G.R. No.

170604               September 2, 2013

HEIRS OF MARGARITA PRODON, PETITIONERS,

DECISION

BERSAMIN, J.:

The Best Evidence Rule applies only when the terms of a written document are the subject of the
inquiry. In an action for quieting of title based on the inexistence of a deed of sale with right to
repurchase that purportedly cast a cloud on the title of a property, therefore, the Best Evidence Rule
does not apply, and the defendant is not precluded from presenting evidence other than the original
document.

The Case

This appeal seeks the review and reversal of the decision promulgated on August 18,
2005,1 whereby the Court of Appeals (CA) reversed the judgment rendered on November 5, 1997 by
the Regional Trial Court (RTC), Branch 35, in Manila in Civil Case No. 96-78481 entitled Heirs of
Maximo S Alvarez and Valentina Clave, represented by Rev. Maximo S. Alvarez and Valentina
Clave, represented by Rev. Maximo Alvarez, Jr. v. Margarita Prodon and the Register of Deeds of
the City of Manila dismissing the respondents’ action for quieting of title.2

Antecedents

In their complaint for quieting of title and damages against Margarita Prodon,3 the respondents
averred as the plaintiffs that their parents, the late spouses Maximo S. Alvarez, Sr. and Valentina
Clave, were the registered owners of that parcel of land covered by Transfer Certificate of Title
(TCT) No. 84797 of the Register of Deeds of Manila; that their parents had been in possession of the
property during their lifetime; that upon their parents’ deaths, they had continued the possession of
the property as heirs, paying the real property taxes due thereon; that they could not locate the
owner’s duplicate copy of TCT No. 84797, but the original copy of TCT No. 84797 on file with the
Register of Deeds of Manila was intact; that the original copy contained an entry stating that the
property had been sold to defendant Prodon subject to the right of repurchase; and that the entry
had been maliciously done by Prodon because the deed of sale with right to repurchase covering the
property did not exist. Consequently, they prayed that the entry be cancelled, and that Prodon be
adjudged liable for damages.

The entry sought to be cancelled reads:

ENTRY NO. 3816/T-84797 – SALE W/ RIGHT TO REPURCHASE IN FAVOR OF: MARGARITA

DATE OF INSTRUMENT – SEPT. 9, 1975

In her answer,5 Prodon claimed that the late Maximo Alvarez, Sr. had executed on September 9,
1975 the deed of sale with right to repurchase; that the deed had been registered with the Register
of Deeds and duly annotated on the title; that the late Maximo Alvarez, Sr. had been granted six
months from September 9, 1975 within which to repurchase the property; and that she had then
become the absolute owner of the property due to its non-repurchase within the given 6-month
period.

During trial, the custodian of the records of the property attested that the copy of the deed of sale
with right to repurchase could not be found in the files of the Register of Deeds of Manila.

On November 5, 1997, the RTC rendered judgment,6 finding untenable the plaintiffs’ contention that
the deed of sale with right to repurchase did not exist. It opined that although the deed itself could
not be presented as evidence in court, its contents could nevertheless be proved by secondary
evidence in accordance with Section 5, Rule 130 of the Rules of Court, upon proof of its execution or
existence and of the cause of its unavailability being without bad faith. It found that the defendant
had established the execution and existence of the deed, to wit:

In the case under consideration, the execution and existence of the disputed deed of sale with right
to repurchase accomplished by the late Maximo Alvarez in favor of defendant Margarita Prodon has
been adequately established by reliable and trustworthy evidences (sic). Defendant Prodon swore
that on September 9, 1975 she purchased the land covered by TCT No. 84747 (Exhibit 1) from its
registered owners Maximo S. Alvarez, Sr. and Valentina Clave (TSN, Aug. 1, 1997, pp.5-7); that the
deed of sale with right to repurchase was drawn and prepared by Notary Public Eliseo Razon (Ibid.,
p. 9); and that on September 10, 1975, she registered the document in the Register of Deeds of
Manila (Ibid., pp.18-19).

The testimony of Margarita Prodon has been confirmed by the Notarial Register of Notary Public
Eliseo Razon dated September 10, 1975 (Exhibit 2), and by the Primary Entry Book of the Register
of Deeds of Manila (Exhibit 4).

Page 66 of Exhibit 2 discloses, among others, the following entries, to wit: "No. 321; Nature of
Instrument: Deed of Sale with Right to Repurchase; Name of Persons: Maximo S. Alvarez and
Valentina Alvarez (ack.); Date and Month: 9 Sept." (Exhibit 2-a).

Exhibit 4, on the other hand, also reveals the following data, to wit: ‘Number of Entry: 3816; Month,
Day and Year: Sept. 10, 1975; Hour and Minute: 3:42 p.m.; Nature of Contract: Sale with Right to
Repurchase; Executed by: Maximo S. Alvarez; In favor: Margarita Prodon; Date of Document: 9-9-
75; Contract value: 120,000.’ (Exhibit 4-a). Under these premises the Court entertains no doubt
about the execution and existence of the controverted deed of sale with right to repurchase.7

The RTC rejected the plaintiffs’ submission that the late Maximo Alvarez, Sr. could not have
executed the deed of sale with right to repurchase because of illness and poor eyesight from
cataract. It held that there was no proof that the illness had rendered him bedridden and immobile;
and that his poor eyesight could be corrected by wearing lenses.

The RTC concluded that the original copy of the deed of sale with right to repurchase had been lost,
and that earnest efforts had been exerted to produce it before the court. It believed Jose Camilon’s
testimony that he had handed the original to one Atty. Anacleto Lacanilao, but that he could not
anymore retrieve such original from Atty. Lacanilao because the latter had meanwhile suffered from
a heart ailment and had been recuperating.

Ruling of the CA

On appeal, the respondents assigned the following errors, namely:

A.

THE TRIAL COURT GRAVELY ERRED IN FINDING THAT THE DUE EXECUTION AND
EXISTENCE OF THE QUESTIONED DEED OF SALE WITH RIGHT TO REPURCHASE HAS BEEN
DULY PROVED BY THE DEFENDANT.

B.

THE TRIAL COURT GRAVELY ERRED IN ADMITTING THE PIECES OF EVIDENCE PRESENTED
BY THE DEFENDANTS AS PROOFS OF THE DUE EXECUTION AND EXISTENCE OF THE
QUESTIONED DEED OF SALE WITH RIGHT TO REPURCHASE.

C.

THE TRIAL COURT SERIOUSLY ERRED IN FINDING THAT THE QUESTIONED DEED OF SALE
WITH RIGHT TO REPURCHASE HAS BEEN LOST OR OTHERWISE COULD NOT BE
PRODUCED IN COURT WITHOUT THE FAULT OF THE DEFENDANT.

