The Supreme Court’s decision underscores that proving a legal relationship extends beyond mere documentary evidence; it embraces object and testimonial evidence as well. This ruling validates that a preponderance of evidence, encompassing all relevant facts and circumstances, can sufficiently establish such a relationship. Additionally, the Court reiterated that a valid mortgage requires the mortgagor to be the property’s owner or have the legal authority to mortgage it. If not, the mortgage is deemed null and void, protecting property rights against unauthorized transactions.

Unraveling a Mortgage Mystery: Can a Defectively Proven Relationship Invalidate a Real Estate Deal?

This case revolves around a dispute over a real estate mortgage. Sofia Tabuada and her daughters filed a case to nullify a mortgage on a property that they claim was improperly mortgaged by Eleanor Tabuada, who misrepresented herself as the deceased owner, Loreta Tabuada. The Regional Trial Court (RTC) initially ruled in favor of Sofia Tabuada, declaring the mortgage null and void. However, the Court of Appeals (CA) reversed this decision, questioning the sufficiency of the evidence presented to prove Sofia Tabuada’s relationship to the deceased Loreta Tabuada, the registered owner of the property. This appeal to the Supreme Court seeks to determine whether the CA erred in its assessment of the evidence and the validity of the mortgage itself.

The Supreme Court addressed the core issue of whether Sofia Tabuada adequately proved her legal relationship to the late Loreta Tabuada. The CA emphasized that the death certificate presented by the petitioners was not an authenticated copy and cited discrepancies in the name of the deceased as grounds to doubt the veracity of their claim. The Supreme Court, however, found that the CA erred in its strict interpretation of the evidence. According to the High Court, the Rules of Court recognize three types of evidence: object, documentary, and testimonial. While documentary evidence is often preferred, other forms of competent and relevant evidence should not be excluded.

The principle of preponderance of evidence, applicable in civil cases, requires that the existence of a contested fact be more probable than its nonexistence. This determination involves considering all the facts and circumstances, regardless of the type of evidence presented. The Court elucidated that even the perceived discrepancy in the name on the death certificate did not necessarily negate the legal relationship between Sofia Tabuada and Loreta Tabuada. The court emphasized that, to establish filiation, courts must consider not only the relevant testimonies but also other pertinent evidence.

In this case, Sofia Tabuada’s unchallenged declaration of being the daughter-in-law of the registered titleholder, coupled with the petitioners’ actual possession and use of the property as their family residence, strongly indicated a legal relationship. Furthermore, the Spouses Certeza, the mortgagees, were aware that Eleanor Tabuada and Tabuco were related to Sofia Tabuada and that their families resided on the same lot. The Court held that, taken together, these facts and circumstances competently affirmed the legal relationship between Sofia Tabuada and the late titleholder Loreta H. Tabuada, satisfying the requirement of preponderance of evidence. The Supreme Court cited People v. Sales, G.R. No. 177218, October 3, 2011, 658 SCRA 367, emphasizing the importance of considering relevant testimonies and other evidence in establishing filiation.

Building on this principle, the Supreme Court then turned to the validity of the real estate mortgage. Article 2085 of the Civil Code explicitly outlines the essential requisites for a valid mortgage:

(a) that it be constituted to secure the fulfillment of a principal obligation; (b) that the mortgagor be the absolute owner of the thing mortgaged; and (c) that the person constituting the mortgage has free disposal of the property, and in the absence of the right of free disposal, that the person be legally authorized for the purpose.

In this case, Loreta Tabuada had died in 1990, four years before the mortgage was constituted. Eleanor Tabuada and Trabuco admitted to Sofia Tabuada that they had mortgaged the property to the Spouses Certezas. Based on these facts, the RTC rightfully declared the mortgage null and void. Eleanor Tabuada fraudulently represented herself as the deceased Loreta Tabuada, the titleholder, when she executed the mortgage. This act clearly violated the requisites of Article 2085 of the Civil Code, as Eleanor Tabuada was neither the owner of the property nor legally authorized to mortgage it.

The Spouses Certeza argued that they were mortgagees in good faith, claiming they had no prior notice of Loreta Tabuada’s death and believed Eleanor Tabuada’s representation that she was Loreta Tabuada, the titleholder. However, the Supreme Court found this contention unpersuasive. The Court emphasized that the Spouses Certeza were aware of the familial relationship between the petitioners and Eleanor Tabuada and that both families resided on the property. This knowledge should have prompted them to exercise greater prudence and caution by inquiring into Eleanor Tabuada’s authority to mortgage the property. Failure to do so undermined their claim of being mortgagees in good faith.

