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SPS. EUGENIO DE VERA v. FAUSTA CATUNGAL

FACTS:

The case involves a dispute over a Deed of Extrajudicial Settlement Among Heirs with Absolute Sale executed by Fausta Catungal and Genaro Catungal, siblings and heirs of Vicente Catungal. The Deed adjudicated between the siblings the two parcels of land owned by their deceased father Vicente, and transferred ownership of the properties to the Spouses Eugenio de Vera and Rosalia Padilla for a consideration of P30,000. Fausta, who affixed her thumbmark instead of her signature, claimed that she was deceived into signing the Deed by the spouses De Vera who took advantage of her illiteracy and old age. She alleged that the Deed is null and void and filed a complaint for Declaration of Nullity of Documents, Recovery of Ownership, Reconveyance, and Damages against the spouses De Vera. Fausta also claimed that the spouses De Vera cancelled the tax declarations under Vicente's name and had new ones issued under their names. Despite demanding the return of the properties, the spouses De Vera refused. Fausta passed away during the proceedings, and she was substituted by her heirs, namely, Gaudencio G. Diaz, Sr., Alfonso C. Diaz, and Lourdes C. Lopez.

Fausta and Genaro de Vera executed a Deed of Extra-Judicial Settlement Among Heirs with Absolute Sale, wherein they sold their shares in several properties to Eugenio de Vera and Rosalinda Padilla de Vera. Fausta, being illiterate, affixed her thumbmark on the Deed. Fausta later filed a case to declare the Deed as null and void, alleging that she did not understand the full import of the document and that it was procured through deceit and fraudulent misrepresentations. Fausta's daughter, Lourdes, testified that she was present during the affixture of the thumbmark but stated that there was no need for her to be made a witness or assist Fausta in executing the Deed.

The Regional Trial Court dismissed the case for lack of factual and legal bases, ruling that Fausta failed to present sufficient evidence to prove her allegations. The Court of Appeals, however, reversed the RTC's decision, holding that the presumption of mistake or fraud was not overcome, as Fausta admitted to being illiterate at the time of the Deed's execution. The CA declared the Deed null and void, ordered the restoration of the properties to Fausta's heirs, and imposed attorney's fees and costs of suit on the Spouses De Vera.

The Spouses De Vera appealed the CA's decision to the Supreme Court, arguing that Fausta failed to meet the required quantum of evidence, that the burden of proof was wrongly shifted to them, and that the Deed, being notarized, enjoys a presumption of regularity. Fausta's heirs, on the other hand, maintained that Fausta was an illiterate old woman and was unaccompanied at the time she affixed her thumbmark on the Deed.

This case involves a Deed of Sale executed by spouses Genaro and Fausta de Vera in favor of spouses Gliceria and Hermogenes de Jose for a parcel of land. The Deed was notarized by a notary public, but the notary did not testify in court. The Heirs of Fausta claim that Fausta was illiterate and that she did not understand the contents of the Deed. They contend that the Spouses De Vera failed to prove that the Deed was explained to Fausta, thus the presumption in Article 1332 of the Civil Code operates and renders the Deed null and void. The Spouses De Vera argue that Fausta failed to establish that her consent was vitiated by fraud, deceit, or undue influence. They asserted that Fausta's illiteracy was not convincingly proven and that Article 1332 is not applicable because there are two sellers involved in the Deed. The issue at hand is whether Fausta freely gave her consent to the Deed.

ISSUES:

  1. Whether fraud attended the execution of the contract.

  2. Whether the Deed is voidable due to vitiating fraud.

  3. Whether the consent of Fausta Catungal to the Deed was vitiated.

  4. Whether the Spouses De Vera satisfactorily explained the contents of the Deed to Fausta when she affixed her thumbmark.

RULING:

  1. The Court, after a thorough review of the records, affirms with modification the findings of the CA. The Deed is considered voidable since Fausta's consent was vitiated by fraud.

  2. The Spouses De Vera are ordered to restore the parcels of land to Fausta's and Genaro's heirs.

  3. Yes, the consent of Fausta Catungal to the Deed was vitiated. Fausta, as well as her daughter Lourdes, testified that Fausta was illiterate at the time of the execution of the Deed. The admissions of Eugenio and Valentino, who knew that Fausta was illiterate, further supported this claim. Thus, the presumption of fraud or mistake mentioned in Article 1332 of the Civil Code became operative for the benefit of Fausta. The Spouses De Vera failed to show, by clear and convincing evidence, that the contents of the Deed were sufficiently explained to Fausta, therefore, the presumption was not rebutted.

  4. No, the Spouses De Vera did not satisfactorily explain the contents of the Deed to Fausta when she affixed her thumbmark. Fausta testified that her children were not present during the execution of the Deed and that its contents were not explained to her. The records also failed to show that the Spouses De Vera satisfactorily explained the contents to Fausta. Thus, they failed to rebut the presumption under Article 1332 of the Civil Code.

PRINCIPLES:

  • Consent is an essential requisite of a contract and must be free, voluntary, willful, and with a reasonable understanding of the various obligations involved.

  • Consent may be vitiated by mistake, violence, intimidation, undue influence, or fraud, resulting in a voidable contract.

  • Article 1332 of the Civil Code provides protection for illiterate contracting parties, creating a presumption of fraud or mistake if the terms of the contract are not fully explained.

  • The burden of proof is on the contracting party alleging vitiated consent to establish their inability to read and the other party's failure to fully explain the contract. The burden then shifts to the other party to rebut the presumption.

  • The presumption in Article 1332 is applicable when the illiterate party establishes their illiteracy at the time of contract execution.

  • The presumption of fraud or mistake mentioned in Article 1332 of the Civil Code becomes operative for the benefit of a party whose consent to a contract is vitiated.

  • Notarized documents enjoy the presumption of regularity and evidentiary weight as to their due execution but this presumption may be rebutted by clear and convincing evidence.

  • The consent of a party to a contract may be vitiated if the contents of the contract are not explained to the party who is illiterate or unable to read and write.