D.

THE TRIAL COURT GRAVELY ERRED IN REJECTING THE PLAINTIFFS’ CLAIM THAT THEIR
FATHER COULD NOT HAVE EXECUTED THE QUESTIONED DOCUMENT AT THE TIME OF ITS
ALLEGED EXECUTION.8

On August 18, 2005, the CA promulgated its assailed decision, reversing the RTC, and ruling as
follows:

The case of the Department of Education Culture and Sports (DECS) v. Del Rosario in GR No.
146586 (January 26, 2005) is instructive in resolving this issue. The said case held:

"Secondary evidence of the contents of a document refers to evidence other than the original
document itself. A party may introduce secondary evidence of the contents of a written instrument
not only when the original is lost or destroyed, but also when it cannot be produced in court,
provided there is no bad faith on the part of the offeror. However, a party must first satisfactorily
explain the loss of the best or primary evidence before he can resort to secondary evidence. A party
must first present to the court proof of loss or other satisfactory explanation for non-production of the
original instrument. The correct order of proof is as follows: existence, execution, loss, contents,
although the court in its discretion may change this order if necessary."

It is clear, therefore, that before secondary evidence as to the contents of a document may be
admitted in evidence, the existence of [the] document must first be proved, likewise, its execution
and its subsequent loss.
In the present case, the trial court found all three (3) prerequisites ha[ve] been established by
Margarita Prodon. This Court, however, after going through the records of the case, believes
otherwise. The Court finds that the following circumstances put doubt on the very existence of the
alleged deed of sale. Evidence on record showed that Maximo Alvarez was hospitalized between
August 23, 1975 to September 3, 1975 (Exhibit "K"). It was also established by said Exhibit "L" that
Maximo Alvarez suffered from paralysis of half of his body and blindness due to cataract. It should
further be noted that barely 6 days later, on September 15, 1975, Maximo Alvarez was again
hospitalized for the last time because he died on October of 1975 without having left the hospital.
This lends credence to plaintiffs-appellants’ assertion that their father, Maximo Alvarez, was not
physically able to personally execute the deed of sale and puts to serious doubt [on] Jose Camilion’s
testimony that Maximo Alvarez, with his wife, went to his residence on September 5, 1975 to sell the
property and that again they met on September 9, 1975 to sign the alleged deed of sale (Exhibits "A"
and "1"). The Court also notes that from the sale in 1975 to 1996 when the case was finally filed,
defendant-appellee never tried to recover possession of the property nor had she shown that she
ever paid Real Property Tax thereon. Additionally, the Transfer Certificate of Title had not been
transferred in the name of the alleged present owner. These actions put to doubt the validity of the
claim of ownership because their actions are contrary to that expected of legitimate owners of
property.

Moreover, granting, in arguendo, that the deed of sale did exist, the fact of its loss had not been duly
established. In De Vera, et al. v Sps. Aguilar (218 SCRA 602 1993), the Supreme Court held that after
proof of the execution of the Deed it must also be established that the said document had been lost
or destroyed, thus:

"After the due execution of the document has been established, it must next be proved that said
document has been lost or destroyed. The destruction of the instrument may be proved by any
person knowing the fact. The loss may be shown by any person who knew the fact of its loss, or by
anyone who had made, in the judgment of the court, a sufficient examination in the place or places
where the document or papers of similar character are usually kept by the person in whose custody
the document lost was, and has been unable to find it; or who has made any other investigation
which is sufficient to satisfy the court that the instrument is indeed lost.

However, all duplicates or counterparts must be accounted for before using copies. For, since all the
duplicates or multiplicates are parts of the writing itself to be proved, no excuse for non-production of
the writing itself can be regarded as established until it appears that all of its parts are unavailable
(i.e. lost, retained by the opponent or by a third person or the like).

In the case at bar, Atty. Emiliano Ibasco, Jr., notary public who notarized the document testified that
the alleged deed of sale has about four or five original copies. Hence, all originals must be
accounted for before secondary evidence can be given of any one. This[,] petitioners failed to do.
Records show that petitioners merely accounted for three out of four or five original copies." (218
SCRA at 607-608)

In the case at bar, Jose Camilion’s testimony showed that a copy was given to Atty. Anacleto
Lacanilao but he could not recover said copy. A perusal of the testimony does not convince this
Court that Jose Camilion had exerted sufficient effort to recover said copy. x x x

xxxx

The foregoing testimony does not convince this Court that Jose Camilion had exerted sufficient effort
to obtain the copy which he said was with Atty. Lacanilao. It should be noted that he never claimed
that Atty. Lacanilao was already too sick to even try looking for the copy he had. But even assuming
this is to be so, Jose Camilion did not testify that Atty. Lacanilao had no one in his office to help him
find said copy. In fine, this Court believes that the trial court erred in admitting the secondary
evidence because Margarita Prodon failed to prove the loss or destruction of the deed.

In fine, the Court finds that the secondary evidence should not have been admitted because
Margarita Prodon failed to prove the existence of the original deed of sale and to establish its loss.

xxxx

WHEREFORE, in view of the foregoing, the Decision of the Regional Trial Court of Manila, Branch
35 in Civil Case No. 96-78481 is hereby REVERSED and a new one entered ordering the
cancellation of Entry No. 3816/T-84797 inscribed at the back of TCT No. 84797 in order to remove
the cloud over plaintiff-appellants’ title.

SO ORDERED.9

The heirs of Margarita Prodon (who meanwhile died on March 3, 2002) filed an Omnibus Motion for
Substitution of Defendant and for Reconsideration of the Decision,10 wherein they alleged that the
CA erred: (a) in finding that the pre-requisites for the admission of secondary evidence had not been
complied with; (b) in concluding that the late Maximo Alvarez, Sr. had been physically incapable of
personally executing the deed of sale with right to repurchase; and (c) in blaming them for not
recovering the property, for not paying the realty taxes thereon, and for not transferring the title in
their names.

On November 22, 2005, the CA issued itsresolution,11 allowing the substitution of the heirs of
Margarita Prodon, and denying their motion for reconsideration for its lack of merit.

Hence, the heirs of Margarita Prodon (petitioners) have appealed to the Court through petition for
review on certiorari.

Issues

In this appeal, the petitioners submit the following as issues, namely: (a) whether the pre-requisites
for the admission of secondary evidence had been complied with; (b) whether the late Maximo
Alvarez, Sr. had been physically incapable of personally executing the deed of sale with right to
repurchase;and (c) whether Prodon’s claim of ownership was already barred by laches.12

Ruling

The appeal has no merit.

1.

