687 Phil. 437
Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of Court is the March 30, 2009 Decision
of the Court of Appeals Mindanao Station (CA) and its December 2, 2009 Resolution
in CA-G.R. CV No. 00722-MIN which declared that the transaction between the parties was a mortgage, not a sale, and ordered petitioners to surrender the possession of the disputed lot upon respondents' full payment of their indebtedness.THE ANTECEDENT FACTS
The spouses Serafin, Sr. and Saludada
Adolfo were the original registered owners of a 126,622 square meter lot covered by Original Certificate of Title (OCT) No. P-489 issued on December 15, 1954 (derived from Homestead Patent No. V-34974), located in Valencia, Malaybalay, Bukidnon. This property was mortgaged to the then Rehabilitation Finance Corporation (now Development Bank of the Philippines or DBP) on August 18, 1955,
and upon default in the payment of the loan obligation, was foreclosed and ownership was consolidated in DBP's name under Transfer Certificate of Title (TCT) No. T-1152.
Serafin Adolfo, Sr., however, repurchased the same and was issued TCT No. 6313
on December 1, 1971, a year after his wife died in 1970.
Sometime in 1975, Serafin Adolfo, Sr. (Adolfo) allegedly mortgaged the subject property for the sum of P12,500.00 to Aniceto Bangis (Bangis) who immediately took possession of the land.
The said transaction was, however, not reduced into writing.
When Adolfo died, his heirs, namely, Luz Adolfo Bannister, Serafin Adolfo, Jr. and Eleuterio Adolfo (Heirs of Adolfo), executed a Deed of Extrajudicial Partition dated December 24, 1997 covering the subject property and TCT No. T-65152
was issued to them. On May 26, 1998, the said property was subdivided and separate titles were issued in names of the Heirs of Adolfo, as follows: TCT Nos. T-66562 and T-66563 for Luz Adolfo Banester
; TCT Nos. T-66560 and T-66561 in the name of Serafin Adolfo, Jr.; and TCT Nos. T-66564 and T-66565 in favor of Eleuterio Adolfo.
In June 1998, the Heirs of Adolfo expressed their intention to redeem the mortgaged property from Bangis but the latter refused, claiming that the transaction between him and Adolfo was one of sale. During the conciliation meetings in the barangay, Bangis' son, Rudy Bangis, showed them a copy of a deed of sale and a certificate of title to the disputed lot.
The parties having failed to amicably settle their differences, a certificate to file action
was issued by the barangay.THE PROCEEDINGS BEFORE THE RTC
On July 26, 2000, the Heirs of Adolfo filed a complaint
before the Regional Trial Court (RTC) for annulment of deed of sale and declaration of the purported contract of sale as antichresis, accounting and redemption of property and damages against Bangis, docketed as Civil Case No. 2993-00. The complaint was amended on September 11, 2001 to include a prayer for the cancellation of TCT No. T-10567 and the tax declarations in the name of Bangis in view of the manifestation
filed by Ex-Officio Register of Deeds, Atty. Phoebe Loyola Toribio of the Registry of Deeds, Malaybalay City which states that the said title was of "dubious" origin since there was no deed of conveyance upon which the said transfer certificate of title was based and that its derivative title, TCT No. T-10566, does not exist in the files of the Registry of Deeds.
On November 12, 2001, the complaint was again amended to reflect the other certificates of titles issued in the names of the Heirs of Adolfo and the amount of P12,500.00 representing the mortgage debt,
followed by another amendment on October 13, 2003 to include the allegation that they have partitioned the subject lot on December 24, 1997 and that no copy of the supposed deed of sale in favor of Bangis can be found in the records of the Provincial Assessor's Office and the Registrar of Deeds. They further prayed, in the alternative, to be allowed to redeem the subject lot under the Homestead Law and that Bangis be ordered to indemnify them: (a) P50,000.00 each as moral damages; (b) 20% of the value of the property as attorney's fees; and (c) P50,000.00 as litigation expenses as well as the costs of suit.
