Professional Documents
Culture Documents
admitted this would be difficult as she and her husband had been
estranged for many years, and were not even on speaking terms. However,
the Malana spouses assured her they would help her secure the Special
Power of Attorney.
After three days Estrella Lao returned to the Villenas together with the
Malanas with the Special Power of Attorney (SPA) signed by Domingo and
Ernesto Lao, and duly notarized. The spouses Villena relied on the said
notarized SPA, and found nothing suspicious that it was so easily obtained
by Estrella Lao only after three days, when they were in fact aware that
Estrella and Domingo Lao were estranged from each other. Villena
therefore entered into a contract of mortgage with Estrella Lao with the 808
sq.m. land as collateral.
After Estrella Lao failed to make payments on the loan, Carlos Villena
Jr. effected an extra-judicial foreclosure and sale at public auction of the
property on July 27,1981[4] and the Register of Deeds issued a new
Certificate of Title in the name of the spouses Carlos and Socorro Villena.
Domingo Lao, after being appraised of what happened to the property,
filed on April 27, 1983, with the Regional Trial Court Quezon City, Branch
76, a complaint for the annulment of the special power of attorney,
mortgage, extra-judicial foreclosure, and the cancellation TCT No. 290029
and reconveyance of title.[5]
On September 28,1992, the Regional trial Court, Branch 76, Quezon
City rendered decision the dispositive portion of which reads as follows:
WHEREFORE, in view of the foregoing, the court hereby declares null and
void the following:
1. The special power of attorney;
2. Deed of real estate mortgage;
3. The foreclosure proceedings;
4. Transfer Certificate of Title No. 290029 in the name of the Villena
spouses, and orders the Register of Deeds of Quezon City to
cancel the said title and issue a new one in favor of Domingo Lao,
Ernesto Lao, and Estrella Villones-Lao with the same participation
as appearing in TCT No. T-268732 of the Registry of Deeds of
Quyezon City, namely: Estrella Villones-Lao, 50%; Domingo Lao,
30%; and Ernesto Lao, 20%.
The Court further orders the defendants Estrella Villones-Lao, spouses
Manuel and Angelita Malana and the spouses Carlos and Socorro Patenia
Villena to pay the plaintiff, jointly and severally, the sum of P15,000.00 as
moral damages, P10,000.00 as attorneys fees, P10,000.00 as reasonable
litigation expenses and to pay the costs. Defendant Villenas are ordered to
Lao and her husband Domingo Lao had been estranged from each
other. When Estrella Lao together with the Malana spouses came to him
with the Special Power of Attorney (SPA) after only three days, this should
have put Villena in doubt as to the authenticity of the SPA, after all the rule
of commerce is caveat emptor.[11]
Petitioners further stress the fact that a reasonably prudent man would
have been surprised at the very least when Estrella Lao and the Malanas
showed up three days later with a special power of attorney signed by the
co-owners Domingo and Ernesto Lao. While Estrella Lao was a co-owner
of the property, she was nevertheless a stranger with regard to the sale or
disposition of the shares of the other co-owners. Yet, respondent Villena
never even called or inform the co-owners of the mortgage, even if he knew
their addresses. He went to the subject property once and made no other
efforts to contact or confirm the identities of Domingo and Ernesto Lao.
According to petitioners, the Court of Appeals disregarded the
requirement of ordinary prudence and diligence in the case simply because
of the notarized special power of attorney. And as such the court binds
petitioners to an unauthorized transaction entered into by his wife with
regard to conjugal properties.
The ruling of the Court of Appeals that petitioners were given by the
Villenas several opportunities to redeem the property finds no support in
the factual records of the case. According to the petitioners they only met
the Villenas after title was already consolidated in the name of the
Villenas. Further, it would be utterly absurd for petitioners to ratify the illegal
and unauthorized acts of Estrella Lao by redeeming the property foreclosed
on the strength of their forged signatures.
The petitioners argue that the findings of the Court of Appeals on their
negligence in giving Estrella Lao a copy of the title of the property is without
basis. As a registered co-owner, Estrella Lao was entitled to the possession
of an owners copy. In fact under the provisions of P.D. 1529, a separate
duplicate may be issued to each co-owner. Hence, there was no
responsibility upon anyone to deny Estrella Lao possession of said title.