Best Evidence Rulewas not applicable herein

We focus first on an unseemly error on the part of the CA that, albeit a harmless one, requires us to
re-examine and rectify in order to carry out our essential responsibility of educating the Bench and
the Bar on the admissibility of evidence. An analysis leads us to conclude that the CA and the RTC
both misapplied the Best Evidence Rule to this case, and their misapplication diverted the attention
from the decisive issue in this action for quieting of title. We shall endeavor to correct the error in
order to turn the case to the right track.
Section 3, Rule 130 of the Rules of Court embodies the Best Evidence

Rule, to wit:

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.

The Best Evidence Rule stipulates that in proving the terms of a written document the original of the
document must be produced in court. The rule excludes any evidence other than the original writing
to prove the contents thereof, unless the offeror proves: (a) the existence or due execution of the
original; (b) the loss and destruction of the original, or the reason for its non-production in court; and
(c) the absence of bad faith on the part of the offeror to which the unavailability of the original can be
attributed.13

The primary purpose of the Best Evidence Rule is to ensure that the exact contents of a writing are
brought before the court,14 considering that (a) the precision in presenting to the court the exact
words of the writing is of more than average importance, particularly as respects operative or
dispositive instruments, such as deeds, wills and contracts, because a slight variation in words may
mean a great difference in rights; (b) there is a substantial hazard of inaccuracy in the human
process of making a copy by handwriting or typewriting; and (c) as respects oral testimony
purporting to give from memory the terms of a writing, there is a special risk of error, greater than in
the case of attempts at describing other situations generally.15 The rule further acts as an insurance
against fraud.16 Verily, if a party is in the possession of the best evidence and withholds it, and seeks
to substitute inferior evidence in its place, the presumption naturally arises that the better evidence is
withheld for fraudulent purposes that its production would expose and defeat.17 Lastly, the rule
protects against misleading inferences resulting from the intentional or unintentional introduction of
selected portions of a larger set of writings.18

But the evils of mistransmission of critical facts, fraud, and misleading inferences arise only when the
issue relates to the terms of the writing. Hence, the Best Evidence Rule applies only when the terms
of a writing are in issue. When the evidence sought to be introduced concerns external facts, such
as the existence, execution or delivery of the writing, without reference to its terms, the Best
Evidence Rule cannot be invoked.19 In such a case, secondary evidence may be admitted even
without accounting for the original.

This case involves an action for quieting of title, a common-law remedy for the removal of any cloud
or doubt or uncertainty on the title to real property by reason of any instrument, record, claim,
encumbrance, or proceeding that is apparently valid or effective, but is, in truth and in fact, invalid,
ineffective, voidable, or unenforceable, and may be prejudicial to said title. In such an action, the
competent court is tasked to determine the respective rights of the complainant and other claimants
to place things in their proper place and to make the one who has no rights to said immovable
respect and not disturb the other. The action is for the benefit of both, so that he who has the right
would see every cloud of doubt over the property dissipated, and he can thereafter fearlessly
introduce any desired improvements, as well as use, and even abuse the property. For an action to
quiet title to prosper, two indispensable requisites must concur, namely: (a) the plaintiff or
complainant has a legal or an equitable title to or interest in the real property subject of the action;
and (b) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be
shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal
efficacy.20

The action for quieting of title may be based on the fact that a deed is invalid, ineffective, voidable, or
unenforceable. The terms of the writing may or may not be material to an action for quieting of title,
depending on the ground alleged by the plaintiff. For instance, when an action for quieting of title is
based on the unenforceability of a contract for not complying with the Statute of Frauds, Article 1403
of the Civil Code specifically provides that evidence of the agreement cannot be received without the
writing, or a secondary evidence of its contents. There is then no doubt that the Best Evidence Rule
will come into play.

It is not denied that this action does not involve the terms or contents of the deed of sale with right to
repurchase. The principal issue raised by the respondents as the plaintiffs, which Prodon challenged
head on, was whether or not the deed of sale with right to repurchase, duly executed by the late
Maximo Alvarez, Sr., had really existed. They alleged in the complaint that:

xxxx

9. Such entry which could have been maliciously and deliberately done by the defendant Margarita
Prodon created cloud and [is] prejudicial to the title of the property subject matter of this case, since
while it is apparently valid or effective, but in truth and in fact it is invalid, ineffective or unenforceable
inasmuch that the instrument purporting to be a Deed of Sale with right of repurchase mentioned in
the said entry does not exist.21

xxxx

On her part, Prodon specifically denied the allegation, averring in her answer that "sometime [o]n
September 9, 1975, deceased Maximo S. Alvarez lawfully entered into a Contract of Sale with Right
to Repurchase, object of which is the titled lot located at Endaya Street, Tondo, Manila, in favor of
defendant."22 In the pre-trial order, the RTC defined the issue to be tried as "[w]hether or not the
alleged document mentioned in the said entry is existing, valid or unenforceable,"23 and did not
include the terms of the deed of sale with right to repurchase among the issues.

Apparently, the parties were fully cognizant of the issues as defined, for none of them thereafter
ventured to present evidence to establish the terms of the deed of sale with right to repurchase. In
the course of the trial, however, a question was propounded to Prodon as to who had signed or
executed the deed, and the question was objected to based on the Best Evidence Rule. The RTC
then sustained the objection.24 At that point began the diversion of the focus in the case. The RTC
should have outrightly overruled the objection because the fact sought to be established by the
requested testimony was the execution of the deed, not its terms.25 Despite the fact that the terms of
the writing were not in issue, the RTC inexplicably applied the Best Evidence Rule to the case and
proceeded to determine whether the requisites for the admission of secondary evidence had been
complied with, without being clear as to what secondary evidence was sought to be excluded. In the
end, the RTC found in its judgment that Prodon had complied with the requisites for the introduction
of secondary evidence, and gave full credence to the testimony of Jose Camilon explaining the non-
production of the original. On appeal, the CA seconded the RTC’s mistake by likewise applying the
Best Evidence Rule, except that the CA concluded differently, in that it held that Prodon had not
established the existence, execution, and loss of the original document as the pre-requisites for the
presentation of secondary evidence. Its application of the Best Evidence Rule naturally led the CA to
rule that secondary evidence should not have been admitted, but like the RTC the CA did not state
what excluded secondary evidence it was referring to.

Considering that the Best Evidence Rule was not applicable because the terms of the deed of sale
with right to repurchase were not the issue, the CA did not have to address and determine whether
the existence, execution, and loss, as pre-requisites for the presentation of secondary evidence, had
been established by Prodon’s evidence. It should have simply addressed and determined whether or
not the "existence" and "execution" of the deed as the facts in issue had been proved by
preponderance of evidence.

