Assailed in this petition for review on certiorari^[1] are the Decision^[2] dated April 25, 2013 and the Resolution^[3] dated September 24, 2013 rendered by the Court of Appeals (CA) in CA-G.R. CV No. 95606, affirming the Decision^[4] dated June 11, 2010 of the Regional Trial Court of San Pablo City, Branch 32 (RTC) in Civil Case No. SP-5831(01).

The Facts

The subject matter of the present controversy is a parcel of land described as Lot 2-C of subdivision plan Psd-04-009554, covered by Transfer Certificate of Title (TCT) No. T-41382^[5] of the Register of Deeds of San Pablo City (Lot 2-C) in the name of petitioners Damaso T. Ambray (Damaso) and Ceferino T. Ambray, Jr. (Ceferino, Jr.; collectively, petitioners).

Petitioners and respondents Sylvia A. Tsourous,^[6] Carmencita Ambray-Laurel, Hedy Ambray-Azores, Vivien Ambray-Yatco, Nancy Ambray-Escudero, Maristela Ambray-Ilagan (Maristela), Elizabeth Ambray-Soriano, Ma. Fe Luisa Ambray-Arcilla (Ma. Fe Luisa),^[7] and Cristina Ambray-Labit are siblings. With the exception of Sylvia,^[8] they are the children of the late Ceferino Ambray (Ceferino, Sr.) and Estela Trias (Estela), who passed away on February 5, 1987 and August 15, 2002, respectively.

During their lifetime, Ceferino, Sr. and Estela owned several properties, one of which was a parcel of land located in San Pablo City, Laguna denominated as Lot 2 of subdivision plan Pcs-12441, with an area of 4,147 square meters, more or less, covered by TCT No. T-11259^[9] of the Register of Deeds of San Pablo City (Lot 2). On December 28, 1977, Ceferino, Sr. mortgaged Lot 2 with Manila Bank for the amount of P180,000.00. The mortgage was discharged on September 16, 1984.^[10]

Prior to the discharge of the mortgage or sometime in August 1984, Lot 2 was subdivided into three (3) lots: Lot 2-A, Lot 2-B, and the subject property, Lot 2-C, resulting in the cancellation of TCT No. T-11259. Lot 2-C was registered in Ceferino, Sr.'s name in accordance with his letter^[11] dated August 29, 1984 requesting the Register of Deeds of San Pablo City to register Lot 2-C in his name. Thus, TCT No. T-22749^[12] was issued covering the said parcel under the name of Ceferino, Sr., married to Estela.^[13]

In June 1996, Maristela discovered that TCT No. T-22749 covering Lot 2-C had been cancelled and in its stead, TCT No. T-41382 was issued in the name of petitioners. It appears that by virtue of a notarized Deed of Absolute Sale^[14] (Deed of Sale) dated January 16, 1978, Ceferino, Sr., with the consent of Estela, allegedly sold "a portion of lot 2 of the consolidation subd. plan (LRC) Pcs-12441"^[15] to petitioners for a consideration of P150,000.00. The Deed of Sale was registered with the Register of Deeds of San Pablo City only on February 5, 1996.^[16]

This prompted respondents to file a criminal case for falsification of public document against petitioners, entitled "People of the Philippines v. Damaso T. Ambray and Ceferino T. Ambray" and docketed as Criminal Case No. 39153 (falsification case) before the Municipal Trial Court in Cities (MTCC) of San Pablo City. In a Decision^[17] dated October 30, 2000, the MTCC acquitted petitioners of the charge for failure of the prosecution to prove their guilt beyond reasonable doubt.

Thereafter, respondents filed the instant complaint^[18] for annulment of title, reconveyance, and damages against petitioners and Estela (defendants), docketed as Civil Case No. SP-5831(01), alleging that TCT No. T-41382 and the Deed of Sale were null and void because the signatures of Ceferino, Sr. and Estela thereon were forgeries.

