G.R. No. 161136 ; November 16, 2006
WILFREDO T. VAGILIDAD and LOLITA A. VAGILIDAD, Petitioners, vs. GABINO VAGILIDAD, Jr. and DOROTHY VAGILIDAD, Respondents.

FACTS

Zoilo Labiao owned Lot No. 1253. Upon his death, his son Loreto Labiao sold a portion (Lot 1253-B) to respondent Gabino Vagilidad, Jr. in 1986. The heirs later executed an extrajudicial settlement in 1987, adjudicating the entire lot to Loreto, who obtained a title. Gabino Jr. filed a petition to compel Loreto to surrender the title but the case was archived after an apparent amicable settlement. In 1989, Gabino Jr. executed a deed of absolute sale for the same lot in favor of his nephew, petitioner Wilfredo Vagilidad. On the same date, Loreto also executed a deed of absolute sale for the same property to Wilfredo. Wilfredo obtained a title, mortgaged the property twice to banks, and discharged both mortgages.
Subsequently, Gabino Jr. and his wife Dorothy filed a complaint for annulment of the 1989 sale, reconveyance, and damages against Wilfredo and his wife Lolita. Gabino Jr. claimed the sale to Wilfredo was merely to facilitate a loan with an agreement to return the property, was without consideration, and was executed without his spouse’s consent. Wilfredo asserted he was the lawful owner by virtue of the sale from Loreto and his subsequent title.

ISSUE

The core issue is whether the 1989 Deed of Absolute Sale from Gabino Jr. to Wilfredo is valid and binding, thereby precluding reconveyance.

RULING

The Supreme Court ruled in favor of the petitioners, Wilfredo and Lolita, and upheld the validity of the 1989 sale. The Court found that Gabino Jr. failed to prove by clear and convincing evidence that the sale was simulated or lacked consideration. The notarized deed enjoys the presumption of regularity and carries the evidentiary weight of a public document. Gabino Jr.’s claim of a mere loan accommodation was uncorroborated and belied by his own actions, including his failure to assert ownership during the long period Wilfredo possessed the title, mortgaged the property, and paid realty taxes.
Furthermore, the Court held that Gabino Jr.’s sale to Wilfredo in 1989 was an effective mode of transferring whatever rights he had acquired from Loreto in 1986. Even assuming arguendo that Gabino Jr.’s initial purchase from Loreto was defective because the lot was still part of an undivided estate, Gabino Jr. acquired a right or interest which he could validly assign. Wilfredo’s subsequent acquisition of a title derived from Loreto’s 1989 sale further fortified his ownership. The action for annulment based on alleged fraud or simulation had also prescribed, having been filed beyond the four-year period from the execution of the deed. Thus, no basis existed for reconveyance.