In his Answer with Counterclaim,
Bangis claimed to have bought the subject property from Adolfo for which TCT No. T-10567
was issued. He also alleged to have been in open and adverse possession of the property since 1972 and that the cause of action of the Heirs of Adolfo has prescribed. On November 11, 2001, Bangis died and was substituted in this suit by his heirs, namely, Rodolfo B. Bangis, Ronie B. Bangis, Rogelio B. Bangis, Raquel B. Quillo, Romulo B. Bangis, Rosalina B. Paran, Rosario B. Reddy, Reynaldo B. Bangis and Remedios B. Lastre (Heirs of Bangis).
During the trial, one of the Heirs of Bangis, Rodolfo Bangis, presented a photocopy of an Extra-Judicial Settlement with Absolute Deed of Sale dated December 30, 1971
for the purpose of proving the sale of the subject lot by Adolfo and his heirs in favor of his predecessors-in-interest, Aniceto Bangis and Segundino Cortel, for the sum of P13,000.00. He also presented a Promissory Note
of even date purportedly executed by Bangis and Segundino Cortel undertaking to pay the balance of the purchase price in the amount of P1,050.00.
Both documents were notarized by Atty. Valentin Murillo who testified to the fact of their execution.
Rodolfo Bangis likewise testified that they have been paying the taxes due on the property and had even used the same as collateral for a loan with a bank.
On rebuttal, one of the Heirs of Adolfo, Luz Adolfo Bannister, denied the due execution and genuineness of the foregoing Extra-Judicial Settlement with Absolute Deed of Sale alleging forgery.
On December 29, 2005, the RTC rendered a Decision
in favor of the Heirs of Adolfo, the dispositive portion of which reads:
WHEREFORE, the preponderance of evidence being strongly in favor of the plaintiffs and against the defendants, decision is hereby rendered:
1. Declaring the contract between the plaintiffs and defendants as a mere mortgage or antichresis and since the defendants have been in the possession of the property in 1975 up to the present time enjoying all its fruits or income, the mortgaged loan of P12,000.00 is deemed fully paid;
2. Ordering the defendants to deliver the possession of the property in question and all the improvements thereon to the plaintiffs peacefully;
3. Declaring TCT No. 10567 in the name of Aniceto Bangis as NULL AND VOID AB INITIO and directing the Office of the Register of Deeds to cause its cancellation from its record to avoid confusion regarding the ownership thereof; and
4. Declaring all the transfer certificates of title issued in favor of the plaintiffs namely, Luz Adolfo-Bannister, Serafin Adolfo, Jr. and Eleuterio Adolfo, as above-mentioned as the ones valid and issued in accordance with PD 1529.
Aggrieved, the Heirs of Bangis appealed the foregoing disquisition to the Court of Appeals (CA).THE CA RULING
In its assailed Decision, the CA affirmed the RTC finding that the contract between the parties was a mortgage, not a sale. It noted that while Bangis was given possession of the subject property, the certificate of title remained in the custody of Adolfo and was never cancelled. The CA also ordered the Heirs of Adolfo to pay the Heirs of Bangis the mortgage debt of P12,500.00
with twelve (12%) percent interest reckoned from 1975 until 1998 and to deliver to them the possession of the property upon full payment.
It, however, deleted the RTC order directing the Register of Deeds to cancel TCT No. T-10567 in the name of Bangis for being a collateral attack proscribed under PD 1529.
Dissatisfied, the Heirs of Bangis filed a Motion for Reconsideration
arguing that the CA erred in disregarding their testimonial and documentary evidence, particularly, the Extra-Judicial Settlement with Absolute Deed of Sale (Exh. 2) which purportedly established the sale in favor of their predecessor-in-interest, Aniceto Bangis. The said motion was, however, denied in the Resolution
dated December 2, 2009.THE ISSUE BEFORE THE COURT
Hence, the instant petition for review on certiorari based on the lone assignment of error
that the transaction between the parties was one of sale and not a mortgage or antichresis. In support, petitioner Heirs of Bangis maintain that the CA erred in not giving probative weight to the Extra-Judicial Settlement with Absolute Deed of Sale
which supposedly bolsters their claim that their father, Aniceto Bangis, bought the subject parcel of land from Adolfo. Hence, the corresponding title, TCT No. T-10567, issued as a consequence should be respected.