In a motion to dismiss,^[19] defendants claimed that the issue on the authenticity of the signatures of Ceferino, Sr. and Estela on the Deed of Sale had already been passed upon in the falsification case where petitioners were eventually acquitted; hence, the matter was res judicata. In an Order^[20] dated June 6, 2002, the RTC granted the motion and dismissed the case on said ground.

On appeal,^[21] however, the CA reversed the said disposition in a Decision^[22] dated September 29, 2005 in CA-G.R. CV No. 75507, finding that res judicata does not apply. Thus, it remanded the case to the RTC for further proceedings.

Before the RTC, petitioners filed their answer^[23] and disclosed the death of their co-defendant and mother, Estela, who passed away on August 15, 2002.^[24] By way of defense, they averred, inter alia, that respondents were aware of the conveyance of Lot 2-C to them through the Deed of Sale. They also claimed that respondents' action has prescribed, and maintained that it was barred by prior judgment and res judicata.^[25]

Subsequently, citing an Affidavit^[26] dated February 18, 2008 executed by Ma. Fe Luisa, the rest of the respondents moved^[27] that she be dropped as a plaintiff, which the RTC granted.^[28] Thereafter, she was ordered^[29] impleaded as a party-defendant in respondents' supplemental complaint. Later, she adopted^[30] petitioners' answer with counterclaim in response thereto.

The RTC Ruling

In a Decision^[31] dated June 11, 2010, the RTC nullified the Deed of Sale as well as TCT No. T-41382 in the name of petitioners and rendered judgment in favor of respondents as follows:

a. Declaring Lot 2-C, Psd-04-009554, covered by Transfer Certificate of Title No. T-41382, as common property of the Heirs of Ceferino Ambray, Sr. and Estela Trias, to be divided equally among the heirs;

b. Declaring as null and void the Deed of Absolute Sale dated January 16, 1978, purportedly executed between Ceferino Ambray and Estela Trias, as vendors, and Damaso T. Ambray and Ceferino Ambray, Jr., as vendees, of the portion of Lot 2, Pcs-12441, covered by Transfer Certificate of Title No. T-11259;

c. Declaring as null and void Transfer Certificate of Title No. T- 41382 in the name of Damaso T. Ambray, married to Mary Ann Loyola, and Ceferino T. Ambray, Jr.;

d. Directing the defendants Damaso T. Ambray and Ceferino T. Ambray, Jr. to reconvey Lot 2-C, Psd-04-009554 covered by Transfer Certificate of Title No. T-41382 to the co-ownership of the Heirs of Ceferino Ambray, Sr. and Estela Trias, for distribution in equal shares among the said heirs; and

e. Directing the Register of Deeds of San Pablo City, to cancel Transfer Certificate of Title No. T-41382 in the name of Damaso T. Ambray and Ceferino Ambray, Sr., and cause the issuance of a new Transfer Certificate of Title, in the name of the Heirs of Ceferino Ambray, Sr. and Estela Trias.

The RTC found that respondents were able to prove, by a preponderance of evidence, that the Deed of Sale executed by Ceferino, Sr. conveying Lot 2-C in favor of petitioners was spurious and of dubious origin.^[32] It held that at the time of its execution in 1978, Ceferino, Sr. could not have sold a specific portion of Lot 2 to petitioners, considering that it was subdivided only in 1984. Moreover, after the subdivision of Lot 2 in 1984, Ceferino, Sr. requested the Register of Deeds of San Pablo City to register Lot 2-C in his name, which he would not have done had he already sold Lot 2-C to petitioners.^[33]

Furthermore, Ceferino, Sr. leased Lot 2-C to MB Finance Corporation from 1986 to 1989 in his capacity as the owner of the subject property. Subsequent thereto, as administrator of Ceferino, Sr.'s properties upon the latter's death, Damaso executed a contract renewing the lease of Lot 2-C to MB Finance Corporation. The RTC opined that the foregoing facts militate against petitioners' purported ownership of Lot 2-C pursuant to the Deed of Sale.^[34]

