Deed of Sale Presumed Valid Absent Clear Proof of Fraud

The Supreme Court has ruled that a notarized deed of absolute sale enjoys the presumption of authenticity and due execution, and those who challenge its validity must present clear and convincing evidence of fraud. In Destreza v. Riñoza-Plazo (G.R. No. 176863, October 30, 2009), the Court reversed the Court of Appeals and upheld the validity of a deed of sale, emphasizing that mere speculation and unproven irregularities cannot overcome the legal presumption attached to notarized documents.

The Facts of the Case

Pedro Riñoza died in November 1989, leaving several heirs, including respondents Ma. Gracia Riñoza-Plazo and Ma. Fe Alaras. During the settlement of the estate, Plazo discovered that a parcel of sugarland in Nasugbu, Batangas, previously covered by Transfer Certificate of Title (TCT) No. 40353 in Riñoza's name, had been transferred to petitioner Gregorio Destreza and his wife under TCT No. 55396.

The new title was entered in the registry on July 18, 1989, based on a deed of absolute sale dated June 15, 1989, notarized by Atty. Crispulo Ducusin. The respondents filed a complaint seeking to nullify the deed and the new title, alleging serious irregularities in their issuance.

The Issue

The core issue was whether sufficient evidence warranted the nullification of the deed of sale that Riñoza executed in favor of the Destrezas.

The Ruling of the Supreme Court

The Supreme Court ruled in favor of the Destrezas, declaring the deed of sale valid and binding.

Notarized Deeds Enjoy Presumption of Authenticity. The Court held that a notarized deed of sale is admissible as evidence without further proof. The certificate of acknowledgment is prima facie evidence of the execution of the instrument. A notary public's failure to submit his notarial report to the court does not destroy this presumption—what matters is the swearing of the person before the notary and the notary's act of signing and affixing his seal.

Burden of Proof Lies with the Challenger. The Court clarified that the burden of proof rests on the party contesting the notarized deed. Since respondents claimed that grave doubts plagued the title, they had the duty to prove their claim. An allegation of fraud is a grave accusation that cannot be declared on mere speculations. To overcome the presumption of regularity, there must be clear and convincing evidence showing otherwise.

Alleged Irregularities Did Not Invalidate the Sale. The Court examined each of the respondents' arguments and found them insufficient:

• The premature release of a copy of the title to the Destrezas did not affect the validity of the contract of sale. Under Section 57 of Presidential Decree No. 1529 (the Property Registration Decree), registration serves as the operative act to convey or affect land insofar as third persons are concerned—it does not add to the efficacy of the contract between buyer and seller.

• The testimony of Alaras that her father gave her a title to mortgage months after the sale did not prove fraud. She admitted she did not see the title number and did not identify any specific title in court.

• The discrepancy between the deed's stated price of P60,000.00 and Destreza's testimony that he paid P100,000.00 was not sufficient ground to nullify the deed. The respondents failed to confront Destreza about this difference when he testified.

The Court also noted that the Destrezas immediately and openly occupied and cultivated the land for seven years before and after Riñoza's death, which negated any scheme to steal the land. Furthermore, the Register of Deeds testified that he gave Riñoza a copy of the new title upon the latter's request, showing that Riñoza knew of and consented to the sale.

Practical Takeaways

• A notarized deed of sale is a public document that enjoys the presumption of authenticity and due execution. It may be presented in evidence without further proof.
• The party challenging a notarized deed bears the burden of presenting clear and convincing evidence of fraud or irregularity—mere speculation or unproven circumstances will not suffice.
• The failure of a notary public to submit his notarial report does not invalidate a notarized document. Parties who appear before a notary should not suffer the consequences of the notary's negligence.
• Registration of a deed is not the source of the contract's validity between the parties. While registration is the operative act affecting third persons, an unregistered deed continues to operate as a contract between buyer and seller.
• When contesting a deed, challengers should confront the adverse party about alleged inconsistencies during cross-examination. Failure to do so weakens their case.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.