THIRD DIVISION
[G.R. No. 201750. September 30, 2020.]
PRECISION BROKERAGE AND SHIPPING CORPORATION, petitioner,vs. CLAUDINE L. DARZA, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Third Division, issued a Resolution dated September 30, 2020, which reads as follows:
"G.R. No. 201750 (PRECISION BROKERAGE AND SHIPPING CORPORATION,petitionerv.CLAUDINE L. DARZA, respondent). — Challenged before this Court is the Decision 1 dated February 9, 2011 and Resolution 2 dated May 15, 2012 of the Court of Appeals (CA) in CA-G.R. CV No. 94187 reversing and setting aside the Decision 3 dated April 8, 2008 of the Regional Trial Court (RTC) of Muntinlupa City, Branch 256 in Civil Case No. 95-055 declaring as null and void the real estate mortgage executed by Jovenal B. Toring (Toring) as president of Tito Jovy Holdings, Inc. (Tito Jovy), Precision Brokerage and Shipping Corporation (Precision) in favor of Claudine L. Darza (Darza). CAIHTE
The Facts
A complaint 4 for declaration of nullity of the real estate mortgage and cancellation of its annotation on Transfer Certificate of Title (TCT) No. 129682 with damages before the RTC of Muntinlupa City was filed by Precision against Darza. 5
Precision and Tito Jovy are sister companies which are domestic corporations organized and existing under and by virtue of laws of the Philippines. 6 While Toring is the President of Precision and Chairman of Tito Jovy. 7
Precision alleged that Tito Jovy is the registered owner of a parcel of land located at D. Jarosalem St., Cebu City covered by TCT No. 119498 to be utilized for the construction of a five-storey condominium building which was later named as Natividad Centrum I. 8 To pursue the project, it was necessary for them to look for a financial institution willing to finance the construction thereof. 9
Tito Jovy negotiated with Monte de Piedad & Savings Bank to secure a loan with it in the amount of P5,000,000.00. 10 As a condition for the release of the loan proceeds as well as to secure its religious and prompt payment, it mortgaged the property covered by TCT No. 119498. 11
When the loan obligation fell due, Tito Jovy failed to pay the same. Thus, Precision and its sister company Tito Jovy, represented by Toring, contracted a loan with Darza through Atty. Luis V. Diores, Jr. On two occasions, they were granted loans which enabled them to pay Monte de Piedad & Savings Bank. 12 Thus, the property was discharged from the mortgage. 13
According to Precision, they agreed to have the corporations' properties covered by TCT No. 119498 and TCT No. T-23729 be mortgaged with Darza. 14 Precision claimed that Darza asked Toring to sign blank deeds of absolute sale covering the same properties 15 but made representations and assurances that she will not make use of them as what was really agreed upon was a mortgage contract. 16 Relying on Darza's representations and assurances, Toring finally signed the blank deeds of absolute sale but he was not furnished copies of the said deeds despite demands for the same. 17
Later, due to financial reveres and liquidity problems, the corporations were not able to pay their loan obligations to respondent. Consequently, a demand letter was sent to them by the lawyers of Darza for the payment of the obligation. 18
Precision averred that Toring occasioned to pass by the Register of Deeds (RD) of Makati and discovered that Darza, thru her representative, Marguerite Lhuillier (Lhuillier), was causing the annotation of an affidavit of adverse claim on 10 titles covering properties of Precision and Tito Jovy. 19
Precision claimed that a meticulous and careful scrutiny of the annotation revealed that Lhuillier claimed ownership on the 10 properties allegedly through sale made by the Precision in favor of her principal and exhibited deeds of absolute sale which were the ones signed by Toring. 20
A complaint for damages with prayer for a temporary restraining order and issuance of a writ of preliminary injuction against Lhuillier was filed by Precision to prohibit and stop Lhuillier and the RD of Makati from annotating and/or registering the deed of sale or any document of conveyance involving their property covered by TCT No. 129682. 21 The case was docketed as Civil Case No. 94-1522. 22
Precision further claimed that during the pre-trial stage of Civil Case No. 94-1522, the parties exerted efforts to settle their case amicably and in the process, Lhuillier's counsels asked Precision and its sister corporation for a board resolution ratifying and confirming any mortgage document executed by Toring to which Precision agreed to with a "gentleman's agreement" that separate promissory notes and real estate mortgages shall be executed and thereafter annotated only after the loan release values of each of the mortgaged properties are finalized and agreed. 23