Finally, when confronted with the belated registration of the Deed of Sale in 1996, petitioners could only offer the excuse that their mother, Estela, kept the copy thereof until she became sickly and finally gave the same to Damaso. The RTC declared the same to be a mere afterthought.^[35]

With respect to the issue of forgery of the signatures of Ceferino, Sr. and Estela on the subject Deed of Sale, the RTC took note of the CA's opinion in CA-G.R. CV No. 75507 that the MTCC, in the falsification case, made no categorical finding as to the existence of falsification. Instead, the MTCC merely concluded that the prosecution failed to establish petitioners' participation in the alleged falsification.^[36]

Petitioners and respondents separately appealed^[37] to the CA. Petitioners imputed error upon the RTC in declaring null and void the subject Deed of Sale and TCT No. T-41382,^[38] while respondents questioned the RTC's refusal to grant damages and attorney's fees in their favor.^[39]

The CA Ruling

In a Decision^[40] dated April 25, 2013, the CA affirmed the RTC Decision and found that respondents were able to sufficiently discharge the required burden of proof that the subject Deed of Sale is spurious.

The CA also denied the award of moral damages for lack of factual basis. Consequently, without moral damages, it found that no exemplary damages may be given.^[41] Finally, the CA held that the award of attorney's fees was not warranted under the circumstances of the case, the same being an exception and not the general rule.^[42]

Both petitioners^[43] and respondents^[44] moved for reconsideration of the CA's Decision, which were denied in a Resolution^[45] dated September 24, 2014; hence, this petition.

The Issue Before the Court

The sole issue for the Court's resolution is whether or not the CA erred in affirming the RTC's nullification of the Deed of Sale dated January 16, 1978 and TCT No. T-41382 covering Lot 2-C in the name of petitioners.

The Court's Ruling

The petition is meritorious.

At the outset, it should be pointed out that, as a general rule, a re-examination of factual findings cannot be done by the Court acting on a petition for review on certiorari because it is not a trier of facts and only reviews questions of law.^[46] This rule, however, admits of certain exceptions, namely: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.^[47] Finding a confluence of certain exceptions in this case, the general rule that only legal issues may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court does not apply, and the Court retains the authority to pass upon the evidence presented and draw conclusions therefrom.^[48]

At the core of the present controversy is the validity of the Deed of Sale, the execution of which purportedly conveyed Lot 2-C in favor of petitioners. To gauge the veracity thereof, it is imperative to pass upon the genuineness of the signatures of the seller, Ceferino, Sr., and his wife, Estela, who gave her consent to the sale, as appearing thereon, which respondents, in the present complaint, assert to be forgeries.

As a rule, forgery cannot be presumed and must be proved by clear, positive and convincing evidence, and the burden of proof lies on the party alleging forgery. One who alleges forgery has the burden to establish his case by a preponderance of evidence, or evidence which is of greater weight or more convincing than that which is offered in opposition to it. The fact of forgery can only be established by a comparison between the alleged forged signature and the authentic and genuine signature of the person whose signature is theorized to have been forged.^[49]

Under Rule 132, Section 22 of the Rules of Court, the genuineness of handwriting may be proved in the following manner: (1) by any witness who believes it to be the handwriting of such person because he has seen the person write; or he has seen writing purporting to be his upon which the witness has acted or been charged; (2) by a comparison, made by the witness or the court, with writings admitted or treated as genuine by the party, against whom the evidence is offered, or proved to be genuine to the satisfaction of the judge.^[50] Corollary thereto, jurisprudence states that the presumption of validity and regularity prevails over allegations of forgery and fraud. As against direct evidence consisting of the testimony of a witness who was physically present at the signing of the contract and who had personal knowledge thereof, the testimony of an expert witness constitutes indirect or circumstantial evidence at best.^[51]

In this case, the only direct evidence presented by respondents to prove their allegation of forgery is Questioned Documents Report No. 266-397^[52] dated March 24, 1997 issued by National Bureau of Investigation (NBI) Document Examiner II Antonio R. Magbojos (Magbojos), stating that the signatures of Ceferino, Sr. and Estela on the Deed of Sale, when compared to standard sample signatures, are not written by one and the same person.

