CASE BrieF NO. 2018-0266

CASE: Norma M. Diampoc vs. Jessie Buenaventura and The Registry of Deeds [G.R. No. 200383 March 19, 2018]

PONENTE: Associate Justice Mariano C. Del Castillo

SUBJECT:

  1. New Civil Code
  2. Article 1358: Contracts – Failure to observe the proper form; Effect of defective notarization

The absence of notarization of the deed of sale would not invalidate the transaction.”


FACTS:        Norma M. Diampoc and her husband Wilbur L. Diampoc (the Diampocs) filed a Complaint for annulment of deed of sale against Jessie Buenaventura (Buenaventura) and the Registry of Deeds.

The Diampocs alleged that they owned a parcel of land covered by a TCT; that Buenaventura asked to borrow the owner’s copy of TCT to be used as security for a ₱1M loan she wished to secure; that they acceded, on the condition that Buenaventura should not sell the subject property; that Buenaventura promised to give them ₱300,000.00 out of the ₱1 million loan proceeds; that Buenaventura cause them to sign a folded document without giving them the opportunity to read its contents; that Buenaventura failed to give them a copy of the document which they signed; that they discovered later on that Buenaventura became the owner of a one-half portion of the subject property by virtue of a supposed deed of sale in her favor; that they immediately proceeded to the notary public who notarized the said purported deed of sales and discovered that the said one-half portion was purportedly sold to Buenaventura for ₱200,000.00; and that the deed was secured through fraud and deceit, and thus null and void.

After evaluating the evidence on hand, the Trial Court finds that Diampocs fall short of the required evidence to substantiate their allegations that subject Deed of Sale is illegal and spurious. “The Deed of Sale being a public document, it is prima facie evidence of the facts state therein’. Under the rule, the terms of a contract are rendered conclusive upon the parties and evidence aliunde is not admissible to vary or contradict a complete and enforceable agreement embodied in a document.

Diampocs filed an appeal before the CA, which denied the same. They filed a Motion for Reconsideration, which was, likewise, denied.

In her Petition for Review to the Supreme Court, Diampoc claims that the deed of sale suffers from defects relative to its notarization, which thus render the deed ineffective, if not null and void. She further claims that the deed was not signed by the parties before the notary public; that it was notarized in her and her husband’s absence; that there was only one Community Tax Certificate used for both petitioner and her husband; and that Buenaventura failed to present the notary public as her witness.

Issues:

A.       Whether the Deed of Sale suffers from defects if not notarized.
B.       Whether the Deed of Sale executed by and between the parties should be upheld.
C.       Whether the Court should give merit on the Diampocs allegation that they were induced into signing the Deed of sale without being given the opportunity to read its contents.  

RULING:

A.      The absence of notarization of the deed of sale would not invalidate the transaction evidenced therein”; it merely “reduces the evidentiary value of a document to that of a private document, which requires proof of its due execution and authenticity to be admissible as evidence [Riosa v. Tabaco la Suerte Corporation (2013)]. A defective notarization will strip the document of its public character and reduce it to a private instrument. Consequently, when there is a defect in the notarization of a document, the clear and convincing evidentiary standard normally attached to a duly-notarized document is dispensed with, and the measure to test the validity of such document is preponderance of evidence [Menauza v. Fermin (2014)].

Article 1358 of the Civil Code requires that the form of a contract that transmits or extinguishes real rights over immovable property should be in a public document, yet the failure to observe the proper form does not render the transaction invalid. The necessity of a public document for said contracts is only for convenience; it is not essential for validity or enforceability [Castillo v. Security Bank Corporation (2014)].

Although Article 1358 of the Civil Code states that the sale of real property must appear in a public instrument, the formalities required by this article is not essential for the validity of the contract but is simply for its greater efficacy or convenience, or to bind third persons, and is merely a coercive means granted to the contracting parties to enable them to reciprocally compel the observance of the prescribed form. Consequently, the private conveyance of the house is valid between the parties [Chong v. Court of Appeals (2007)].

B.       As far as the lower courts are concerned, the three requirements of cause, object, and consideration concurred. This Court is left with no option but to respect the lower courts’ findings, for its jurisdiction in a petition for review on certiorari is limited to reviewing only errors of law since it is not a trier of facts. This is especially so in view of the identical conclusions affirmed at by them.

C.       The Diampocs conceded that there was such a deed of sale, but only that they were induced to sign it without being given the opportunity to read its contents. Accordingly, the document was “folded” when she affixed her signature thereon; on the other hand, her husband added that at the time he signed the same, it was “dark”. These circumstances, however, did not prevent them from discovering the true nature of the document; being high school graduates and thus literate, they were not completely precluded from reading the contents thereof, as they should have done if they were prudent enough, their excuses are therefore flimsy and specious.

The Diampocs admission that they failed to exercise prudence can only be fatal to their cause. They are not unlettered people possessed with a modicum of intelligence; they are educated property owners capable of securing themselves and their property from unwarranted intrusion when required. They knew the wherewithal of property ownership. Their failure to thus observe the care and circumspect expected of them precludes the courts from lending a helping hand, and so they must bear the consequences flowing from their own negligence.

The rule that one who signs a contract is presumed to know its contents has been applied even to contracts of illiterate persons on the ground that if such persons are unable to read, they are negligent if they fail to have the contract read to them. If a person cannot read the instrument, it is as much his duty to procure some reliable persons to read and explain it to him, before he signs it, as it would be to read it before he signed it if he were able to do so and his failure to obtain a reading and explanation of it is such gross negligence as will estop him from avoiding it on the ground that he was ignorant of its contents.

It is also a well-settled principle that the law will not relieve parties from the effects of an unwise, foolish or disastrous agreement they entered into with all the required formalities and with full awareness of what they were doing. Courts have no power to relieve them from obligations they voluntarily assumed, simply because their contracts turn out to be disastrous deals or unwise investments[Fernandez v. Spouses Tanm (2002)].

Related CASE BriefS:

  1. Riosa v. Tabaco la Suerte Corporation (2013)
  2. Menauza v. Fermin (2014)
  3. Castillo v. Security Bank Corporation (2014)
  4. Chong v. Court of Appeals (2007)
  5. Fernandez v. Spouses Tanm (2002)

———————————————-

THINGS DECIDED:

A) The absence of notarization of the deed of sale would not invalidate the transaction evidenced therein”; it merely “reduces the evidentiary value of a document to that of a private document, which requires proof of its due execution and authenticity to be admissible as evidence.

B) Article 1358 of the Civil Code requires that the form of a contract that transmits or extinguishes real rights over immovable property should be in a public document, yet the failure to observe the proper form does not render the transaction invalid.

C) The rule that one who signs a contract is presumed to know its contents has been applied even to contracts of illiterate persons on the ground that if such persons are unable to read, they are negligent if they fail to have the contract read to them.

D) The law will not relieve parties from the effects of an unwise, foolish or disastrous agreement they entered into with all the required formalities and with full awareness of what they were doing.


‘Stand by things decided’ ~ Stare Decisis


For more Case Briefs visit us at Stare Decisis or like us on Facebook @staredecisispage

======================