CASE DIGEST: Hernandez-Nievera vs. Hernandez

G.R. No. 171165 : February 14, 2011

CAROLINA HERNANDEZ-NIEVERA, DEMETRIO P. HERNANDEZ, JR., and MARGARITA H. MALVAR, Petitioners, v. WILFREDO HERNANDEZ, HOME INSURANCE AND GUARANTY CORPORATION, PROJECT MOVERS REALTY AND DEVELOPMENT CORPORATION, MARIO P. VILLAMOR and LAND BANK OF THE PHILIPPINES, Respondents.

PERALTA, J.:


FACTS:

PMRDC entered into a Memorandum of Agreement (MOA) whereby it was given the option to buy pieces of land owned by petitioners Carolina Hernandez-Nievera (Carolina), Margarita H. Malvar (Margarita) and Demetrio P. Hernandez, Jr. (Demetrio).

Later on, PMRDC saw the need to convey additional properties to and augment the value of its Asset Pool. Thus, it entered with LBP and Demetrio – the latter purportedly acting under authority of the same special power of attorney as in the MOA – into a Deed of Assignment and Conveyance (DAC) whereby some of the lands were transferred and assigned to the Asset Pool in exchange for a number of shares of stock which supposedly had already been issued in the name and in favor of Demetrio. This essentially dispensed with the stipulated obligation of PMRDC in the MOA to pay option money should it opt to buy the properties.

PMRDC admittedly did not avail of its option to purchase the lands in Area II in the twelve months that passed after the execution of the MOA. Petitioners demanded the return of the corresponding TCTs. PMRDC stated that the TCTs could no longer be delivered back to petitioners as the covered properties had already been conveyed and assigned to the Asset Pool pursuant to the DAC.

Petitioners explained that Demetrio could not have entered into the DAC as his power of attorney was limited only to selling or mortgaging the properties and not conveying the same to the Asset Pool. Also, they asserted that the fraudulent execution of the DAC was made possible through the connivance of all the respondents.

Petitioners instituted an action before the RTC for the rescission of the MOA, as well as for the declaration of nullity of the DAC. The RTC declared the MOA to be an option contract and ordered its rescission.

However, the Court of Appeals reversed the RTC decision, saying that the allegation of forgery of Demetrio’s signature in the DAC was not established by the evidence and, hence, following the legal presumption of regularity in the execution of notarized deeds, it upheld the validity of the DAC.

ISSUE: Whether or not the CA erred in declining to rescind the MOA and declare the DAC null and void

HELD:

Petition lacks merit.

CIVIL LAW: Forgery, agency

With the execution of the DAC, PMRDC has already entered into the exercise of its option except that its obligation to deliver the option money has, by subsequent agreement embodied in the DAC, been substituted instead by the obligation to issue participation certificates in Demetrio’s name

Forgery cannot be presumed from a mere allegation but rather must be proved by clear, positive and convincing evidence by the party alleging the same. The burden to prove the allegation of forgery in this case has not been conclusively discharged by petitioners

Likewise, the power conferred on Demetrio to sell “for such price or amount” is broad enough to cover the exchange contemplated in the DAC between the properties and the corresponding corporate shares in PMRDC, with the latter replacing the cash equivalent of the option money initially agreed to be paid by PMRDC under the MOA.

Petition is DENIED. The decision of CA is affirmed.

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