In refutation, petitioners offered in evidence, inter alia, the testimony of their mother, Estela, in the falsification case where petitioners were previously acquitted. In the course thereof, she identified^[53] the signatures on the Deed of Sale as hers and Ceferino, Sr.'s, which was fully corroborated^[54] by Atty. Zosimo Tanalega (Atty. Tanalega), the notary public who notarized the subject Deed of Sale and was present at the time the Ambray spouses affixed their signatures thereon.

Between the Questioned Documents Report presented by respondents and the testimony given by Estela in the falsification case in support of petitioners' defense, the Court finds greater evidentiary weight in favor of the latter. Hence, respondent's complaint for annulment of title, reconveyance, and damages in Civil Case No. SP-5831(01) should be dismissed.

While the principle of res judicata in the concept of conclusiveness of judgment, as espoused by petitioners,^[55] is of doubtful application in this case - considering that the MTCC, in the falsification case, failed to categorically pronounce that the Deed of Sale was not falsified and merely concluded that petitioners had no participation in any alleged falsification - the Court nonetheless observes that petitioners, through the testimony of Estela thereat, were able to establish the genuineness and due execution of the subject Deed of Sale which effectively conveyed title over Lot 2-C to them. Estela's testimony constitutes direct evidence of the authenticity of the signatures on the Deed of Sale, having personal knowledge thereof, which undeniably prevails over the written findings of a purported handwriting expert that can only be considered indirect or circumstantial evidence.

Notably, the admissibility of Estela's former testimony in the present case finds basis in Section 47, Rule 130 of the Rules on Evidence or the "rule on former testimony" which provides:

Section 47. Testimony or deposition at a former proceeding. - The testimony or deposition of a witness deceased or unable to testify, given in a former case or proceeding, judicial or administrative, involving the same parties and subject matter, may be given in evidence against the adverse party who had the opportunity to cross-examine him.

Case law holds that for the said rule to apply, the following requisites must be satisfied: (a) the witness is dead or unable to testify; (b) his testimony or deposition was given in a former case or proceeding, judicial or administrative, between the same parties or those representing the same interests; (c) the former case involved the same subject as that in the present case, although on different causes of action; (d) the issue testified to by the witness in the former trial is the same issue involved in the present case and (e) the adverse party had an opportunity to cross-examine the witness in the former case.^[56] The reasons for the admissibility of testimony taken at a former trial or proceeding are the necessity for the testimony and its trustworthiness. However, before the former testimony can be introduced in evidence, the proponent must first lay the proper predicate therefor, i.e., the party must establish the basis for the admission of testimony in the realm of admissible evidence.^[57]

Records show that Estela died during the pendency of these proceedings before the RTC or on August 15, 2002. Her death transpired before the presentation of the parties' evidence could ensue. However, she was able to testify on direct and cross-examination in the falsification case and affirmed that the alleged forged signatures appearing on the Deed of Sale were, indeed, hers and her deceased husband, Ceferino, Sr.'s. The parties in the falsification case involved respondents and petitioners herein, and the subject matter therein and in this case are one and the same, i.e., the genuineness and authenticity of the signatures of Ceferino, Sr. and Estela.

Clearly, the former testimony of Estela in the falsification case, being admissible in evidence in these proceedings, deserves significant consideration. She gave positive testimony that it was Ceferino, Sr. himself who signed the Deed of Sale that conveyed Lot 2-C to petitioners. She likewise verified her signature thereon. By virtue of these declarations, she confirmed the genuineness and authenticity of the questioned signatures. Thus, it follows that the Deed of Sale itself is valid and duly executed, contrary to the finding of the RTC, as affirmed by the CA, that it was of spurious nature.

