconsideration, and the motion was denied. She then filed a notice of appeal, which the trial court gave due course, and the case went up to the Supreme Court on appeal.

Facts

Florentino Bagano owned a residential lot along Urgello Street in Barangay Sambag I, Cebu City. Upon his death, the lot was inherited by his sole heir, Rosalita Bagano Nevado. The plaintiffs owned a house erected on a 102 square meter portion of that lot, which they had bought from a certain Doctor Enrique Hipolito, Senior. In 1994, they acquired that 102 square meter portion from Rosalita through an affidavit of adjudication by sole heir of the estate of the deceased person with sale over a portion thereof, dated March 15, 1994.

On the other side, Erasmo claimed that as early as November 17, 1989, she had acquired the lot from the spouses Florentino and Aurelia Bagano through a deed of sale executed in her favor, which Rosalita herself witnessed. She said she had been paying the realty taxes, including the arrears of the spouses, since 1980. After a big fire on Urgello Street razed the house, Erasmo caused the preparation of a deed of sale over a portion of residential land purportedly executed by Florentino Bagano and dated November 17, 1989, and she filed an ejectment case before the Lupong Tagapamayapa of Barangay Sambag I, where no conciliation was reached.

The trial court found for the plaintiffs, doubting the deed of sale because of the notarial records, the failure to register, the absence of the deed from the archives, and an expert finding of forgery on the signature of Florentino Bagano. Erasmo appealed, assigning as errors the declaration of nullity of her deed and the declaration of the plaintiffs as co-owners.

Issues

• Whether or not the deed of absolute sale executed by the Bagano spouses in favor of Eleuteria Erasmo is spurious.
• Whether or not the plaintiffs-appellees have a better right of ownership over the subject lot on the strength of the affidavit of adjudication with sale executed by Rosalita in their favor and its registration.
• Whether or not Article 1544 of the Civil Code on double sale applies to the case.

Applicable Provisions

Article 1544 of the Civil Code provides:

Article 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.

The Court holds that this provision does not govern, because it contemplates a double sale by one and the same vendor, and does not apply to unregistered land.

Article 1370 of the New Civil Code provides:

Article 1370. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control.

The Court uses this to hold that the plain stipulations of the deed of sale cannot be superseded by unsupported allegation.

Section 9 of Rule 130 of the Rules of Court provides:

Section 9. Evidence of written agreements. When the terms of an agreement have been reduced to writing, it is considered as containing all the terms agreed upon and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.

This supports the rule that the written deed contains all the terms agreed upon by the parties.

Act Number 3344, as amended, provides for the recording of instruments relating to land not registered under the Land Registration Act, and expressly declares that any registration made shall be without prejudice to a third party with a better right. This is the law that applies to the registration made by the plaintiffs over unregistered land.

Ruling

On the first issue, the Court holds that there was a valid sale between the Bagano spouses and Erasmo, and that the plaintiffs failed to prove forgery. The Court explains that the authenticity of a questioned signature cannot be determined solely upon its general characteristics, similarities or dissimilarities with the genuine signature, and that the result of examination of questioned handwriting, even with the aid of experts and scientific instruments, is at best inconclusive. Forgery cannot be presumed and must be proved by clear, positive and convincing evidence, and the burden lies on the party alleging it. The Court also notes that the signature of Florentino Bagano in the questioned deed matches his signatures in the acknowledgment receipts for installment payments and in the partition agreement among his siblings, and that the signature of Rosalita as witness is identical to her signatures elsewhere. The certification of the Records Management and Archives Office that the deed was not among the documents transferred to it does not affect the validity of the sale, for the failure of a notary public to furnish a copy of the deed to the appropriate office is a ground for disciplining him, but certainly not for invalidating the document. A notarized document carries the presumption of regularity, which may only be rebutted by evidence so clear, strong and convincing as to exclude all controversy as to the falsity of the certificate. The Court also finds nothing questionable in the sale of a 195 square meter portion when there had been a previous sale of 50 square meters in the same year, the two sales together making 245 square meters. Payment of real property taxes is not proof of ownership, but it is a usual burden attached to ownership, and coupled with the valid execution of the contract of sale it confirms Erasmo's ownership.

On the second issue, the Court holds that the plaintiffs' evidence is not sufficient to sustain their cause of action. In civil cases the burden of proof is on the plaintiff to establish the case by preponderance of evidence, which means that the evidence as a whole adduced by one side is superior to that of the other, the greater weight of the credible evidence. Even if the plaintiffs' evidence were stronger than the defendant's, judgment cannot be entered in their favor if that evidence is not sufficient to sustain their cause of action.

On the third issue, the Court holds that Article 1544 does not apply. It applies where the same thing is sold to different vendees by the same vendor, not where the same thing is sold to different vendees by different vendors, and it does not apply to sales involving unregistered land. What applies is Act Number 3344, under which registration is without prejudice to a third party with a better right. Hence, the registration by the plaintiffs of the transfer made by Rosalita in their favor does not confer ownership on them. With the valid sale made by the Bagano spouses to Erasmo, Rosalita could not possibly sell the same lot to the plaintiffs. The Court states the maxim: no one can give what one does not have, nemo dat quod non habet. One can sell only what one owns or is authorized to sell, and the buyer can acquire no more right than what the seller can transfer legally. Thus, the subsequent sale by Rosalita in favor of the plaintiffs is null and void.

Doctrine

First, forgery cannot be presumed and must be proved by clear, positive and convincing evidence, and the burden of proof lies on the party alleging forgery; expert handwriting examination is at best inconclusive. Second, a notarized document carries the presumption of regularity as to its due execution, rebuttable only by clear, strong and convincing evidence, and the failure of the notary to furnish a copy to the archives does not invalidate the deed. Third, in civil cases the plaintiff must establish the case by preponderance of evidence, meaning the greater weight of the credible evidence, and a judgment cannot be entered in the plaintiff's favor if the evidence is not sufficient to sustain the cause of action. Fourth, Article 1544 on double sale applies only where the same thing is sold to different vendees by the same vendor, and it does not apply to unregistered land, to which Act Number 3344 applies, and registration under that Act is without prejudice to a third party with a better right. Fifth, under the maxim nemo dat quod non habet, no one can give what one does not have, so a sale by one who is no longer the owner is null and void.

Disposition

The appeal is granted, the decision of the trial court is reversed and set aside, and the complaint is dismissed for lack of merit, leaving Erasmo as the owner under the valid sale.

Remember This

Memorize the line that Article 1544 on double sale does not apply to unregistered land, and that registration under Act Number 3344 is without prejudice to a third party with a better right. Examiners like to use this case to test the burden of proving forgery, the presumption of regularity of notarized deeds, and the rule of nemo dat quod non habet against a later sale by one who no longer owns the property.