On their part, respondent Heirs of Adolfo averred that no reversible error was committed by the CA in upholding that no sale transpired between the parties' predecessors-in-interest. Moreover, petitioners' TCT No. T-10567 was not offered in evidence and worse, certified as of dubious origin per the Manifestation of the Registrar of Deeds.THE COURT'S RULING
The petition must fail.
At the outset, it should be emphasized that a petition for review on certiorari
under Rule 45 of the Rules of Court involves only questions of law and not of facts. A question of law exists when there is doubt as to what the law is on a given set of facts while a question of fact arises when there is doubt as to the truth or falsity of the alleged facts.
The Heirs of Bangis, in insisting that both the RTC and the CA erroneously disregarded the evidence of sale they presented, are effectively asking the Court to re-evaluate factual issues which is proscribed under Rule 45. "Such questions as to whether certain items of evidence should be accorded probative value or weight, or rejected as feeble or spurious, or whether or not the proofs on one side or the other are clear and convincing and adequate to establish a proposition in issue, are without doubt questions of fact."
Nonetheless, the Court perused the records and found substantial evidence supporting the factual findings of the RTC, as affirmed by the CA, that the nature of the transaction between the parties' predecessors-in-interest was a mortgage and not a sale. Thus, the maxim that factual findings of the trial court when affirmed by the CA are final and conclusive on the Court
obtains in this case.THERE WAS NEITHER AN
ANTICHRESIS NOR SALE
For the contract of antichresis to be valid, Article 2134 of the Civil Code requires that "the amount of the principal and of the interest shall be specified in writing; otherwise the contract of antichresis shall be void." In this case, the Heirs of Adolfo were indisputably unable to produce any document in support of their claim that the contract between Adolfo and Bangis was an antichresis, hence, the CA properly held that no such relationship existed between the parties. 
On the other hand, the Heirs of Bangis presented an Extra-Judicial Settlement with Absolute Deed of Sale dated December 30, 1971
to justify their claimed ownership and possession of the subject land. However, notwithstanding that the subject of inquiry is the very contents of the said document, only its photocopy
was presented at the trial without providing sufficient justification for the production of secondary evidence, in violation of the best evidence rule embodied under Section 3 in relation to Section 5 of Rule 130 of the Rules of Court, to wit:
SEC. 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:
(1) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror;
(2) When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice;
(3) 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
(4) When the original is a public record in the custody of a public officer or is recorded in a public office.
SEC. 5. When original document is unavailable. - When the original document has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its content in some authentic document, or by the testimony of witnesses in the order stated.
The bare testimony of one of the Heirs of Bangis, Rodolfo Bangis, that the subject document was only handed
to him by his father, Aniceto, with the information that the original thereof "could not be found"
was insufficient to justify its admissibility. Moreover, the identification made by Notary Public Atty. Valentin Murillo
that he notarized such document cannot be given credence as his conclusion was not verified against his own notarial records.
Besides, the Heirs of Bangis could have secured a certified copy of the deed of sale from the Assessor's Office
that purportedly had its custody in compliance with Section 7, Rule 130
of the Rules of Court.
In sum, the Heirs of Bangis failed to establish the existence and due execution of the subject deed on which their claim of ownership was founded. Consequently, the RTC and CA were correct in affording no probative value to the said document.TCT NO. T-10567 IN THE NAME OF
ANICETO BANGIS CANNOT PREVAIL
OVER THE TITLES OF THE HEIRS OF
Records reveal that TCT No. T-10567 purportedly secured as a consequence of the deed of sale executed by Adolfo and his heirs in favor of Bangis was not offered in evidence. A perusal of its copy, however, shows that it was a transfer from TCT No. T-10566,
which title the Heirs of Bangis unfortunately failed to account for, and bore no relation at all to either OCT No. P-489 (the original title of the Spouses Adolfo) or TCT No. T-6313 (issued to Adolfo when he repurchased the same property from DBP). The Manifestation
of the Register of Deeds of Malaybalay City regarding the doubtful origin of TCT No. T-10567 and the regularity of the titles of the Heirs of Adolfo are insightful, thus:
That the verification from the office of the original copy of Transfer Certificate of Title No. T-10567 in the name of Anecito Bangis is existing in the office. Machine copy of the said title is hereto attached as annex "A" but nothing in the title whether annotated or attached, any Deed of Conveyance or other Documents by which said title was issued or transferred in the name of Anecito Bangis.