Indeed, for Prodon who had the burden to prove the existence and due execution of the deed of sale
with right to repurchase, the presentation of evidence other than the original document, like the
testimonies of Prodon and Jose Camilon, the Notarial Register of Notary Eliseo Razon, and the
Primary Entry Book of the Register of Deeds, would have sufficed even without first proving the loss
or unavailability of the original of the deed.

2.

Prodon did not preponderantly establish the existence and due execution of the deed of sale with
right to repurchase

The foregoing notwithstanding, good trial tactics still required Prodon to establish and explain the
loss of the original of the deed of sale with right to repurchase to establish the genuineness and due
execution of the deed.26 This was because the deed, although a collateral document, was the
foundation of her defense in this action for quieting of title.27 Her inability to produce the original
logically gave rise to the need for her to prove its existence and due execution by other means that
could only be secondary under the rules on evidence. Towards that end, however, it was not
required to subject the proof of the loss of the original to the same strict standard to which it would
be subjected had the loss or unavailability been a precondition for presenting secondary evidence to
prove the terms of a writing.

A review of the records reveals that Prodon did not adduce proof sufficient to show the lossor
explain the unavailability of the original as to justify the presentation of secondary evidence.
Camilon, one of her witnesses, testified that he had given the original to her lawyer, Atty. Anacleto
Lacanilao, but that he (Camilon) could not anymore retrieve the original because Atty. Lacanilao had
been recuperating from his heart ailment. Such evidence without showing the inability to locate the
original from among Atty. Lacanilao’s belongings by himself or by any of his assistants or
representatives was inadequate. Moreover, a duplicate original could have been secured from
Notary Public Razon, but no effort was shown to have been exerted in that direction.

In contrast, the records contained ample indicia of the improbability of the existence of the deed.
Camilon claimed that the late Maximo Alvarez, Sr. had twice gone to his residence in Meycauayan,
Bulacan, the first on September 5, 1975, to negotiate the sale of the property in question, and the
second on September 9, 1975, to execute the deed of sale with right to repurchase, viz:
Q

Do you also know the deceased plaintiff in this case, Maximo Alvarez, Sr. and his wife Valentina
Clave, Mr. Witness?

Yes, sir.

Under what circumstance were you able to know the deceased plaintiff Maximo Alvarez, Sr. and his
wife?

When they went to our house, sir.

When was this specifically?

Sometime the first week of September or about September 5, 1975, sir.

What was the purpose of the spouses Maximo and Valentina in meeting you on that date?

They were selling a piece of land, sir.

xxxx

At the time when the spouses Maximo Alvarez, Sr. and Valentina Clave approached you to sell their
piece of land located at Endaya, Tondo, Manila, what document, if any, did they show you?

The title of the land, sir.

xxxx

Q
You said that on the first week of September or September 5, 1975 spouses Maximo and Valentina
approached you at the time, what did you tell the spouses, if any?

I asked them to come back telling them that I was going to look for a buyer, sir.

xxxx

You said that you told the spouse[s] Alvarez to just come back later and that you will look for a
buyer, what happened next, if any?

I went to see my aunt Margarita Prodon, sir.

What did you tell your aunt Margarita Prodon?

I convinced her to buy the lot.

ATTY. REAL

What was the reply of Margarita Prodon, if any?

She agreed, provided that she should meet the spouses, sir.

After Margarita Prodon told you that[,] what happened next, if any?

I waited for the spouses Alvarez to bring them to my aunt, sir.

Were you able to finally bring the spouses before Margarita Prodon?

A
Valentina Clave returned to our house and asked me if they can now sell the piece of land, sir.

What did you tell Valentina Clave?

We went to the house of my aunt so she can meet her personally, sir.

And did the meeting occur?

WITNESS

Yes, sir.

ATTY. REAL

What happened at the meeting?

I told Valentina Clave in front of the aunt of my wife that they, the spouses, wanted to sell the land,
sir.

What was the reply of your aunt Margarita Prodon at the time?

That Valentina Clave should come back with her husband because she was going to buy the lot,
sir.28

The foregoing testimony could not be credible for the purpose of proving the due execution of the
deed of sale with right to repurchase for three reasons. 1âwphi1

The first is that the respondents preponderantly established that the late Maximo Alvarez, Sr. had
been in and out of the hospital around the time that the deed of sale with right to repurchase had
been supposedly executed on September 9, 1975. The records manifested that he had been
admitted to the Veterans Memorial Hospital in Quezon City on several occasions, and had then been
diagnosed with the serious ailments or conditions, as follows:
 Period of confinement Diagnosis
March 31 – May 19, 1975 • Prostatitis, chronic
• Arteriosclerotic heart disease
• Atrial fibrillation
• Congestive heart failure
• CFC III29
June 2- June 6, 1975 • Chest pains (Atrial Flutter)
• Painful urination (Chronic
prostatitis)30
August 23-September 3, 1975 • Arteriosclerotic heart disease
• Congestive heart failure, mild
• Atrial fibrillation
• Cardiac functional capacity III-B31
September 15-October 2, 1975 • Arteriosclerotic heart disease
• Atrial fibrillation
• Congestive heart failure
• Pneumonia
• Urinary tract infection
• Cerebrovascular accident, old
• Upper GI bleeding probably
secondary to stress ulcers32

The medical history showing the number of very serious ailments the late Maximo Alvarez, Sr. had
been suffering from rendered it highly improbable for him to travel from Manila all the way to
Meycauayan, Bulacan, where Prodon and Camilon were then residing in order only to negotiate and
consummate the sale of the property. This high improbability was fully confirmed by his son,
Maximo, Jr., who attested that his father had been seriously ill, and had been in and out of the
hospital in 1975.33 The medical records revealed, too, that on September 12, 1975, or three days
prior to his final admission to the hospital, the late Maximo Alvarez, Sr. had suffered from "[h]igh
grade fever, accompanied by chills, vomiting and cough productive of whitish sticky sputum;"had
been observed to be "conscious" but "weak" and "bedridden" with his heart having "faint" sounds,
irregular rhythm, but no murmurs; and his left upper extremity and left lower extremity had suffered
90% motor loss.34 Truly, Prodon’s allegation that the deed of sale with right to repurchase had been
executed on September 9, 1975 could not command belief.