Further lending credence to the validity of the Deed of Sale is the well-settled principle that a duly notarized contract enjoys the prima facie presumption of authenticity and due execution as well as the full faith and credence attached to a public instrument. To overturn this legal presumption, evidence must be clear, convincing, and more than merely preponderant to establish that there was forgery that gave rise to a spurious contract.^[58]

Hence, for the above-state reasons, whatever inferences the RTC had observed tending to defeat the existence of a valid sale in favor of petitioners are rendered inconsequential.

In particular, the RTC noted, and found it puzzling, that the Deed of Sale did not specifically mention the exact area that was being sold to petitioners, disposing only of "a portion of lot 2" without specifying the metes and bounds thereof. As such, the RTC concluded that Ceferino, Sr. could not have sold a specific portion of Lot 2 to petitioners, having been subdivided only in 1984. However, Article 1463 of the Civil Code expressly states that "[t]he sole owner of a thing may sell an undivided interest therein." As Ceferino, Sr. was the sole owner of the original Lot 2 from whence came Lot 2-C, he is therefore allowed by law to convey or sell an unspecified portion thereof. Hence, the disposition of Lot 2-C to petitioners, a portion of Lot 2 yet to be subdivided in 1978, was therefore valid.

That Ceferino, Sr. requested the registration of the title of Lot 2-C in his name in 1984, while the property was supposed to have already been sold to petitioners in 1978, was likewise fully explained during trial. Damaso clarified^[59] that their parents were apprehensive that he and Ceferino might mortgage or squander the property while they were still alive. Moreover, despite knowledge of the sale, they did not demand for its immediate registration because during their father's lifetime, they never questioned his decisions. This further explains why, despite the disposition in petitioners' favor, it was Ceferino, Sr. himself who leased Lot 2-C to third parties, which Damaso renewed in his father's name after the latter's death. The delay in the transfer of the title over Lot 2-C to petitioners was also occasioned by the fact that Estela kept the Deed of Sale in her custody and gave it to petitioners only later on, by reason of her poor health.^[60] Be that as it may, and to reiterate, the delay in the registration of the sale in favor of petitioners neither affects nor invalidates the same, in light of the authenticity of the Deed of Sale itself.

In fine, the CA and the RTC both erred in finding that the Deed of Sale was of spurious origin. The authenticity and due execution of the Deed of Sale must be upheld against the assumptions made by the RTC in its Decision. Accordingly, TCT No. T-41382 covering Lot 2-C in the name of petitioners remain valid.

WHEREFORE, the petition is GRANTED. The assailed April 25, 2013 Decision and the September 24, 2013 Resolution of the Court of Appeals in CA-G.R. CV No. 95606 are hereby REVERSED and SET ASIDE. The instant complaint for annulment of title, reconveyance, and damages is DISMISSED.

SO ORDERED.

Sereno, C. J., on official leave.
Leonardo-De Castro,^*** (Acting Chairperson), Bersamin, and Caguioa, JJ., concur.

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^* Estela T. Ambray had already died on August 15, 2002. See rollo p. 9.

^*** Per Special Order No. 2358 dated June 28, 2016.

^[1] Rollo, pp. 7-29.

^[2] Id. at 32-40. Penned by Associate Justice Amelita G. Tolentino with Associate Justices Ramon R. Garcia and Danton Q. Bueser concurring.

^[3] Id. at 42-43. Penned by Associate Justice Amelita G. Tolentino with Associate Justices Ramon R. Garcia and Manuel M. Barrios concurring.

^[4] Id. at 44-67. Penned by Judge Agripino G. Morga.

^[5] Folder of Exhibits, p. 6, including dorsal portion thereof.

^[6] Sylvia A. Tsourous died during the pendency of the case before the RTC and was substituted by her heirs, namely: Kristina Tsourous-Reyes, Mark Tsourous, Keith Tsourous, and Steven Tsourous. See records, Vol. 1, pp. 156-159 and 163-164.

^[7] Also referred to in the records as "Ma. Luisa Fe" During the proceedings before the RTC, she withdrew as plaintiff, and the complaint was amended to implead her as co-defendant of Damaso and Ceferino, Jr. Id. at 181-186.