The parties failed to settle amicably. Precision claimed that the counsels of Lhuillier fraudulently caused the annotation of the alleged Real Estate Mortgage (REM) signed by Toring in contradiction to their "gentleman's agreement." 24
Precision claimed that the REM submitted by the respondent to the RD of Makati is fake and/or fictitious for the following reasons:
a. The typewritten words "representing Precision Brokerage and Shipping Corporation with address at S-18 Sunvar Plaza, Pasay Road, Makati" appearing on the face of the Real Estate Mortgage is a clear superimposition or insertion which become more apparent with the use of a different typewriter;
b. Residence Certificate No. 22453280 is not and does not belong to Mr. Toring because his Res. Certificate in 1992 bears No. 11149200 L dated January 7, 1992 x x x;
c. Mr. Toring does not have Tax Identification No. bearing 103-240-143 issued by the BIR; instead, his TIN is 100-184-235;
d. Res. Certificate No. 22453280 which was made to appear as belonging to Mr. Toring is different from the one appearing in the acknowledgment portion which carried No. 22453279; 25
Precision opined that since the REM, the basis of the annotation at the back of TCT No. 129682, is fake, fictitious and/or simulated, it follows that it is void or inexistent and the same shall be cancelled in accordance with Article 1409 of the New Civil Code. 26 DETACa
Darza, in her answer, 27 claimed that Toring applied for a loan in behalf of his corporations. 28 He was granted the same by Darza in different releases in the aggregate sum of P22,000,000.00. 29 The total indebtedness was obtained upon representation and warranties of Toring that he will accomplish all documents and requirements for the execution and registration of the mortgage documents. 30
One of those collaterals put up by Toring's corporations to secure the total amount of P22,000,000.00 is the disputed parcel of land subject of the case. 31
Contrary to Toring's representations and assurances, Precision and Tito Jovy defaulted in paying their principal obligation of P22,000,000.00. 32 Toring likewise failed and refused to deliver other properties which he promised to put up as collateral to fully secure the total obligation. 33
Meanwhile, counsels discovered that the mortgage documents of Toring and his corporations were incomplete and were not registered as there were requirements for registration which Precision and Tito Jovy did not comply as promised. 34 Thus, they were asked to comply with the deficiencies. Precision and Tito Jovy did not act accordingly and even made excuses every time Darza demanded for their compliance. 35
Darza was then prompted to file a petition for the registration of mortgage documents before the RTC of Cebu to compel petitioners to comply with certain requirements for registration. 36 Precision, Tito Jovy and Toring opposed the lawful registration of the mortgage. 37
Petitioner, Tito Jovy and Toring filed for injunction before the RTC of Makati, docketed as Civil Case No. 94-1522, claiming that respondent was registering a deed of sale instead of a mortgage. 38 However, Darza was able to show that what was being registered by Lhuillier was a mortgage and not a deed of sale. 39 In fact, Precision and Tito Jovy have ratified and confirmed the execution of the mortgage documents through a resolution passed for the purpose. 40
Precision and Tito Jovy complied with the requirements for registration in Civil Case No. 94-1522. Later, respondent exercised her rights as mortgagee and proceeded to register the mortgage. 41
RTC Ruling
The RTC relied upon petitioners' allegations of superimpositions and insertions appearing on the face of the contract and the inconsistent entries as to Toring's residence certificate number and tax identification number, and thus, held that the mortgage contract is void. The dispositive portion of the decision states:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of herein plaintiff and as against the defendant. As such, this Court orders the following:
a) Declaring as null and void the Real Estate Mortgage allegedly executed by the plaintiff in favor of the defendant on July 13, 1992 over TCT No. 129682 for being fictitious document pursuant to Article 1409 of the Civil Code of the Philippines;
b) Directing the Register of Deeds of Muntinlupa City the cancellation of the annotation of the said Real Estate Mortgage at the back of TCT No. 129682;
c) Ordering the defendant to plaintiff moral damages in the amount of P200,000.00 pesos;
d) Ordering the defendant to pay plaintiff the amount of P100,000.00 by way of attorney's fees; and
e) To pay the costs of suit.