The second is that the annotation on TCT No. 84797 of the deed of sale with right to repurchase and
the entry in the primary entry book of the Register of Deeds did not themselves establish the
existence of the deed. They proved at best that a document purporting to be a deed of sale with right
to repurchase had been registered with the Register of Deeds. Verily, the registration alone of the
deed was not conclusive proof of its authenticity or its due execution by the registered owner of the
property, which was precisely the issue in this case. The explanation for this is that registration,
being a specie of notice, is simply a ministerial act by which an instrument is inscribed in the records
of the Register of Deeds and annotated on the dorsal side of the certificate of title covering the land
subject of the instrument.35 It is relevant to mention that the law on land registration does not require
that only valid instruments be registered, because the purpose of registration is only to give notice.36

By the same token, the entry in the notarial register of Notary Public Razon could only be proof that
a deed of sale with right to repurchase had been notarized by him, but did not establish the due
execution of the deed.
The third is that the respondents’ remaining in the peaceful possession of the property was further
convincing evidence demonstrating that the late Maximo Alvarez, Sr. did not execute the deed of
sale with right to repurchase. Otherwise, Prodon would have herself asserted and exercised her right
to take over the property, legally and physically speaking, upon the expiration in 1976 of the
repurchase period stipulated under the deed, including transferring the TCT in her name and paying
the real property taxes due on the properly. Her inaction was an index of the falsity of her claim
against the respondents.

In view of the foregoing circumstances, we concur with the CA that the respondents preponderantly,
proved that the deed of sale with right to repurchase executed by the late Maximo Alvarez, Sr. did
not exist in fact.

WHEREFORE, the Court AFFIRMS the decision promulgated on August 18, 2005 by the Court of
Appeals in C.A.-G.R. CV No. 58624 entitled Heirs of Maximo S. Alvarez and Valentina Clave,
represented by Rev. Maximo Alvarez, Jr. v. Margarita Prodon and the Register of Deeds of the City
Manila; and ORDERS the petitioners to pay the costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

THIRD DIVISION

G.R. No. 191696               April 10, 2013

ROGELIO DANTIS, Petitioner,
vs.
JULIO MAGHINANG, JR., Respondent.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari seeking to reverse and set aside the January 25, 2010
Decision1 and the March 23, 2010 Resolution2 of the Court of Appeals (CA). in CA-G.R. CV No.
85258, reversing the March 2, 2005 Decision3 of the Regional Trial Court, Branch 18, Malolos,
Bulacan (RTC), in an action for quieting of title and recovery of possession with damages.

The Facts

The case draws its origin from a complaint4 for quieting of title and recovery of possession with
damages filed by petitioner Rogelio Dantis (Rogelio) against respondent Julio Maghinang, Jr. (Julio,
Jr.) before the RTC, docketed as Civil Case No. 280-M-2002. Rogelio alleged that he was the
registered owner of a parcel of land covered by Transfer Certificate of Title (TCT) No. T-125918, with
an area of 5,657 square meters, located in Sta. Rita, San Miguel, Bulacan; that he acquired
ownership of the property through a deed of extrajudicial partition of the estate of his deceased
father, Emilio Dantis (Emilio), dated December 22, 1993; that he had been paying the realty taxes on
the said property; that Julio, Jr. occupied and built a house on a portion of his property without any
right at all; that demands were made upon Julio, Jr. that he vacate the premises but the same fell on
deaf ears; and that the acts of Julio, Jr. had created a cloud of doubt over his title and right of
possession of his property. He, thus, prayed that judgment be rendered declaring him to be the true
and real owner of the parcel of land covered by TCT No. T-125918; ordering Julio, Jr. to deliver the
possession of that portion of the land he was occupying; and directing Julio, Jr. to pay rentals from
October 2000 and attorney’s fees of ₱100,000.00.

He added that he was constrained to institute an ejectment suit against Julio, Jr. before the
Municipal Trial Court of San Miguel, Bulacan (MTC), but the complaint was dismissed for lack of
jurisdiction and lack of cause of action.

In his Answer,5 Julio, Jr. denied the material allegations of the complaint. By way of an affirmative
defense, he claimed that he was the actual owner of the 352 square meters (subject lot) of the land
covered by TCT No. T-125918 where he was living; that he had been in open and continuous
possession of the property for almost thirty (30) years; the subject lot was once tenanted by his
ancestral relatives until it was sold by Rogelio’s father, Emilio, to his father, Julio Maghinang, Sr.
(Julio, Sr.); that later, he succeeded to the ownership of the subject lot after his father died on March
10, 1968; and that he was entitled to a separate registration of the subject lot on the basis of the
documentary evidence of sale and his open and uninterrupted possession of the property.

As synthesized by the RTC from the respective testimonies of the principal witnesses, their
diametrically opposed positions are as follows:

Plaintiff Rogelio Dantis testified that he inherited 5,657 square meters of land, identified as Lot 6-D-1
of subdivision plan Psd-031421-054315, located at Sta. Rita, San Miguel, Bulacan, through an
Extrajudicial Partition of Estate of Emilio Dantis, executed in December 1993 which land was titled
later on under his name, Rogelio Dantis, married to Victoria Payawal, as shown by copy of Transfer
Certificate of Title No. T-125918, issued by the Register of Deeds of Bulacan on September 29,
1998, declared for taxation purposes as Tax Declaration with ARP No. C20-22-043-07-046.
According to him, defendant and his predecessor-in-interest built the house located on said lot.
When he first saw it, it was only a small hut but when he was about 60 years old, he told defendant
not to build a bigger house thereon because he would need the land and defendant would have to
vacate the land. Plaintiff, however, has not been in physical possession of the premises.

Defendant Julio Maghinang, Jr., presented by plaintiff as adverse witness, testified that he has no
title over the property he is occupying. He has not paid realty taxes thereon. He has not paid any
rental to anybody. He is occupying about 352 square meters of the lot. He presented an affidavit
executed on September 3, 1953 by Ignacio Dantis, grandfather of Rogelio Dantis and the father of
Emilio Dantis. The latter was, in turn, the father of Rogelio Dantis.

The affidavit, according to affiant Ignacio Dantis, alleged that Emilio Dantis agreed to sell 352 square
meters of the lot to Julio Maghinang on installment. Defendant was then 11 years old in 1952.

