FELICIDAD T. GALLOR, PLAINTIFF-APPELLANT, REYNALDO P. MATAWARAN AND AILEEN MATAWARAN, DEFENDANTS-APPELLEES.
VELOSO, J.:
On appeal by plaintiff Felicidad T. Gallor (“Gallor”) is the Decision[1] dated June 29, 2011 of the Regional Trial Court of Dinalupihan, Bataan[2] (“RTC”) in Civil Case No. DH-1201-09, entitled “Felicidad T. Gallor, Plaintiff versus Reynaldo P. Matawaran and Aileen Matawaran, Defendants,” the dispositive portion of which reads:
“WHEREFORE, premises considered, the Court hereby resolves to DENY the instant complaint for lack of merit.
No pronouncement as to costs.
SO ORDERED.”[3]
The Facts
This is an action for Rescission of Contract, Annulment of Mortgage, Annulment of Certificate of Sheriff’s Sale, Damages with Prayer for Writ of Injunction and/or Temporary Restraining Order[4] filed by plaintiff Felicidad T. Gallor (“Gallor”) against defendants Reynaldo P. Matawaran and Aileen Matawaran (“Spouses Matawaran”) on May 29, 2009, involving a parcel of land located at Purok 5, New San Jose, Dinalupihan, Bataan, covered by Transfer Certificate of Title No. T-214921 of the Register of Deeds for the province of Bataan. The antecedent facts, as culled from the assailed Decision, are as follows:
“In sum, the Complaint states that plaintiff is the true and registered owner of a parcel of land located at Purok 5, New San Jose, Dinalupihan, Bataan now covered by TCT No. T-214921; after plaintiff’s husband died, plaintiff and her six (6) children executed an extra-judicial settlement and adjudicated in favor of plaintiff alone the subject parcel of land and its improvements described as TCT No. CLOA-740 and following such extra-judicial partition, on February 14, 2001, the subject properties were registered in the name of plaintiff alone; TCT No. T-214921 carries three (3) encumbrances annotated on its face, particularly the provisions of Section 44 of the Property Registration Decree (PD 1529) and Section 4, Rule 74 of the Rules of Court and the condition that it should not be sold, transferred or conveyed except through hereditary succession, or to the Government, or to the Land Bank of the Philippines, or to other qualified beneficiaries for a period of ten (10) years; sometime in February 2001, plaintiff obtained a loan of P100,000.00 from Land Bank of the Philippines (LBP) and to secure payment thereof, plaintiff mortgaged the subject properties to LBP; sometime in 2004, defendant Reynaldo Matawaran agreed to buy the subject parcel of land for P800,000.00, knowing that the said properties were mortgaged to LBP; sometime in March 2004, defendant paid the plaintiff P300,000.00 as initial payment and promised to pay the balance after a few days; defendant then paid the loan of P100,000.00 with the LBP; defendant then asked the plaintiff to sign a document entitled Real Estate Mortgage (REM) dated March 23, 2004 but plaintiff refused to sign as the document does not reflect their agreement of sale and because it carried a 5% interest which they did not agree upon; defendant deceived the plaintiff and employed fraud and deceitful machinations in convincing the latter to sign the REM; defendant Reynaldo reneged with his promise to pay the P500,000.00 balance and instead proposed to pay in installment at P10,000.00 monthly, to which the plaintiff agreed; defendant paid only two (2) monthly installments at P10,000.00 plus P2,000.00, after which defendant refused to pay; sometime in February 2007, defendant Reynaldo filed with the RTC-Dinalupihan a petition for extrajudicial foreclosure, which was granted, hence[,] the Certificate of Sale dated March 23, 2007; on March 24, 2009, defendant Reynaldo filed a petition for issuance of writ of possession docketed as DH-1195-09; the agreement of sale of the subject parcel of land is a prohibited act under the Comprehensive Agrarian Reform Law and violates Section 44 of PD 1529; plaintiff did not realize and was unwittingly unaware that the sale agreement that she and defendant Reynaldo entered into was prohibited by law; and plaintiff manifests her good faith and willingness to return to defendant Reynaldo the sum of P322,000.00 that the latter paid to plaintiff. Further, in support of prayer for issuance of preliminary injunction and/or temporary restraining order, the complaint states that without admitting the validity of the REM, the house built on the subject lot is not included in the said REM and plaintiff continues to be its absolute owner; the filing of the petition for issuance of writ of possession by the defendant would violate plaintiff’s rights to the subject lot as the absolute and registered owner thereof as well as her rights over the house and all improvements found thereon; plaintiff as owner has the absolute and inalienable right to possession thereof; to allow defendant Reynaldo to obtain a writ of possession will indubitably violate the rights to possession of plaintiff and will inflict grave and irreparable injury to plaintiff; considering that the rights to the possession of the said parcel of land and all improvements thereon are indubitable that need to be protected, said rights being en esse in contemplation of law, there is an extreme urgency for the writ of preliminary injunction or TRO to issue in order to (i) preserve and protect the rights of the plaintiff and (ii) avoid and stop infliction of any damage or injury that plaintiff may unnecessarily suffer; plaintiff is willing to post a bond for the issuance of the writ of preliminary injunction or TRO should the Court require; and as a consequence of the unlawful and fraudulent acts of defendant Reynaldo, plaintiff suffered damages for which defendants must be adjudged liable to answer and pay.