That for the information and guidance of the court attached herewith is a machine copies [sic] Original Certificate of Title No. P-489 in the name of Serafin Adolfo, marked as annex "B" which supposedly the mother title of Transfer Certificate of Title No. T-10567 as to how this title was transferred in the name of Anecito Bangis. Nothing will show which will validly supports [sic] the said transfer, in other words the said title is dubious.
This Original Certificate of Title No. P-489 in the name of Serafin Adolfo was mortgage to the Development Bank of the Philippines and then it was consolidated and Transfer Certificate of Title No. T-1152 was issued in the name of Development Bank of the Philippines. From the Development Bank of the Philippines a Deed of Sale was executed by the Development Bank of the Philippines in favor of Serafin Adolfo and Transfer Certificate of Title No. T-6313 marked annex "B-1" was issued in the name of Serafin Adolfo.
An Extrajudicial Settlement was now [sic] by the Heirs of Serafin Adolfo and Transfer Certificate of Title Nos. T-65152 annex "B-2", T-66560 annex "B-3", T-66561 annex "B-4", T-66562 annex "B-5", T-66563 annex "B-6", T-66564 annex "B-7", and T-66565 annex "B-8" were issued to the Heirs.
The titles issued to the Heirs of Serafin Adolfo were legitimately issued by this office after all its [sic] requirements and supporting documents were submitted and proper annotations were reflected at the back of the title of Serafin Adolfo.
Transfer Certificate of Title No. T-10567 as shown on the title was derived from Transfer Certificate of Title No. T-10566 but [sic] title is not existing in this office.
As held in the case of Top Management Programs Corporation v. Luis Fajardo and the Register of Deeds of Las Piñas City
"if two certificates of title purport to include the same land, whether wholly or partly, the better approach is to trace the original certificates
from which the certificates of titles were derived."
Having, thus, traced the roots of the parties' respective titles supported by the records of the Register of Deeds of Malaybalay City, the courts a quo
were correct in upholding the title of the Heirs of Adolfo as against TCT No. T-10567 of Bangis, notwithstanding its earlier issuance on August 18, 1976
or long before the Heirs of Adolfo secured their own titles on May 26, 1998. To paraphrase the Court's ruling in Mathay v. Court of Appeals
where two (2) transfer certificates of title have been issued on different dates, the one who holds the earlier title may prevail only in the absence of any anomaly or irregularity in the process of its registration, which circumstance does not obtain in this case.CANCELLATION OF
TCT NO. T-10567
The Court cannot sustain the CA's ruling
that TCT No. T-10567 cannot be invalidated because it constitutes as a collateral attack which is contrary to the principle of indefeasibility of titles.
It must be noted that Bangis interposed a counterclaim in his Answer seeking to be declared as the true and lawful owner of the disputed property and that his TCT No. T-10567 be declared as superior over the titles of the Heirs of Adolfo.
Since a counterclaim is essentially a complaint
then, a determination of the validity of TCT No. T-10567 vis-a-vis the titles of the Heirs of Adolfo can be considered as a direct, not collateral, attack on the subject titles.