Defendant Julio Maghinang, Jr. likewise testified for the defendant’s case as follows: He owns that
house located at Sta. Rita, San Miguel, Bulacan, on a 352 square meter lot. He could not say that he
is the owner because there is still question about the lot. He claimed that his father, Julio Maghinang
(Sr.), bought the said lot from the parents of Rogelio Dantis. He admitted that the affidavit was not
signed by the alleged vendor, Emilio Dantis, the father of Rogelio Dantis. The receipt he presented
was admittedly a mere photocopy. He spent ₱50,000.00 as attorney’s fees. Since 1953, he has not
declared the property as his nor paid the taxes thereon because there is a problem.6

On March 2, 2005, the RTC rendered its decision declaring Rogelio as the true owner of the entire
5,657-square meter lot located in Sta. Rita, San Miguel, Bulacan, as evidenced by his TCT over the
same. The RTC did not lend any probative value on the documentary evidence of sale adduced by
Julio, Jr. consisting of: 1) an affidavit allegedly executed by Ignacio Dantis (Ignacio), Rogelio’s
grandfather, whereby said affiant attested, among others, to the sale of the subject lot made by his
son, Emilio, to Julio, Sr. (Exhibit "3")7; and 2) an undated handwritten receipt of initial downpayment
in the amount of ₱100.00 supposedly issued by Emilio to Julio, Sr. in connection with the sale of the
subject lot (Exhibit "4").8 The RTC ruled that even if these documents were adjudged as competent
evidence, still, they would only serve as proofs that the purchase price for the subject lot had not yet
been completely paid and, hence, Rogelio was not duty-bound to deliver the property to Julio, Jr.
The RTC found Julio, Jr. to be a mere possessor by tolerance. The dispositive portion of the RTC
decision reads:

WHEREFORE, Judgment is hereby rendered as follows:

1. quieting the title and removing whatever cloud over the title on the parcel of land, with area of
5,647 sq. meters, more or less, located at Sta. Rita, San Miguel, Bulacan, covered by Transfer
Certificate of Title No. T-125918 issued by the Register of Deeds of Bulacan in the name of "Rogelio
Dantis, married to Victoria Payawal";

2. declaring that Rogelio Dantis, married to Victoria Payawal, is the true and lawful owner of the
aforementioned real property; and

3. ordering defendant Julio Maghinang, Jr. and all persons claiming under him to peacefully vacate
the said real property and surrender the possession thereof to plaintiff or latter’s successors-in-
interest.

No pronouncement as to costs in this instance.

SO ORDERED.9

Julio, Jr. moved for a reconsideration of the March 2, 2005 Decision, but the motion was denied by
the RTC in its May 3, 2005 Order.10 Feeling aggrieved, Julio, Jr. appealed the decision to the CA.

On January 25, 2010, the CA rendered the assailed decision in CA-G.R. CV NO. 85258, finding the
appeal to be impressed with merit. It held that Exhibit "4" was an indubitable proof of the sale of the
352-square meter lot between Emilio and Julio, Sr. It also ruled that the partial payment of the
purchase price, coupled with the delivery of the res, gave efficacy to the oral sale and brought it
outside the operation of the statute of frauds. Finally, the court a quo declared that Julio, Jr. and his
predecessors-in-interest had an equitable claim over the subject lot which imposed on Rogelio and
his predecessors-in-interest a personal duty to convey what had been sold after full payment of the
selling price. The decretal portion of the CA decision reads:

IN VIEW OF THE FOREGOING, the decision appealed from is reversed. The heirs of Julio
Maghinang Jr. are declared the owners of the 352-square meter portion of the lot covered by TCT
No. T-125968 where the residence of defendant Julio Maghinang is located, and the plaintiff is
ordered to reconvey the aforesaid portion to the aforesaid heirs, subject to partition by agreement or
action to determine the exact metes and bounds and without prejudice to any legal remedy that the
plaintiff may take with respect to the unpaid balance of the price.

SO ORDERED.11

The motion for reconsideration12 filed by Rogelio was denied by the CA in its March 23, 2010
Resolution. Unfazed, he filed this petition for review on certiorari before this Court.

Issues:

The fundamental question for resolution is whether there is a perfected contract of sale between
Emilio and Julio, Sr. The determination of this issue will settle the rightful ownership of the subject
lot.

Rogelio submits that Exhibit "3" and Exhibit "4" are devoid of evidentiary value and, hence, deserve
scant consideration. He stresses that Exhibit "4" is inadmissible in evidence being a mere
photocopy, and the existence and due execution thereof had not been established. He argues that
even if Exhibit "4" would be considered as competent and admissible evidence, still, it would not be
an adequate proof of the existence of the alleged oral contract of sale because it failed to provide a
description of the subject lot, including its metes and bounds, as well as its full price or
consideration.13

Rogelio argues that while reconveyance may be availed of by the owner of a real property wrongfully
included in the certificate of title of another, the remedy is not obtainable herein since he is a
transferee in good faith, having acquired the land covered by TCT No. T-125918, through a Deed of
Extrajudicial Partition of Estate.14 He asserts that he could not be considered a trustee as he was not
privy to Exhibit "4." In any event, he theorizes that the action for reconveyance on the ground of
implied trust had already prescribed since more than 10 years had lapsed since the execution of
Exhibit "4" in 1953. It is the petitioner’s stance that Julio, Jr. did not acquire ownership over the
subject lot by acquisitive prescription contending that prescription does not lie against a real property
covered by a Torrens title. He opines that his certificate of title to the subject lot cannot be
collaterally attacked because a Torrens title is indefeasible and must be respected unless
challenged in a direct proceeding.15

The Court’s Ruling

In the case at bench, the CA and the RTC reached different conclusions on the question of whether
or not there was an oral contract of sale. The RTC ruled that Rogelio Dantis was the sole and rightful
owner of the parcel of land covered by TCT No. T-125918 and that no oral contract of sale was
entered into between Emilio Dantis and Julio Maghinang, Sr. involving the 352-square meter portion
of the said property. The CA was of the opposite view. The determination of whether there existed
an oral contract of sale is essentially a question of fact.

In petitions for review under Rule 45, the Court, as a general rule, does not venture to re-examine
the evidence presented by the contending parties during the trial of the case considering that it is not
a trier of facts and the findings of fact of the CA are conclusive and binding upon this Court. The rule,
however, admits of several exceptions. One of which is when the findings of the CA are contrary to
those of the trial court.16 Considering the incongruent factual conclusions of the CA and the RTC, this
Court is constrained to reassess the factual circumstances of the case and reevaluate them in the
interest of justice.
The petition is meritorious.

It is an age-old rule in civil cases that he who alleges a fact has the burden of proving it and a mere
allegation is not evidence.17 After carefully sifting through the evidence on record, the Court finds that
Rogelio was able to establish a prima facie case in his favor tending to show his exclusive ownership
of the parcel of land under TCT No. T-125918 with an area of 5,657 square meters, which included
the 352-square meter subject lot. From the records, it appears that TCT No. T-125918 is a derivative
of TCT No. T-256228, which covered a bigger area of land measuring 30,000 square meters
registered in the name of Emilio Dantis; that Emilio died intestate on November 13, 1952; that
Emilio’s five heirs, including Rogelio, executed an extra-judicial partition of estate on December 22,
1993 and divided among themselves specific portions of the property covered by TCT No. T-256228,
which were already set apart by metes and bounds; that the land known as Lot 6-D-1 of the
subdivision plan Psd-031421-054315 with an area of 5,657 sq. m. went to Rogelio, the property now
covered by TCT No. T-125918; and that the property was declared for realty tax purpose in the
name of Rogelio for which a tax declaration was issued in his name; and that the same had not been
transferred to anyone else since its issuance.

