G.R. No. 198718 ; November 27, 2013
SPOUSES TEODORO and ROSARIO SARAZA and FERNANDO SARAZA, Petitioners, vs. WILLIAM FRANCISCO, Respondent.

FACTS

The case originated from a complaint for specific performance filed by respondent William Francisco against petitioners Fernando Saraza and his parents, Spouses Teodoro and Rosario Saraza. The parties executed an Agreement dated September 1, 1999, wherein Fernando agreed to sell his 100-square meter share in a Makati lot to Francisco for ₱3,200,000.00. Francisco paid ₱1,200,000.00 upon execution, with the balance to be applied to the petitioners’ loan at the Philippine National Bank (PNB). As security, it was agreed that should the property transfer fail, another property owned by Rosario and Fernando (TCT No. 156126) would serve as collateral. The petitioners also executed an Authority in favor of Francisco, allowing him to pay their PNB loan, negotiate its restructuring, and receive the owner’s duplicate title upon full payment.
Subsequently, when the loan balance was nearly settled, Francisco requested a Special Power of Attorney to receive the title from PNB. The petitioners refused and instead executed an Amended Authority directing PNB to return the title to them. They also caused Francisco’s eviction from the collateral property. Francisco thus filed the complaint. The petitioners opposed, claiming the initial ₱1,200,000.00 payment was never received, despite their acknowledgment in the notarized Agreement.

ISSUE

The primary issue is whether the petitioners are obligated to specifically perform their obligations under the Agreement, particularly the execution of a deed of sale and the delivery of the title, given their defense of non-payment of the initial consideration.

RULING

The Supreme Court affirmed the lower courts’ rulings, ordering specific performance but deleted the unsubstantiated award of damages. The Court upheld the validity and enforceability of the notarized Agreement. It emphasized that a notarized document carries the presumption of regularity and is a public document that enjoys prima facie evidence of its authenticity and due execution. The petitioners’ bare denial of receipt of the ₱1,200,000.00, contradicted by their own written acknowledgment in the Agreement, was insufficient to overcome this presumption. The Court ruled that for a party to overcome the presumption of truthfulness of a notarized document’s contents, the evidence must be clear, convincing, and more than merely preponderant.
Furthermore, the Court found that Francisco had fully complied with his obligation by paying the balance directly to PNB, as evidenced by a certification of full payment. The petitioners’ subsequent acts of revoking the Authority and evicting Francisco constituted a clear breach of contract. Therefore, Fernando Saraza was ordered to execute a deed of absolute sale, deliver the title, and pay the corresponding transfer taxes. However, the award of ₱100,000.00 as damages was deleted for lack of factual and legal basis, as the trial court failed to specify the nature of the damages and the respondent did not sufficiently substantiate his claim for actual or moral damages.