Summons was served to the defendants on June 2, 2009. Hence, on June 16, 2009, defendants filed their Answer praying in the main that the prayer for writ of preliminary injunction be denied for lack of merit, the case be dismissed for lack of cause of action, and for the plaintiff to pay defendant the amount of P30,000.00 plus P3,000 per court appearance as attorney’s fees.
Issues having been joined by the filing of the Answer, the pre-trial conference was set on September 8, 2009. Meanwhile, on September 1, 2009, defendants filed a Motion to Dismiss praying that the complaint be dismissed for forum shopping. The pre-trial conference was postponed several times. Meantime, plaintiff filed her Pre-trial Brief on June 10, 2010, but for failure of defendants to file their Pre-trial Brief, the Court upon motion of counsel for the plaintiff allowed the presentation of evidence ex-parte.
After hearing on the Motion to Dismiss, the Court resolved to deny the same on the ground that there is no forum shopping. Meanwhile, the Court granted defendants’ request for substitution of counsel.
At the ex parte presentation of evidence, the plaintiff took the witness stand and testified that she is the plaintiff in this case; she executed a Judicial Affidavit, marked as Exhibit ‘A’ in connection with this case; she affirms and confirms the truthfulness, correctness and veracity of the contents of the said affidavit; she is the registered owner of the subject property embraced by TCT No. T-214921 marked as Exhibit ‘B’; she identified the CLOA (Exhibit ‘C’), copy of REM (Exhibit ‘D’), and certified true copy of the Certificate of Sale (Exhibit ‘E’); before the execution of the REM, Rey Matawaran paid the P100,000.00 loan to Landbank and after she signed the REM, she was paid additional P200,000.00; she confirmed that Rey Matawaran paid her P100,000.00 and P300,000.00 (sic) as well as two (2) P10,000.00 and one (1) P2,000.00 as partial payments for the P500,000.00 balance; she and Rey Matawaran agreed that the subject lot would be for P800,000.00; the subject land is an acquisition through the Department of Agrarian Reform (DAR); she is not aware that there is a restriction in CLOA-740, copy of which is marked as Exhibit ‘C-1’; and for the record, the restriction appearing on Exhibit ‘B’ is marked as Exhibit ‘B-1’. After which, the plaintiff filed her formal offer of evidence.
The Court then issued an Order admitting all the evidence offered by the plaintiff for whatever purposes they may deem worth and submitted the instant case for decision.”[5] (emphasis Ours.)
On July 31, 2009, the RTC rendered the herein assailed Decision dismissing the instant complaint. It explained, viz.:
“Under Article 2085 of the Civil Code, the following are the essential requisites to the contract of mortgage:
As a further requisite, Article 2125 of the Civil Code provides that it is indispensable, in order that a mortgage may be validly constituted, that the document in which it appears be registered in the Office of the Registry of Deeds concerned. It is also of the essence of the contract of mortgage that when the principal obligation becomes due, the property mortgaged cannot be appropriated by the creditor, but most be sold at public auction in accordance with the procedure prescribed by law for the satisfaction of the obligation.
Here, a perusal of the deed of real estate mortgage evidently shows that herein plaintiff is the registered and absolute owner of the subject property (TCT No. T-214921); she has the free disposal of the same; and she mortgaged the said property to secure the fulfillment of an obligation in the amount of P300,000.00 from the defendants. Also, records reveal that the mortgage was validly constituted being registered with the Registry of Deeds of Bataan. The essential requisites of a contract of mortgage being present in the instant case, the subject real estate mortgage between the parties is therefore valid.
It is an elementary rule that the burden of proof is the duty of a party to present evidence on the facts in issue necessary to establish his claim or defense as required by law. Here, except for the bare allegations of the plaintiff that defendant deceived her and employed fraud and machinations in convincing her to sign the REM and that their true agreement was the sale of the subject land, she however failed to submit additional and sufficient evidence to prove such allegations. Her testimony besides being self-serving likewise failed to prove that there were deceit and fraud in the execution of REM.
