HEIRS OF MARGARITA PRODON, PETITIONERS, VS. HEIRS OF MAXIMO S. ALVAREZ AND VALENTINA CLAVE, REPRESENTED BY REV. MAXIMO ALVAREZ, JR., RESPONDENTS.

Heirs of Margarita Prodon versus Heirs of Maximo Alvarez

The Case

This is a petition for review on certiorari brought by the heirs of Margarita Prodon against the heirs of the late spouses Maximo Alvarez, Senior, and Valentina Clave. The respondents, as plaintiffs below, sued to quiet title over a parcel of land in Manila, asking that an annotation on their parents' certificate of title be cancelled because the deed of sale with right to repurchase to which it refers never existed. The case matters for two reasons: it is a clean lesson on when the Best Evidence Rule applies, and it shows that an action to quiet title may rest on the mere inexistence of the instrument casting the cloud, in which case the terms of that instrument are not the subject of the inquiry at all.

Procedural History

The respondents filed a complaint for quieting of title and damages in the Regional Trial Court of Manila, Branch 35. On November 5, 1997, the trial court dismissed the complaint, finding that the deed of sale with right to repurchase had been duly executed and existed, and that its contents could be proved by secondary evidence because the original had been lost without bad faith on the part of the offeror. The respondents appealed. On August 18, 2005, the Court of Appeals reversed the trial court, holding that the prerequisites for the admission of secondary evidence had not been complied with, and ordered the cancellation of the annotation. The heirs of Margarita Prodon, who had died in the meantime, moved for substitution and reconsideration; the Court of Appeals allowed the substitution but denied reconsideration. The heirs then came to the Supreme Court by petition for review on certiorari.

Facts

The parents of the respondents, the spouses Maximo Alvarez, Senior, and Valentina Clave, were the registered owners of a parcel of land covered by a transfer certificate of title in the Registry of Deeds of Manila. They possessed the property during their lifetime, and upon their deaths their children continued in possession as heirs and paid the real property taxes. The owner's duplicate copy of the title could not be located, but the original on file with the registry was intact. That original bore an annotation, entered on September 10, 1975, recording a sale with right to repurchase in favor of Margarita Prodon for 120,000 pesos, with the registered owner reserving the right to repurchase within six months from execution.

The respondents claimed that the annotation had been maliciously made, because the deed of sale with right to repurchase it referred to did not exist. Margarita Prodon answered that the late Maximo Alvarez, Senior, had executed the deed on September 9, 1975, that it had been registered and annotated, and that she had become the absolute owner when the property was not repurchased within the six-month period. During trial, the custodian of the registry's records attested that the copy of the deed could not be found in the files.

The trial court believed Prodon, crediting her testimony, the notarial register of the notary who prepared the deed, and the primary entry book of the registry, and finding that the original had been lost. The Court of Appeals thought otherwise, noting that Maximo Alvarez, Senior, had been hospitalized shortly before the alleged signing, was paralyzed on half of his body and blind from cataract, and died in October 1975; that Prodon never took possession, never paid realty taxes, and never caused the title to be transferred to her name; and that the loss of the original had not been sufficiently shown.

Issues

• Whether or not the prerequisites for the admission of secondary evidence had been complied with.
• Whether or not the late Maximo Alvarez, Senior, had been physically incapable of personally executing the deed of sale with right to repurchase.
• Whether or not Prodon's claim of ownership was already barred by laches.

Applicable Provisions

Section 3, Rule 130 of the Rules of Court embodies the Best Evidence Rule:

Section 3. Original document must be produced; exceptions. — When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases: (a) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror; (b) When the original is in the custody or under control of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice; (c) When the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time and the fact sought to be established from them is only the general result of the whole; and (d) When the original is a public record in the custody of a public officer or is recorded in a public office.

This provision governs the entire dispute, because the Court holds that it applies only when the contents of a document are the subject of the inquiry, and here they were not.

Ruling

On the first issue, the Court held that both the trial court and the Court of Appeals misapplied the Best Evidence Rule. The rule applies only when the terms of a writing are in issue. When the evidence concerns external facts, such as the existence, execution, or delivery of the writing, without reference to its terms, the rule cannot be invoked, and secondary evidence may be admitted even without accounting for the original. In an action to quiet title based on the inexistence of a deed, the terms of the deed are not the subject of the inquiry; what is in issue is whether the deed existed and was executed at all. Hence the Court of Appeals did not have to pass on the prerequisites for secondary evidence, but only on whether existence and execution had been proved by preponderance of evidence.

On the second issue, however, the Court held that Prodon did not preponderantly establish the existence and due execution of the deed. Although the Best Evidence Rule did not apply, good trial tactics still required her to explain the loss of the original, since the deed was the foundation of her defense. Her evidence on the loss fell short, and the circumstances found by the Court of Appeals cast serious doubt on the deed's existence and execution.

On the third issue, the Court held that Prodon's claim of ownership was barred by laches, her inaction from 1975 to 1996 being inconsistent with that of a legitimate owner.

Doctrine

The Best Evidence Rule applies only when the terms of a written document are the subject of the inquiry. When the issue concerns external facts, such as the existence, execution, or delivery of a writing, without reference to its terms, the rule does not apply, and secondary evidence is admissible even without accounting for the original. In an action to quiet title grounded on the inexistence of a deed, the terms of the deed are not in issue, so the offeror need not satisfy the prerequisites for secondary evidence; the question is simply whether existence and execution have been proved by preponderance of evidence. To prosper, an action to quiet title requires that the plaintiff have a legal or equitable title to the property, and that the deed, claim, or proceeding casting the cloud be shown to be in fact invalid or inoperative despite its prima facie appearance of validity.

Disposition

The petition was denied, and the decision of the Court of Appeals cancelling the annotation and removing the cloud on the respondents' title was affirmed.

Remember This

The line to memorize is that the Best Evidence Rule applies only when the terms of a writing are in issue, not when the question is whether the writing ever existed. Examiners use this case to test the boundary between the Best Evidence Rule and the preponderance standard in actions to quiet title.