G.R. No. 162864 ; March 28, 2007
SPS. PEBLIA ALFARO and PROSPEROUS ALFARO, Petitioners, vs. HON. COURT OF APPEALS, SPS. OLEGARIO P. BAGANO and CECILIA C. BAGANO, Respondents.

FACTS

Spouses Olegario and Cecilia Bagano (respondents) filed a complaint against Spouses Peblia and Prosperous Alfaro (petitioners) for Declaration of Nullity of Sale with Damages and Preliminary Injunction. Respondents alleged they were the registered owners of Lot No. 1710 covered by TCT No. 78445. They executed a Real Estate Mortgage over the lot in favor of petitioners on June 22, 1994, to secure a loan of ₱180,000.00. After paying the debt, a Cancellation and Discharge of Mortgage was executed on June 20, 1995. When respondents demanded the return of their title, petitioners refused. Upon verification with the Register of Deeds, respondents discovered their title had been cancelled and a new one, TCT No. 92783, was issued in petitioners’ name by virtue of a Deed of Absolute Sale dated June 14, 1995, which respondents claimed was spurious as their signatures thereon were forged.
Petitioners denied the forgery, insisting respondents sold the lot to them for ₱534,000.00 in June 1995. Respondents presented handwriting expert Romeo Varona, who initially examined a copy of the Deed of Absolute Sale (Exh. “B”) and specimen signatures provided by respondents. In his Report No. 006-96 dated January 11, 1996, he concluded the signatures on Exh. “B” were forged. During trial on November 25, 1998, Varona affirmed this conclusion.
Petitioners later requested Varona to examine another set of documents they claimed contained respondents’ genuine signatures, including another copy of the Deed of Absolute Sale (Exh. “13”). On cross-examination, Varona stated the signatures on the documents provided by petitioners, including Exh. “13,” were affixed by the same persons.
The Regional Trial Court (RTC) dismissed the complaint, ordered respondents to pay damages, and found that Varona had retracted his earlier finding of forgery after examining the second set of documents. The Court of Appeals reversed the RTC, declared the Deed of Absolute Sale null and void ab initio, reinstated respondents’ title, and awarded them moral damages and attorney’s fees.

ISSUE

Whether the signatures of respondents on the Deed of Absolute Sale were forged, thereby rendering the document spurious and the sale null and void.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the RTC Decision, upholding the validity of the Deed of Absolute Sale.
The Court held that the Deed of Absolute Sale, being a notarized document, enjoys the presumption of regularity and due execution. To overcome this presumption, evidence must be clear, convincing, and more than merely preponderant. Respondents relied on Varona’s initial examination of Exh. “B” and his direct testimony to prove forgery. However, the Court found Varona’s subsequent examination of Exh. “13” and his testimony on cross-examination critical. Varona testified that the signatures on Exh. “13” and the other documents submitted by petitioners were genuine and affixed by the same persons. The Court emphasized that Exh. “13” was a duplicate original of the Deed of Absolute Sale, and under the “duplicate originals rule,” both copies (Exh. “B” and Exh. “13”) are considered of equal weight as evidence of the transaction. The inconsistency in Varona’s findings between the two copies created reasonable doubt regarding the alleged forgery. Furthermore, petitioners presented corroborative evidence, including the Real Estate Mortgage and acknowledgment receipts, supporting their claim of a valid sale. The Court concluded respondents failed to present the clear and convincing evidence required to overcome the presumption of regularity of the notarized deed. Therefore, the Deed of Absolute Sale was valid, and the sale of the lot to petitioners was upheld.