Therefore, the REM being valid, the subsequent foreclosure of the same, when plaintiff failed to pay her obligation within the stipulated period, is therefore also valid. Thus, the foreclosure proceedings conducted on the mortgaged property of the plaintiff as well as the subsequent issuance of the Certificate of Sale being in accordance with the procedure prescribed by law enjoyed the presumption of regularity in the absence of evidence to the contrary.
Moreover, the contention of the plaintiff that the contract of REM does not contain any special power of authority appointing Reynaldo Matawaran to sell the property provided for under Section 1, Act No. 3135 is belied by the fact that the subject contract specifically carries the provision stating that: X x x OTHERWISE, mortgagor hereby agree that the said REYNALDO P. MATAWARAN, may enforce his rights herein without judicial proceedings by causing the above described property to be sold at public auction x x x in accordance with Act. No. 3135 as amended by Act No. 4118. (Exhibit ‘D’), which allowed defendant Matawaran to foreclose the property in accordance with the said Act.
Further, it is of no moment that the subject land title is subject to three (3) encumbrances annotated on its face, particularly the provisions of Section 44 of the Property Registration Decree (PD 1529); Section 4, Rule 74 of the Rules of Court and the condition that it shall not be sold, transferred or conveyed except through hereditary succession, or to the Government, or to the Land Bank of the Philippines, or to other qualified beneficiaries for a period of ten (10) years. The first encumbrance was already cancelled because the title upon which it was written (TCT No. CLOA-740) was now cancelled by TCT No. T-214921, while the two-year period under Rule 74 of the Rules of Court is already lapsed. The last encumbrance referring to the 10-year prohibition while specifically carried over in the new title (TCT No. T-214921) has already prescribed considering that the same started to run upon issuance of TCT No. CLOA-740 on December 17, 1990.”[6] (emphasis Ours)
Aggrieved, plaintiff moved for reconsideration[7] of the above Decision, but the same was denied by the court a quo in its Order dated November 24, 2011.[8]
Hence, this appeal.
Issues:
In her Brief,[9] plaintiff-appellant Gallor raised the following as issues of the case:
In fine, the sole issue submitted for Our resolution is:
WHETHER OR NOT THE REGIONAL TRIAL COURT GRAVELY ERRED IN DISMISSING THE PRESENT COMPLAINT FOR LACK OF MERIT.
OUR RULING
Plaintiff-appellant seeks to annul the Real Estate Mortgage dated March 23, 2004 executed by and between her, as mortgagor, and defendant-appellee Reynaldo Matawaran (“Reynaldo”), as mortgagee. She contends that in obtaining her signature thereon, defendant-appellee Reynaldo deceived her and employed fraud and machinations[11] as he told her that said document was only a “formality”;[12] that there was actually a contract of sale between them, not a loan transaction;[13] and that defendant-appellee Reynaldo actually paid her a total of P322,000.00 as partial consideration for the contract price of P800,000.00.[14] She thus prays that the subject REM and the accompanying Certificate of Sale dated March 23, 2007, as well as the sales agreement between them, be declared null and void.
We are not convinced.
This Court notes, firstly, that the document being questioned – the Real Estate Mortgage dated March 23, 2004[15] – is a public document, having been notarized by one Atty. Juvy Nell B. Sanchez-Malit who attests to the fact that the parties, plaintiff-appellant Gallor and defendant-appellee Reynaldo Matawaran, personally appeared before him and they executed said deed.[16]
Being a duly notarized document, the aforesaid document enjoys the presumption of authenticity and due execution. It is a settled rule in our jurisdiction that a notarized document has in its favor the presumption of regularity and it carries with it the evidentiary weight of due execution.[17] It is admissible in evidence and is entitled to full faith and credit on its face.[18] Having been prepared and acknowledged before a notary public, the said document is vested with public interest the sanctity of which deserves to be upheld unless overwhelmed by clear and convincing evidence.[19]
Second, aside from plaintiff-appellant Gallor’s self-serving allegation that she signed the purported REM merely as a matter of “formality” and as requested by defendant-appellant Reynaldo,[20] no other evidence was presented to challenge the authenticity of said document. Again, the burden of proof to overcome the presumption of due execution of a notarized document lies on the one contesting said document.[21] Any allegation of forgery or defective notarization – which are both lacking in this case – must be proved by clear and convincing evidence, and whoever alleges it has the burden of proving the same.[22] Having failed to do so, plaintiff-appellant’s argument must, therefore, fail.
