G.R. No. 196074 October 4, 2017
FLORENCIA ARJONILLO, Petitioner, vs. DEMETRIA PAGULAYAN, as substituted by her heirs, Respondents.

FACTS

Avelardo Cue died intestate in 1987, survived by several nieces and nephews. They executed an extrajudicial settlement of his estate, which included a commercial lot and building. However, the lot was registered under the name of Demetria Pagulayan per a Transfer Certificate of Title. The heirs, including petitioner Florencia Arjonillo, filed a complaint for reivindicacion and partition. They alleged that Cue was the true owner, having purchased the property with his own funds, but that Pagulayan, his paramour, used undue influence to have it registered solely in her name, a transaction void against public policy.
Pagulayan claimed she legitimately acquired the property from the Spouses Chua in 1976 for a valuable consideration, as evidenced by a deed of absolute sale. She argued the plaintiffs had no cause of action. The Regional Trial Court (RTC) ruled in favor of the heirs, declaring Pagulayan not the rightful owner and ordering partition. The RTC gave credence to witness testimony, including that of Dr. Benito Valdepanas, a nephew of the original sellers, who stated the lot was sold to Cue and that Pagulayan was merely Cue’s salesgirl. The Court of Appeals (CA) reversed the RTC, dismissing the complaint. The CA found the heirs failed to prove the property formed part of Cue’s estate and deemed the witnesses’ testimonies hearsay.

ISSUE

Whether the Court of Appeals erred in reversing the RTC and dismissing the complaint, particularly in its findings regarding the ownership of the disputed properties and the admissibility of witness testimony.

RULING

The Supreme Court denied the petition and affirmed the CA decision. The Court emphasized that in an accion reivindicatoria, the plaintiff must prove both the identity of the property and their title thereto by a preponderance of evidence. The burden of proof rested on the heirs to establish that the properties belonged to Cue’s estate. The Court found they failed to discharge this burden. Pagulayan presented competent evidence of ownership: a notarized Deed of Absolute Sale from the Spouses Chua, the corresponding Transfer Certificate of Title in her name, and tax declarations and receipts. Her financial capacity was supported by her Income Tax Return.
Conversely, the heirs’ evidence was insufficient. The testimony of Dr. Valdepanas was correctly considered hearsay by the CA regarding the execution of the deed of sale to Pagulayan, as he admitted he had no personal knowledge of that transaction. His claim that the property was sold to Cue was unsubstantiated by any documentary proof. The allegation of undue influence as paramours was also not proven. The Torrens title in Pagulayan’s name enjoys the presumption of regularity, which the heirs did not overcome with clear and convincing evidence. The CA correctly exercised its review power to correct the RTC’s patent errors, as the evidence on record did not support the conclusion that Cue was the true owner.