In Uy v. Heirs of Uy-Renales, the Supreme Court clarified that a deed of sale does not automatically guarantee a valid property transfer. The court emphasized the necessity of mutual consent between parties for a sale to be legitimate, even if a document exists. This decision highlights the importance of proving genuine agreement and challenges the presumption that notarized documents invariably reflect the true intentions of those involved, ensuring fairness and protecting property rights within familial transactions.

Family Secrets: When a Notarized Deed Doesn’t Guarantee a Property Sale

The case revolves around a dispute over Lot No. 43 and a building erected on it in Catbalogan, Samar. Pablo Uy, later substituted by his heirs, filed a case against the Heirs of Julita Uy-Renales, seeking to nullify a Deed of Absolute Sale. This deed purportedly transferred the lot from Pablo’s mother, Eufronia Labnao, to the Heirs of Julita. Pablo argued that the signature on the deed was forged and that the sale was fraudulent, depriving him of his rightful inheritance. The Heirs of Julita countered that they had legally acquired the property through the sale.

At the heart of the legal battle was the authenticity of the Deed of Absolute Sale. The Court of Appeals (CA) had previously affirmed the Regional Trial Court’s (RTC) decision, giving weight to the notarized deed and presuming its regularity. However, the Supreme Court reversed these decisions, emphasizing that a notarized document does not automatically equate to a valid contract of sale. The court highlighted a critical flaw: the notary public, Atty. Mendiola, admitted that he did not properly verify the identity of Eufronia Labnao during the notarization process. This failure to ascertain identity undermined the presumption of regularity typically afforded to notarized documents.

The Supreme Court underscored that a contract of sale requires three essential elements: consent, object, and price. Consent, in particular, is the meeting of the minds between the parties involved. The court emphasized that even with a document purporting to be a contract of sale, the absence of genuine consent invalidates the agreement. Citing Spouses Salonga v. Spouses Concepcion, the Court reiterated that notarization does not validate an instrument lacking the parties’ true intent to create binding legal effects.

“The notarization of a document does not guarantee its validity because it is not the function of the notary public to validate an instrument that was never intended by the parties to have any binding legal effect. Neither is the notarization of a document conclusive as to the nature of the transaction, nor is it conclusive of the true agreement of the parties thereto.”

In this case, the testimony of respondent Jessica R. Rosero proved to be pivotal. She admitted that the Heirs of Julita had no prior agreement with their grandmother, Labnao, regarding the sale of the lot. They were surprised when Labnao presented them with the deed, indicating a lack of consent from their side. This admission directly contradicted the claim that a valid contract of sale existed. The court pointed out that Jessica’s testimony revealed no offer to buy the property nor any acceptance of such an offer, further solidifying the absence of mutual consent.

The Supreme Court also noted the failure to register the Deed of Absolute Sale with the Registry of Deeds. This omission further weakened the claim of a legitimate sale transaction. If a genuine sale had occurred, the buyers would have typically ensured the registration of the deed and the transfer of the Transfer Certificate of Title (TCT) to their names. This lack of registration reinforced the court’s conclusion that no valid contract of sale had taken place.

The court then considered the possibility of the deed being a donation. Under Article 749 of the Civil Code, a donation of immovable property must be made in a public document, specifying the property and the charges the donee must satisfy. The donee must also manifest their acceptance in the same public instrument or in a separate instrument, with notification to the donor in an authentic form. However, since the Deed of Absolute Sale was not properly notarized, it could not be considered a valid public document. Moreover, there was no evidence of the Heirs of Julita formally accepting the donation, rendering the donation void.

Even if the transfer was considered a valid donation, the court noted it would still be subject to collation under Articles 908 and 1064 of the Civil Code. This would mean the donated property would be brought back into the estate of Labnao and divided equally between Pablo Uy and the Heirs of Julita, ensuring a fair distribution of inheritance.

Article 749 of the Civil Code states: “In order that the donation of an immovable may be valid, it must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy. The acceptance may be made in the same deed of donation or in a separate public document. If the acceptance is made in a separate instrument, it shall be notified to the donor in an authentic form, and this step shall be noted in both instruments.”

The Supreme Court ultimately ruled that both the lot and building should be considered co-owned by Pablo Uy and the Heirs of Julita as the intestate heirs of Labnao. This decision allows the parties to either judicially or extrajudicially partition the properties, ensuring a fair division of the inheritance. The court’s decision underscores the critical importance of consent and proper notarization in property transactions, protecting the rights of heirs and ensuring the integrity of property transfers.

FAQs

What was the key issue in this case?	The central issue was whether a valid contract of sale existed between Eufronia Labnao and the Heirs of Julita Uy-Renales for Lot No. 43, based on a Deed of Absolute Sale. The Supreme Court focused on whether there was genuine consent to the sale.
Why did the Supreme Court invalidate the Deed of Absolute Sale?	The Court found that the Deed of Absolute Sale was not properly notarized because the notary public failed to verify the identity of Eufronia Labnao. Additionally, the Heirs of Julita admitted they had no prior agreement to purchase the property, indicating a lack of consent.
What is the significance of notarization in property sales?	Notarization typically provides a presumption of regularity and authenticity to a document. However, the Supreme Court clarified that notarization does not guarantee validity, especially if there is evidence of fraud or lack of consent.
What are the essential elements of a contract of sale?	The essential elements of a contract of sale are consent, object (the property being sold), and price (the consideration for the sale). All three elements must be present for a valid contract to exist.
What did the Court rule regarding the ownership of the property?	The Supreme Court ruled that both the lot and the building on it are co-owned by Pablo Uy (now his heirs) and the Heirs of Julita Uy-Renales. This co-ownership is based on their status as intestate heirs of Eufronia Labnao.
What is collation, and why is it relevant in this case?	Collation is the process of bringing back into the estate any property that was donated during the deceased’s lifetime. Even if the transfer was a valid donation, it would be subject to collation, ensuring a fair distribution of the inheritance.
What happens now to the co-owned property?	The parties (the heirs of Pablo Uy and the Heirs of Julita Uy-Renales) can now choose to either judicially or extrajudicially partition the co-owned properties. This will allow them to divide the properties according to their respective shares.
What is the implication of failing to register the Deed of Absolute Sale?	The failure to register the Deed of Absolute Sale raised doubts about the legitimacy of the transaction. A genuine buyer would typically ensure registration to protect their ownership rights, so the lack of registration weakens the claim of a valid sale.

This case serves as a reminder of the importance of clear agreements and proper legal procedures in property transactions, particularly within families. The Supreme Court’s emphasis on consent and due diligence in notarization ensures that property rights are protected and that transactions reflect the true intentions of all parties involved.

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: Uy v. Heirs of Uy-Renales, G.R. No. 227460, December 05, 2019