Third, plaintiff-appellant’s contention that their transaction was one of sale and not a mortgage hardly persuades Us. For, aside from her self-serving declaration of verbal contract of sale and the unsubstantiated allegation of payments given to her by defendant-appellee Reynaldo in the amount of P322,000.00, as consideration for the alleged sale of the property, no other evidence was presented to prove said sale. Verily, it is a basic rule of evidence that bare allegations, unsubstantiated by evidence, are not equivalent to proof.[23] Mere allegations are not evidence.[24]
Anent the ten-year restriction[25] which appears in the face of the title of the subject parcel of land which was awarded under Republic Act No. 6657, otherwise known as the Agrarian Reform Program, We agree with the observation of the court a quo that the same has already prescribed as said ten-year prohibitory period started to run upon the issuance of Transfer Certificate of Title No. CLOA-740 on December 17, 1990.[26]
It bears stressing that a Certificate of Land Ownership or CLOA is a document evidencing ownership of the land granted or awarded to the beneficiary by DAR, and contains the restrictions and conditions provided for in RA 6657 and other applicable laws.[27] Section 27 of RA 6657, as amended by RA 9700, which provides for the transferability of awarded lands, states:
“SEC. 27. Transferability of Awarded Lands. — Lands acquired by beneficiaries under this ACT may not be sold, transferred or conveyed except through hereditary succession, or to the government, or to the LBP, or to other qualified beneficiaries for a period of ten (10) years: Provided, however, That the children or the spouse of the transferor shall have a right to repurchase the land from the government or LBP within a period of two (2) years. Due notice of the availability of the land shall be given by the LBP to the Barangay Agrarian Reform Committee (BARC) of the barangay where the land is situated. The Provincial Agrarian Coordinating Committee (PARCCOM), as herein provided, shall, in turn, be given due notice thereof by the BARC.”[28] (emphasis Ours)
It is clear from the aforequoted provision that lands awarded to beneficiaries under the Comprehensive Agrarian Reform Program (CARP) may not be sold, transferred or conveyed for a period of ten (10) years.[29] However, the law enumerates four exceptions, i.e. transfer: (1) through hereditary succession; (2) to the government; (3) to Land Bank of the Philippines (LBP); or (4) to other qualified beneficiaries. In short, during the prohibitory 10-year period, any sale, transfer or conveyance of land reform rights is void unless the same is allowed by law to prevent a circumvention of agrarian reform laws.[30]
Since the subject parcel of land was awarded to plaintiff-appellant Gallor on December 17, 1990, the ten-(10) year prohibitory period imposed by law expired on December 17, 2000. Thus, plaintiff-appellant’s argument that the purported REM was executed in violation of the said restriction is bereft of legal basis. The mortgage and sale of the land which took place in 2004 were, clearly, no longer covered by the ten (10)-year restrictive period.
WHEREFORE, the instant appeal is DISMISSED for lack of merit.
SO ORDERED.
Lantion, and Antonio-Valenzuela, JJ., concur.
[1] Records, pages 111-115.
[2] Branch 5.
[3] Records, page 115.
[4] Records, pages 2-11.
[5] Records, pages 111-113.
[6] Records, pages 114-115.
[7] Ibid., pages 116-122.
[8] Ibid., page 148.
[9] Rollo, pages 18-32.
[10] Ibid., pages 27-28.
[11] Records, page 6.
[12] Ibid.
[13] Ibid.
[14] Ibid., pages 6-7.
[15] Ibid., pages 92-94.
[16] Ibid., page 94.
[17] Estanislao vs. Spouses Gudito, G.R. No. 173166, March 13, 2013.
[18] Ibid., citing Ilao-Quianay v. Mapile, G.R. No. 154087, October 25, 2005, 474 SCRA 246, 255; 510 Phil. 736, 747 (2005).
[19] Ibid.
[20] Records, page 81.
[21] Spouses Alcazar vs. Arante, G.R. No. 177042, December 10, 2012, citing Ros v. Philippine National Bank-Laoag Branch, G.R. No. 170166, April 6, 2011, 647 SCRA 334, 343, citing Pan Pacific Industrial Sales Co., Inc. v CA, G.R. No. 125283, February 10, 2006, 482 SCRA 164, 175; 517 Phil. 380, 388-389 (2006).
[22] Ibid.
[23] Real vs. Belo, G.R. No. 146224, January 26, 2007, citing Domingo vs. Robles, G.R. No. 153743, March 18, 2005, 453 SCRA 812, 818; Ongpauco v. Court of Appeals, G.R. No. 134039, December 21, 2004, 447 SCRA 395, 400.
[24] Ibid., citing Mayor vs. Belen, G.R. No. 151035, June 3, 2004, 430 SCRA 561, 567; Marubeni vs. Lirag, 415 Phil 29, 38 (2001).
[25] It reads: “…subject to the condition that it shall not be sold, transferred or conveyed except through hereditary succession, or to the Government, or to the Land Bank of the Phils., or to other qualified beneficiaries for a period of ten (10) years.” See Records, page 84.
[26] Records, page 90.
[27] Lebrudo vs. Loyola, G.R. No. 181370, March 9, 2011.
[28] Ibid.
[29] Ibid.
[30] Ibid.