In light of Rogelio’s outright denial of the oral sale together with his insistence of ownership over the
subject lot, it behooved upon Julio, Jr. to contravene the former’s claim and convince the court that
he had a valid defense. The burden of evidence shifted to Julio, Jr. to prove that his father bought
the subject lot from Emilio Dantis. In Jison v. Court of Appeals,18 the Court held:

Simply put, he who alleges the affirmative of the issue has the burden of proof, and upon the plaintiff
in a civil case, the burden of proof never parts. However, in the course of trial in a civil case, once
plaintiff makes out a prima facie case in his favor, the duty or the burden of evidence shifts to
defendant to controvert plaintiff’s prima facie case, otherwise, a verdict must be returned in favor of
plaintiff. Moreover, in civil cases, the party having the burden of proof must produce a
preponderance of evidence thereon, with plaintiff having to rely on the strength of his own evidence
and not upon the weakness of the defendant’s. The concept of "preponderance of evidence" refers
to evidence which is of greater weight, or more convincing, that which is offered in opposition to it; at
bottom, it means probability of truth.19

Julio, Jr. failed to discharge this burden. His pieces of evidence, Exhibit "3" and Exhibit "4," cannot
prevail over the array of documentary and testimonial evidence that were adduced by Rogelio. The
totality of Julio, Jr.’s evidence leaves much to be desired.

To begin with, Exhibit "3," the affidavit of Ignacio, is hearsay evidence and, thus, cannot be accorded
any evidentiary weight. Evidence is hearsay when its probative force depends on the competency
and credibility of some persons other than the witness by whom it is sought to be produced. The
exclusion of hearsay evidence is anchored on three reasons: 1) absence of cross-examination; 2)
absence of demeanor evidence; and 3) absence of oath.20

Jurisprudence dictates that an affidavit is merely hearsay evidence where its affiant/maker did not
take the witness stand.21 The sworn statement of Ignacio is of this kind. The affidavit was not
identified and its averments were not affirmed by affiant Ignacio. Accordingly, Exhibit "3" must be
excluded from the judicial proceedings being an inadmissible hearsay evidence. It cannot be
deemed a declaration against interest for the matter to be considered as an exception to the hearsay
rule because the declarant was not the seller (Emilio), but his father (Ignacio). Exhibit "4," on the
other hand, is considered secondary evidence being a mere photocopy which, in this case, cannot
be admitted to prove the contents of the purported undated handwritten receipt. The best evidence
rule requires that the highest available degree of proof must be produced. For documentary
evidence, the contents of a document are best proved by the production of the document itself to the
exclusion of secondary or substitutionary evidence, pursuant to Rule 130, Section 322.

A secondary evidence is admissible only upon compliance with Rule 130, Section 5, which states
that: when the original 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 contents in some authentic document, or by
the testimony of witnesses in the order stated. Accordingly, the offeror of the secondary evidence is
burdened to satisfactorily prove the predicates thereof, namely: (1) the execution or existence of the
original; (2) the loss and destruction of the original or its non-production in court; and (3) the
unavailability of the original is not due to bad faith on the part of the proponent/offeror. Proof of the
due execution of the document and its subsequent loss would constitute the basis for the
introduction of secondary evidence.23 In MCC Industrial Sales Corporation v. Ssangyong
Corporation,24 it was held that where the missing document is the foundation of the action, more
strictness in proof is required than where the document is only collaterally involved.

Guided by these norms, the Court holds that Julio, Jr. failed to prove the due execution of the
original of Exhibit "4" as well as its subsequent loss. A nexus of logically related circumstance
rendered Julio, Jr.’s evidence highly suspect. Also, his testimony was riddled with improbabilities and
contradictions which tend to erode his credibility and raise doubt on the veracity of his evidence.

First, the claim of Julio, Jr. that Emilio affixed his signature on the original of Exhibit "4" in 1953 is
highly improbable because record shows that Emilio died even before that year, specifically, on
November 13, 1952. Excerpts from Julio, Jr.’s testimony relative to this matter are as follows:

Atty. Vicente Millora

(On Cross-examination)

Q: You don’t remember how old you were when this according to you you witnessed Emilio Dantis
signed this?

A: Eleven years old, Sir.

Q: So that was 1953?

A: Yes, Sir.

Q: And you were then…?

A: I was born October 1942, Sir.

Q: You were eleven (11) years old?

A: Yes, Sir.

Q: And you mean to say that you witnessed the signing allegedly of the original of Exhibit "4" when
you were eleven (11) years old?

A: Yes, Sir.
Q: And you remember what was signed in this receipt. From your memory can you tell the title of this
Exhibit "4"?

A: What I can say that it is a Sale, Sir.

Q: So, when you said that you witnessed an alleged sale you are referring to Exhibit "4"?

A: Yes, Sir.25 (Emphasis supplied)

Second, Julio, Jr.’s testimony pertinent to the alleged loss of the original of Exhibit "4" is laden with
inconsistencies that detract from his credibility. His testimony bears the earmarks of falsehood and,
hence, not reliable. Julio, Jr. testified in this wise:

Atty. Roldan Villacorta

(On Direct examination)

Q: Mr. Witness, I noticed that this document marked as Exhibit "4" is only a photocopy, where is the
original of this document?

A: The original was with the safekeeping of my parents because of the lapse of time the original was
misplaced, Sir.26

The above testimony of Julio, Jr. tends to give the impression that the original of the document was
lost while it was in the possession of his parents. During cross-examination, however, he testified
that it was lost while it was in his possession.

Atty. Vicente Millora

(On Cross-examination)

Q: x x x Where did you keep that document?

A: I was the one keeping that document because I live in different places, [the said] it was lost or
misplaced, Sir.

Q: In other words, it was lost while the same was in your possession??

A: Yes, Sir.27 (Emphasis supplied)

Still, later, Julio, Jr. claimed that his sister was the one responsible for the loss of the original of
Exhibit "4" after borrowing the same from him. Atty. Vicente Millora

(On Cross-examination)

Q: So, who is your sister to whom you gave the original?

A: Benedicta Laya, Sir.

A: I just lent to her the original copy, Sir.

Q: So, you lent this original of Exhibit "4" to your sister and your sister never returned the same to
you?

A: Yes, Sir, because it was lost, that was the only one left in her custody.

Interpreter:

Witness referring to the xerox copy.