^[8] See id. at 4.

^[9] Folder of Exhibits, pp. 2-3.

^[10] Rollo, p. 34.

^[11] Folder of Exhibits, p. 4.

^[12] Folder of Exhibits, p. 5, including dorsal portion thereof.

^[13] Rollo, p. 34.

^[14] Id. at 79-80.

^[15] Id. at 79.

^[16] Id. at 34-35.

^[17] Id. at 81-86. Penned by Judge Iluminado C. Monzon.

^[18] Records, Vol. I, pp. 3-10.

^[19] Id. at 47-53.

^[20] Id. at 99-102. Penned by Judge Zorayda Herradura-Salcedo.

^[21] See Notice of Appeal dated June 19, 2002; id. at 103.

^[22] Id. at 105-117. Penned by Associate Justice Mariflor P. Punzalan Castillo with Associate Justices Elvi John S. Asuncion and Mariano C. Del Castillo (now a member of this Court).

^[23] Id. at 123-128.

^[24] See Order dated January 30, 2007; id. at 145-146.

^[25] Id. at 124.

^[26] Id. at 184-185.

^[27] Id. at 181-186.

^[28]See Order dated April 28, 2008; id. at 201-203.

^[29] Id. at 263-265.

^[30] Id. at 287.

^[31] Rollo, pp. 44-67.

^[32] Id. at 66.

^[33] Id. at 61.

^[34] Id. at 61-62.

^[35] Id. at 62.

^[36] Id. at 63-64.

^[37] CA rollo, pp. 82-106 and 136-152.

^[38] Id. at 139.

^[39] Id. at 87.

^[40] Rollo, pp. 32-40.

^[41] Id. at 38-39.

^[42] Id. at 39.

^[43] CA rollo, pp. 236-243.

^[44] Id. at 246-255.

^[45] Rollo, pp. 42-43.

^[46] See Maersk-Filipinas Crewing Inc. v. Avestruz, G.R. No. 207010, February 18, 2015, 751 SCRA 161, 171, citing Jao v. BCC Products Sales, Inc.,686 Phil. 36, 41 (2012).

^[47] New City Builders, Inc. v. NLRC, 499 Phil. 207, 212-213 (2005), citing Insular Life Assurance Company, Ltd. v. CA, G.R. No. 126850, April 28, 2004, 428 SCRA 79, 86.

^[48] Maersk-Filipinas Crewing Inc.,v. Avestruz, supra note 46, at 172.

^[49] Gepulle-Garbo v. Garabato, G.R. No. 200013, January 14, 2015, 746 SCRA 189, 198-199.

^[50] Section 22. How genuineness of handwriting proved. - The handwriting of a person may be proved by any witness who believes it to be the handwriting of such person because he has seen the person write, or has seen writing purporting to be his upon which the witness has acted or been charged, and has thus acquired knowledge of the handwriting of such person. Evidence respecting the handwriting may also be given by a comparison, made by the witness or the court, with writings admitted or treated as genuine by the party against whom the evidence is offered, or proved to be genuine to the satisfaction of the judge.

^[51] Bautista v. CA, 479 Phil. 787, 792-793 (2004), citing Vda. de Bernardo v. Restauro, 452 Phil. 745, 751-752 (2003).

^[52] Folder of Exhibits, pp. 9-10.

^[53] See Transcript of Stenographic Notes (TSN) dated September 10, 1998; rollo, pp 107-108.

^[54] Id. at 89-91.

^[55] Id. at 19-21.

^[56] Samalio v. CA, 494 Phil. 456, 463 (2005).

^[57] See Republic v. Sandiganbayan, 678 Phil. 358, 414 (2011).

^[58] Bautista v. CA, supra note 51. See also Bernardo v. Ramos, 433 Phil. 8 (2002); and Manzano v. Perez, Sr., 414 Phil. 728 (2001).

^[59] TSN, August 3, 2009, pp. 14-15.

^[60] Id. at 19-21.