SO ORDERED. 42
CA Ruling
Aggrieved, Darza appealed before the CA arguing that the lower court erred in declaring the real estate mortgage dated July 13, 1992 as void for being fictitious despite admission by the petitioner that the same is existent. 43 Moreover, Darza asseverated that the Precision failed to present convincing and more than preponderant evidence to rebut the presumption of regularity of the real estate mortgage. 44 Darza likewise submitted as an error of the trial court its failure to dismiss the case base on forum shopping and litis pendentia. 45
The CA ruled that Precision failed to prove their claim that the REM is spurious. 46 The REM, being a public document, enjoys the presumption of regularity and which presumption prevails in the absence of any conclusive proof on petitioners' part. 47 The dispositive portion of the Decision states:
WHEREFORE, the appeal is GRANTED. The assailed disposition is REVERSED and SET ASIDE. Accordingly, the Complaint in Civil Case No. 95-055 is DISMISSED. With costs.
SO ORDERED. 48
Precision filed a motion for reconsideration of the appellate court's decision which was later denied for lack of merit in a resolution dated May 15, 2012. 49 ATICcS
Issue
Whether the REM is void for being fictitious.
Ruling of this Court
The petition is devoid of merit.
At the outset, Precision never denied, in fact it unequivocally admitted, that it, together with its sister company, obtained a loan from the respondent to pay their loan obligation from Monte de Piedad & Savings Bank. 50 It likewise admitted that they defaulted in the payment of their loan with respondent when it fell due because of acute financial reverses and liquidity problems. 51 More importantly, petitioners did not deny that the REM was signed by Toring, the president of both corporations. 52 Precision, however, alleged that Toring was merely prodded to sign blank documents, to impress upon the courts that the REM is fictitious. 53
Toring, as president and representative of both corporations, signed the REM as a mortgagor. There is no evidence adduced by Precision that suggests fraud or irregularity in its execution. Toring is not a contracting party whom the law considers ignorant or disadvantaged but a president of not just one but two corporations engaged in real estate with sufficient education as to be well aware of the consequences of his personal decisions, consistent with the legal presumption that a person takes ordinary care of his concerns. 54
As correctly ruled by the CA, Toring, being the president of both corporations, must be adept in the world of business especially those relating to real property as he is directly engaging to such. 55 The CA pointed out that it is quite unbelievable that a man like him, who is holding a sensitive position in not just one but two corporations, would allow himself or his corporations to be prodded into signing blanks documents involving the corporations' assets. 56
Precision also admitted that a board resolution ratifying and confirming the execution of mortgage documents was given to the respondent. 57 However, it claimed that the act of the respondent in using the said board resolution to register the mortgage is contrary to their "gentleman's agreement" that no annotation of the said mortgages shall be made on the TCTs of the individual properties until after the loan release values are finalized and agreed. 58 To prove the said "gentleman's agreement," Precision adduced as evidence a letter from Tito Jovy to the lawyers of the respondent. 59
Upon review of the said letter, this Court has noted that the same was signed solely by Toring. It shows not an iota of proof that the same was sent to or received by Darza. It does not prove that the respondent ever assented to the alleged "gentleman's agreement." Simply put, the letter does not serve as a proof of the said agreement.
