GR 72121; (February, 1991) (Digest)
G.R. No. 72121 ; February 6, 1991
RAFAEL PAGSUYUIN and PEREGRINA PAGSUYUIN-SUBIDO, petitioners, vs. INTERMEDIATE APPELLATE COURT and SALUD PAGSUYUIN, respondents.
FACTS
Private respondent Salud Pagsuyuin discovered that her real properties in Olongapo City had been mortgaged to Manila Banking Corporation by an acquaintance, Gregoria Schlander, using a forged power of attorney. As the loan was unpaid, the bank initiated foreclosure. To prevent this, Salud filed a case to annul the mortgage. Her first cousins, petitioners Rafael Pagsuyuin and Peregrina Pagsuyuin-Subido, offered to settle the bank loan to help her retain ownership, proposing that Peregrina could stay in the leased premises rent-free and Salud would repay the advanced amount with interest.
Subsequently, two Deeds of Assignment were presented, allegedly executed on September 13, 1976, transferring Salud’s properties to the petitioners in consideration of P256,362.96. Salud, however, denied executing these documents, claiming she was in Batangas on that date, and her alleged instrumental witnesses were elsewhere. She filed an amended complaint for annulment of the deeds, alleging her signature and those of her witnesses were obtained through fraud and trickery by the petitioners.
ISSUE
Whether the Deeds of Assignment are null and void due to fraud in their execution.
RULING
Yes, the Deeds of Assignment are null and void. The Supreme Court affirmed the decisions of the lower courts, which found that the documents were fraudulently procured. The legal logic rests on the principle that fraud vitiates consent, a requisite for a valid contract. While notarized documents enjoy a presumption of regularity, this presumption is disputable and may be overcome by clear and convincing evidence of fraud.
Here, the testimonies of Salud and her witnesses, which the trial court found credible, positively established that they did not appear before the notary on the alleged date of execution. This evidence was clear, convincing, and more than merely preponderant, successfully rebutting the presumption of the deeds’ validity. The factual findings of the trial court and the Intermediate Appellate Court on this matter are accorded great respect and finality, as trial judges are in the best position to assess witness credibility.
Furthermore, the award of moral and exemplary damages plus attorney’s fees to Salud was upheld. The petitioners’ fraudulent act was the proximate cause of the mental anguish she suffered, providing a sufficient factual and legal basis for such damages under the Civil Code. The wrongful act is penalized, and the claimant is compensated for the actual injury sustained due to the fraud.