Atty. Vicente Millora

Q: In other words, it was your sister who lost the original, is that correct?

A: Yes, Sir, when I lent the original.28 (Emphasis supplied)

The Court also notes the confused narration of Julio, Jr. regarding the last time he saw the original of
Exhibit "4."

Atty. Vicente Millora

(On Cross-examination)

Q: And when did you last see the original?

A: When my mother died in 1993 that was the last time I tried to see the original of the document
after her interment, Sir.

Q: Where did you see this document?

A: From the safekeeping of my mother, Sir.29

xxxx

Q: When did you get this Exhibit "4" now, the photocopy from your sister?

A: When the interment of my mother in September 1993, Sir.

Q: Now, let us reform. Which one did you get after the interment of your mother, this Exhibit "4" or
the original?

A: I asked that xerox copy because I have lost the original and I could not find the same, Sir.

Q: So, from the safe of your mother after her interment, what used you found and got this Exhibit
"4"?
A: Yes, Sir, from my sister.

Q: So, not from your mother safe?

A: The original was taken from the safe of my mother, Sir.

Q: So after your mother’s death you never saw the original?

A: I did not see it anymore because the original was lost before she died, Sir.30 (Underscoring
supplied)

Third, it is quite strange that two receipts were prepared for the initial payment of ₱100.00 in
connection with the sale of the subject lot. The Court notes that the contents of Exhibit "4" were
similar to those of Annex "A"31 of Julio, Jr.’s Answer, dated June 9, 2002. Annex "A," however, was
typewritten and the name of the recipient indicated therein was a certain Cornelio A. Dantis, whose
identity and participation in the alleged sale was never explained.

Fourth, apart from the lone testimony of Julio, Jr., no other witness who knew or read Exhibit "4,"
much less saw it executed, was presented. In the absence of any shred of corroborative evidence,
the Court cannot help but entertain doubts on the truthfulness of Julio, Jr.’s naked assertion.

Assuming, in gratia argumenti, that Exhibit "4" is admissible in evidence, there will still be no valid
and perfected oral contract for failure of Julio, Jr. to prove the concurrence of the essential requisites
of a contract of sale by adequate and competent evidence.

By the contract of sale, one of the contracting parties obligates himself to transfer the ownership of,
and to deliver, a determinate thing, and the other to pay therefor a price certain in money or its
equivalent.32 A contract of sale is a consensual contract and, thus, is perfected by mere consent
which is manifested by the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract.33 Until the contract of sale is perfected, it cannot, as an
independent source of obligation, serve as a binding juridical relation between the parties.34 The
essential elements of a contract of sale are: a) consent or meeting of the minds, that is, consent to
transfer ownership in exchange for the price; b) determinate subject matter; and c) price certain in
money or its equivalent.35 The absence of any of the essential elements shall negate the existence of
a perfected contract of sale.36

Seemingly, Julio, Jr. wanted to prove the sale by a receipt when it should be the receipt that should
further corroborate the existence of the sale. At best, his testimony only alleges but does not prove
the existence of the verbal agreement. Julio, Jr. miserably failed to establish by preponderance of
evidence that there was a meeting of the minds of the parties as to the subject matter and the
purchase price.

The chief evidence of Julio, Jr. to substantiate the existence of the oral contract of sale is Exhibit "4."
For a better understanding and resolution of the issue at hand, Exhibit "4" is being reproduced here:

Alamin ng sino mang

Makababasa

Akong si Emilio Dantis may sapat na Gulang may asawa naninirahan sa Sta Rita San Miguel Bul. ay
kusang nagsasasay ng sumosunod.
Na ako Tumanggap Kay Julio Maghinang ng ₱100.00 peso cuartang Pilipino, bilang paunang bayad
sa Lupa niyang nilote sa akin 400 apat na raan mahigit na metro cudrado.

Testigo Tumangap,

Emilio a Dantis

A perusal of the above document would readily show that it does not specify a determinate subject
matter. Nowhere does it provide a description of the property subject of the sale, including its metes
and bounds, as well as its total area. The Court notes that while Julio, Jr. testified that the land
subject of the sale consisted of 352 square meters, Exhibit "4," however, states that it’s more than
400 square meters. Moreover, Exhibit "4" does not categorically declare the price certain in money.
Neither does it state the mode of payment of the purchase price and the period for its payment.

In Swedish Match, AB v. Court of Appeals,37 the Court ruled that the manner of payment of the
purchase price was an essential element before a valid and binding contract of sale could exist.
Albeit the Civil Code does not explicitly provide that the minds of the contracting parties must also
meet on the terms or manner of payment of the price, the same is needed, otherwise, there is no
sale.38 An agreement anent the manner of payment goes into the price so much so that a
disagreement on the manner of payment is tantamount to a failure to agree on the price.39 Further, in
Velasco v. Court of Appeals,40 where the parties already agreed on the object of sale and on the
purchase price, but not on how and when the downpayment and the installment payments were to
be paid, this Court ruled:

Such being the situation, it cannot, therefore, be said that a definite and firm sales agreement
between the parties had been perfected over the lot in question. Indeed, this Court has already ruled
before that a definite agreement on the manner of payment of the purchase price is an essential
element in the formation of a binding and enforceable contract of sale. The fact, therefore, that the
petitioners delivered to the respondent the sum of ₱10,000.00 as part of the down-payment that they
had to pay cannot be considered as sufficient proof of the perfection of any purchase and sale
agreement between the parties herein under Art. 1482 of the new Civil Code, as the petitioners
themselves admit that some essential matter - the terms of payment - still had to be mutually
covenanted.41

The CA held that partial performance of the contract of sale- giving of a downpayment coupled with
the delivery of the res - took the oral contract out of the scope of the Statute of Frauds. This
conclusion arose from its erroneous finding that there was a perfected contract of sale. The above
disquisition, however, shows that there was none. There is, therefore, no basis for the application of
the Statute of Frauds. The application of the Statute of Frauds presupposes the existence of a
perfected contract.42 As to the delivery of the res, it does not appear to be a voluntary one pursuant
to the purported sale. If Julio, Jr. happened to be there, it was because his ancestors tenanted the
land. It must be noted that when Julio, Jr. built his house, Rogelio protested.

WHEREFORE, the petition is GRANTED. The assailed January 25, 2010 Decision and the March
23, 2010 Resolution of the Court Appeals, in CA-G.R. CV No. 85258, are REVERSED and SET
ASIDE. The March 2, 2005 Decision of the Regional Trial Court of Malolos, Bulacan, Branch 18, in
Civil Case No. 280-M-2002, is REINSTATED.

SO ORDERED.

JOSE CATRAL MENDOZA