At this juncture, it bears to give emphasis on the basic rule that allegations in the complaint must be duly proven by competent evidence and the burden of proof is on the party making the allegation. 60
To further convince this Court that the REM is fictitious, Precision averred that while it may be true that the REM, being a public document, enjoys the presumption of regularity, the same may be rebutted due to the patent unauthorized insertion and discrepancies found on its face. 61
The petitioner relied upon the ruling in the case of Lazaro, et al. v. Agustin, et al., 62 which states that —
Settled is the rule that generally, a notarized document carries the evidentiary weight conferred upon it with respect to its due execution, and documents acknowledged before a notary public have in their favor the presumption of regularity. However, this presumption is not absolute and may be rebutted by clear and convincing evidence to the contrary. 63
This Court agrees with the asseverations of Precision that the presumption of regularity of notarized documents may be rebutted by clear and convincing evidence. However, Precision miserably failed to present the requisite amount of evidence prove that the REM was irregularly executed. In fact, Precision's allegation of irregularity in the execution of the REM is negated by its own admission that a Board Resolution ratifying and confirming the execution of the same mortgage document was issued by the corporations and given to Darza.
As observed, Precision, its sister company and their president did not just initiate one case concerning the registration of the REM and its annotation to the title. As admitted, a complaint for damages with prayer for a temporary restraining order and issuance of a writ of preliminary injunction against Lhuillier to prohibit and stop the respondent and the RD of Makati from annotating and/or registering the deed of sale or any document of conveyance involving their property covered by TCT No. 129682 was also filed. 64 When they failed to defeat the registration of the subject mortgage in Civil Case No. 94-1522, Precision filed the complaint from which this case originated.
Certainly, it is disturbing that Precision has the audacity to question the regularity of the execution of the REM they executed, ratified and confirmed after contracting and being graciously granted a loan, utilizing the loan proceeds for their business, and failing to pay the same.
The REM is valid. For this reason, there is no need for this Court to pass upon the other issues raised. cSEDTC
WHEREFORE, the Decision dated February 9, 2011 and Resolution dated May 15, 2012 of the Court of Appeals in CA-G.R. CV No. 94187 reversing and setting aside the Decision dated April 8, 2008 of the Regional Trial Court of Muntinlupa City, Branch 256 in Civil Case No. 95-055 are hereby AFFIRMED.
SO ORDERED."
By authority of the Court:
(SGD.) MISAEL DOMINGO C. BATTUNG IIIDivision Clerk of Court
Footnotes
1.Rollo, pp. 32-44; penned by Associate Justice Normandie B. Pizarro, with the concurrence of Associate Justices Amelita G. Tolentino and Ruben C. Ayson.
2.Id. at 46-47; penned by Associate Justice Normandie B. Pizarro, with the concurrence of Associate Justices Amelita G. Tolentino and Apolinario D. Bruselas, Jr.
3.Id. at 116-122; penned by Acting Presiding Judge Romulo S.G. Villanueva.
4.Id. at 48-54.
5.Id.
6.Id. at 58.
7.Id. at 61.
8.Id. at 58-59.
9.Id. at 59.
10.Id.
11.Id.
12.Id. at 60.
13.Id.
14.Id.
15.Id.
16.Id.
17.Id. at 60-61.
18.Id. at 61.
19.Id.
20.Id. at 61-62.
21.Id. at 49.
22.Id.
23.Id.
24.Id. at 49-50.
25.Id. at 50.
26.Id.
27.Id. at 84-96.
28.Id. at 87.
29.Id.
30.Id.
31.Id.
32.Id.
33.Id. at 87-88.
34.Id.
35.Id.
36.Id. at 89.
37.Id.
38.Id.
39.Id.
40.Id. at 89-90.
41.Id. at 90.
42.Id. at 122.
43.Id. at 36.
44.Id. at 37.
45.Id.
46.Id. at 39.
47.Id. at 40.
48.Id. at 43.
49.Id. at 46-47.
50.Id. at 59-60.
51.Id. at 61.
52.Id. at 39.
53.Id.
54.Sps. Ramos v. Obispo, et al., 705 Phil. 221, 233 (2013).
55.Rollo, p. 40.
56.Id.
57.Id. at 16.
58.Id.
59.Id. at 76.
60.Gamboa, Rodriguez, Rivera & Co., Inc. v. CA, et al., 497 Phil. 399, 405 (2005).
61.Rollo, p. 23.
62. 632 Phil. 310 (2001).
63.Id. at 321.
64.Rollo, p. 49.