In Pasiño v. Monterroyo
, the Court has ruled, thus:
It is already settled that a counterclaim is considered an original complaint and as such, the attack on the title in a case originally for recovery of possession cannot be considered as a collateral attack on the title. Development Bank of the Philippines v. Court of Appeals is similar to the case before us insofar as petitioner in that case filed an action for recovery of possession against respondent who, in turn, filed a counterclaim claiming ownership of the land. In that case, the Court ruled:
Nor is there any obstacle to the determination of the validity of TCT No. 10101. It is true that the indefeasibility of torrens title cannot be collaterally attacked. In the instant case, the original complaint is for recovery of possession filed by petitioner against private respondent, not an original action filed by the latter to question the validity of TCT No. 10101 on which petitioner bases its right. To rule on the issue of validity in a case for recovery of possession is tantamount to a collateral attack. However, it should not [b]e overlooked that private respondent filed a counterclaim against petitioner, claiming ownership over the land and seeking damages. Hence, we could rule on the question of the validity of TCT No. 10101 for the counterclaim can be considered a direct attack on the same. ‘A counterclaim is considered a complaint, only this time, it is the original defendant who becomes the plaintiff... It stands on the same footing and is to be tested by the same rules as if it were an independent action.’ x x x (Citations omitted) 
Besides, the prohibition against collateral attack does not apply to spurious or non-existent titles, which are not accorded indefeasibility,
as in this case.THE PRESENT ACTION
HAS NOT PRESCRIBED
The claim of the Heirs of Bangis that since they have been in possession of the subject land since 1972 or for 28 years reckoned from the filing of the complaint in 2000 then, the present action has prescribed is untenable. It bears to note that while Bangis indeed took possession of the land upon its alleged mortgage, the certificate of title (TCT No. 6313) remained with Adolfo and upon his demise, transferred to his heirs, thereby negating any contemplated transfer of ownership. Settled is the rule that no title in derogation of that of the registered owner can be acquired by prescription or adverse possession.
Moreover, even if acquisitive prescription can be appreciated in this case, the Heirs of Bangis' possession being in bad faith is two years shy of the requisite 30-year uninterrupted adverse possession required under Article 1137 of the Civil Code.
Consequently, the Heirs of Bangis cannot validly claim the rights of a builder in good faith as provided for under Article 449 in relation to Article 448 of the Civil Code. Thus, the order for them to surrender the possession of the disputed land together with all its improvements was properly made.LIABILITY FOR THE PAYMENT
Finally, it is undisputed that the Heirs of Bangis made no judicial or extrajudicial demand on the Heirs of Adolfo to pay the mortgage debt. Instead, it was the latter who signified their intent to pay their father's loan obligation, admittedly in the amount of P12,500.00,
which was refused. The mortgage contract therefore continued to subsist despite the lapse of a considerable number of years from the time it was constituted in 1975 because the mortgage debt has not been satisfied.
Following the Court's ruling in the iconic case of Eastern Shipping Lines, Inc. v. Court of Appeals
the foregoing liability, which is based on a loan or forbearance of money, shall be subject to legal interest of 12% per annum
from the date it was judicially determined by the CA on March 30, 2009 until the finality of this Decision, and not from 1975 (the date of the constitution of the mortgage); nor from 1998 (when an attempt to pay was made) or in 2000 at the time the complaint was filed, because it was the Heirs of Adolfo and not Bangis who filed the instant suit
to collect the indebtedness. Thereafter, the judgment award inclusive of interest shall bear interest at 12% per annum
until its full satisfaction.WHEREFORE,
premises considered, the instant petition for review on certiorari is DENIED
and the assailed Decision dated March 30, 2009 of the Court of Appeals Mindanao Station (CA) and its Resolution dated December 2, 2009 in CA-G.R. CV No. 00722-MIN are AFFIRMED with MODIFICATION
: (1) cancelling TCT No. T-10567; and (2) ordering respondent Heirs of Adolfo to pay petitioner Heirs of Bangis the sum of P12,500.00 with legal interest of 12% per annum reckoned from March 30, 2009 until the finality of this Decision and thereafter, 12% annual interest until its full satisfaction.
The rest of the Decision stands.SO ORDERED.Peralta, J., *(Acting Chairperson), Abad, Villarama, Jr.
and Mendoza, JJ.
Per Special Order No. 1228 dated June 6, 2012.**
Designated acting member in lieu of Justice Presbitero J. Velasco, Jr., per Special Order No. 1229 dated June 6, 2012.
