G.R. No. 187490 ; February 8, 2012
ANTONIA R. DELA PEÑA and ALVIN JOHN B. DELA PEÑA, Petitioners, vs. GEMMA REMILYN C. AVILA and FAR EAST BANK & TRUST CO., Respondents.

FACTS

Petitioner Antonia Dela Peña, whose husband Antegono was already deceased, owned a parcel of land in Marikina City. On May 7, 1996, she obtained a loan from A.C. Aguila & Sons and executed a real estate mortgage over the property to secure it. On November 4, 1997, Antonia executed a Deed of Absolute Sale over the same property in favor of respondent Gemma Avila for a stated consideration of P600,000. Using this deed, Gemma secured a new title in her name. She then mortgaged the property to respondent Far East Bank and Trust Company (FEBTC, now BPI) to secure various loans.
Antonia later filed an affidavit of adverse claim, alleging the sale to Gemma was simulated. She and her son Alvin filed a complaint to annul the deed of sale, claiming it was executed because Gemma misled Antonia into believing the transfer was necessary to secure a loan from FEBTC for Antonia’s benefit. They argued the property was conjugal and the mortgage to Aguila was void for lack of spousal consent. The Regional Trial Court ruled in favor of the Dela Peñas, declaring the sale void. The Court of Appeals reversed, upholding the validity of the sale and the subsequent mortgage foreclosure in favor of FEBTC.

ISSUE

The core issue is whether the Deed of Absolute Sale dated November 4, 1997, executed by Antonia Dela Peña in favor of Gemma Avila, is valid and binding.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision, upholding the validity of the sale. The Court found that the evidence presented by Antonia failed to overcome the presumption of regularity and due execution of the notarized deed of absolute sale. A notarized document carries the evidentiary weight of a public document, enjoying a presumption of authenticity and regularity. For it to be annulled on the ground of being simulated, the evidence must be clear, convincing, and more than merely preponderant.
The petitioners’ claim that the sale was a mere loan accommodation or that Antonia was misled was not substantiated by credible evidence. The Court found Antonia’s testimony inconsistent and lacking corroboration. Furthermore, the property was correctly adjudged as Antonia’s exclusive property, as the loan and mortgage from 1996 were contracted after her husband’s death, converting the conjugal asset into her exclusive capital. Consequently, she had the full capacity to sell it. The subsequent mortgage and foreclosure by FEBTC were also declared valid, as the bank was a mortgagee in good faith who relied on Gemma’s clean certificate of title. The annotation of Antonia’s adverse claim and notice of lis pendens occurred after FEBTC had already extended the loans and registered its mortgage, thus not affecting the bank’s rights.