The Court cited Embrado v. Court of Appeals, G.R. No. 51457, June 27, 1994, 233 SCRA 335, stating that individuals dealing with real property must not close their eyes to facts that should put a reasonable person on guard. Furthermore, the Court noted that the status of a mortgagee in good faith does not apply when the title is still in the name of the rightful owner and the mortgagor is a different person pretending to be the owner. In such cases, the mortgagee is not considered innocent, and the registered owner generally retains their title, as affirmed in Ereña v. Querrer-Kauffman, G.R. No. 165853, June 22, 2006, 492 SCRA 298, 320.

Finally, the Supreme Court addressed the RTC’s award of moral damages based on disrespect to the dead. The RTC reasoned that Eleanor Tabuada’s fraudulent impersonation of the late Loreta Tabuada constituted such disrespect. However, the Supreme Court disagreed, clarifying the scope of Article 309 of the Civil Code, which addresses disrespect to the dead. The Court noted that Article 309, situated under the title of Funerals, envisions acts of disrespect committed during the period of mourning or on the occasion of the funeral. Since Eleanor Tabuada’s actions did not occur within this context, they did not constitute disrespect to the dead as a basis for awarding moral damages.

FAQs

What was the key issue in this case?	The key issue was whether Sofia Tabuada sufficiently proved her legal relationship to the deceased Loreta Tabuada to nullify a mortgage on the property. The Court needed to decide if the evidence presented was sufficient to demonstrate the relationship between the parties.
What evidence did Sofia Tabuada present to prove her relationship?	Sofia Tabuada presented a death certificate, her testimony, and evidence of possession of the property. She also relied on the fact that the mortgagees were aware of her family’s residence on the land.
Why did the Court of Appeals initially rule against Sofia Tabuada?	The Court of Appeals questioned the authenticity of the death certificate and noted discrepancies in the name of the deceased. They believed that the evidence was insufficient to establish a legal relationship.
What did the Supreme Court say about the type of evidence needed to prove a legal relationship?	The Supreme Court clarified that while documentary evidence is preferred, object and testimonial evidence are also admissible. The court emphasized that a preponderance of evidence should be considered.
What is “preponderance of evidence”?	“Preponderance of evidence” means that the existence of a fact is more probable than its nonexistence. It requires a consideration of all the facts and circumstances presented in a case.
What makes a real estate mortgage valid under the Civil Code?	Under Article 2085 of the Civil Code, a valid mortgage requires that the mortgagor be the absolute owner of the property or legally authorized to mortgage it. Also, the mortgage must be constituted to secure the fulfillment of a principal obligation.
Why was the mortgage in this case deemed invalid?	The mortgage was deemed invalid because Eleanor Tabuada, who signed the mortgage, was not the owner of the property and was not authorized to mortgage it. She misrepresented herself as the deceased owner, Loreta Tabuada.
What is a “mortgagee in good faith”?	A “mortgagee in good faith” is someone who, without any knowledge of defect in the mortgagor’s title, enters into a mortgage contract. They are generally protected, but this status does not apply if they ignore facts that should put a reasonable person on guard.
Why weren’t the Spouses Certeza considered mortgagees in good faith?	The Spouses Certeza were aware that Sofia Tabuada and her family lived on the property and were related to Eleanor Tabuada. This knowledge should have prompted them to inquire further into Eleanor Tabuada’s authority to mortgage the property.
Why was the award of moral damages reversed?	The award of moral damages was reversed because the act of fraudulently representing the late Loreta Tabuada did not constitute disrespect to the dead under Article 309 of the Civil Code. This provision applies to acts committed during mourning or at the funeral.

In conclusion, this case reinforces the principle that establishing legal relationships relies on a holistic evaluation of evidence, not just documentary proof. It also serves as a reminder of the due diligence required in real estate transactions to ensure the validity of mortgages and protect property rights. The Supreme Court’s decision provides clarity on the type of evidence that can be used to prove a legal relationship, as well as the requisites for a valid mortgage and the responsibilities of mortgagees.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Sofia Tabuada, Novee Yap, Ma. Loreta Nadal, and Gladys Evidente v. Eleanor Tabuada, Julieta Trabuco, Laureta Redondo, and SPS. Bernan Certeza & Eleanor D. Certeza, G.R. No. 196510, September 12, 2018