Penned by Associate Justice Rodrigo F. Lim, Jr., with Associate Justices Romulo V. Borja and Michael P. Elbinias concurring, and Associate Justices Elihu A. Ybañez and Ruben C. Ayson, dissenting; rollo
, pp. 24-39.
Id. at 40-41.
Sometimes referred to as "Salud" in the records.
Folder of exhibits, Exhibit "A", pp. 269-270.
Id., Exhibit "B" at 271.
Id., Exhibit "C" at 272.
TSN, March 3, 2004, p. 13.
Id. at 14.
Exhibit "C-1", (dorsal portion) at 272.
Should be “Bannister.”
Supra note 4, Exhibits "D" to "F-1", at 273-278.
TSN, March 5, 2004, pp. 19-21.
Supra note 4, Exhibit "G" at 279.
Records, pp. 1-4.
Id. at 52-53.
Id. at 54-60.
Id. at 70, 72-76.
Id. at 114, 116-120.
Id. at 31-33.
Id. at 49-51.
Id. at 97, 108-109.
Folder of exhibits, Exhibit "I" for petitioners; Exhibit "2" for respondents, at 350-351.
Id., Exhibit "1", at 349.
TSN, May 20, 2005, p. 10; TSN, November 26, 2004, pp. 7, 11 and 12.
TSN, November 26, 2004, p. 5; TSN, September 2, 2005, pp. 3-6.
TSN, May 20, 2005, pp. 18-19.
TSN, August 5, 2005, pp. 4-8.
Supra note 14 at 204-218. Rollo
, pp. 31-34.
Id. at 38.
Id., at 36-38.
pp. 94-107. See
Supra note 2.
Id. at 7. See
Supra note 23.
Supra note 29 at 67-75. Abalos v. Sps. Darapa,
G.R. No. 164693, March 23, 2011, 646 SCRA 200, 207 and 208. Heirs of Mario Pacres v. Heirs of Cecilia Ygoña
, G.R. No. 174719, May 5, 2010, 620 SCRA 213, 225, citing Paterno v. Paterno,
G.R. No. 63680, March 23, 1990, 183 SCRA 630, 636. Abalos v. Spouses Darapa,
supra note 37.
Supra note 29 at 32-33.
Supra note 4, Exhibit "I" for petitioners; Exhibit "2" for respondents, at 350-351. See
Supra note 23.
TSN, May 20, 2005, p. 5.
Id. at 6-7.
TSN, November 26, 2004, pp. 14-15. Department of Education, Culture and Sports v. Del Rosario, et al
., G.R. No. 146586, January 26, 2005, 449 SCRA 299, 317.
TSN, May 20, 2005, pp. 20-22.
Sec.7. Evidence admissible when original document is a public record. - When the original of a document is in the custody of a public officer or is recorded in a public office, its contents may be proved by a certified copy issued by the public officer in custody thereof. Duero v. Hon. Court of Appeals
, G.R. No. 131282, January 4, 2002, 373 SCRA 11, 17.
Supra note 14 at 49.
Supra note at 15.
G.R. No. 150462, June 15, 2011, citing the case of Degollacion v. Register of Deeds of Cavite,
G.R. No. 161433, August 29, 2006, 500 SCRA 108, 115.
Supra note 29 at 34-36.
Supra note 14 at 49.
G.R. No. 115788, September 17, 1998, 295 SCRA 556, 578.
Supra note 29 at 36-38.
Records, pp. 32-33. Oliveros v. San Miguel Corporation,
G.R. No. 173531, February 1, 2012.
G.R. No. 159494, July 31, 2008, 560 SCRA 739, 750 and 751.
Supra note 58. Feliciano v. Spouses Zaldivar,
G.R. No. 162593, September 26, 2006, 503 SCRA 182, 197.
See Supra note 7.
G.R. No. 97412, July 12, 1994, 234 SCRA 78, 95 and 96. Crystal v. Bank of the Philippine Islands
, G.R. No. 180274, September 4, 2009, 598 SCRA 464, 470 and 471.