Petitioners raise in issue the fact that during the proceedings at the
lower court it was proved that the signatures of the petitioners, Domingo
and Ermesto Lao were forged. Emmanuel de Guzman, of the National
Bureau of Investigation testified that upon examination and verification of
the questioned signatures of Domingo and Ernesto Lao, by comparing the
sample signatures and the signatures appearing on the special power of
attorney, he concluded that the signatures do not match.Therefore, the
signatures of Domingo and Ernesto Lao were forgeries. [12]
Lao and her son Ernesto Lao. The case filed by Estrella Lao against
spouses Mannuel and Angelita Malana, Carlos Villena, and Atty. Rodolfo G.
Palatao (notary public who notarized the special power of attorney, now
Associate Justice, Sandiganbayan) was dismissed for lack of merit.
We find the petition impressed with merit.
While this Court has held in several cases that a notarized instrument is
admissible in evidence without further proof of its due execution and is
conclusive as to the truthfulness of its contents, this rule is nonetheless not
absolute but may be rebutted by clear and convincing evidence to the
contrary.[16] Such evidence, as the Court sees it, has been sufficiently
established in this case.
The respondents do not deny the sequence of events established on
record that:
1. Estrella Lao was in extreme need of money and was looking in
the neighborhood of Nepa Q Mart for a quick loan;
2. It was the spouses Malana who went to her house to inquire if
she was still interested in a loan. In fact , they had with them the
folder given by Estrella Lao to one Cora, containing important
documents pertaining to the property in question;
3. The Malanas informed her they knew of a financier (referring to
Mr. Villena) who could provide her with the loan, clearly implying
that they had previous dealings with Mr. Villena. This is borne out
by the fact that prior to the actual meeting of Estrella Lao and Mr.
Villena, the Malanas already went to see Mr. Villena about the
prospective transaction. Villena admitted that he knew the
Malanas and that the Malanas approached him to be a lender; [17]
4. The Malanas were not agents of Estrella Lao. They represented
themselves to be official agents of Mr. Villena; [18] Mr. Villena upon
introduction to Estrella Kao learned important facts like: (a) the
separation between her and her husband Domingo Lao; [19] (b) the
property was in the name of the spouses Lao and Ernesto Lao,
Domingos son by his first marriage; (c) that they were residing in
Metro Manila;
5. Villena informed Estrella Lao of the necessity of a power of
attorney;[20] to which she answered that it may not be possible for
her to get one as she and her husband were not on speaking
terms;
6. The Malanas assured her that they would do it for her;
7. Their participation in the transaction extended far beyond being
mere witnesses;
8. Villena was aware of this and was fully forewarned of what was
happening;
9. The signature on the special power of attorney were poor
imitations of the real signatures of the petitioners, proof of an
attempt to make them appear as genuine;
10. Estrella Lao could not be expected to be involved in the
mechanics of executing the forged power of attorney. However,
she could have furnished the other respondents with sample
signatures of petitioners and the Malanas, causing the execution
of the documents in her possession;
11. It was proved that the signatures were forgeries [21]
The events show a pattern that leads this Court to conclude that the
spouses Villena and Malana were business partners in credit
financing. The Villenas were the financier while the Malanas served as their
brokers or agents, who look for clients, in this case, Estrella Lao.
We agree with the trial court that Villenas feigned innocence of
the flawed character of the power of attorney is exposed not only by the
above circumstances, but bolstered even by the fact that as a legitimate
businessman he is expected to be well-informed of matters dealing with
estranged wife involving a conjugal property. Why should a husband and
his son execute a power of attorney in favor of the separated wife and
stepmother when they were all residing in Metro Manila. [22]
It is therefore without doubt that the special power of attorney is a
forgery. It can not be a basis of a valid mortgage contract, its subsequent
foreclosure and the consolidation of title in favor of the spouses Villena.
A holder in bad faith of a certificate of title is not entitled to the
protection of the law, for the law can not be used as a shield for fraud. [23]
IN VIEW OF THE FOREGOING, the decision of the Court of Appeals in
CA G. R. CV No. 42174 is hereby REVERSED, and that of the trial court is
REVIVED and AFFIRMED.
No costs.
SO ORDERED.
Davide, Jr., C.J., Melo, Kapunan, and Ynares-Santiago, JJ., concur.
[1]
Court of Appeals Rollo, CA-G.R. CV No. 42174, Decision prom. July 11,
1996, penned by Justice Maximiano G. Asuncion, concurred in by
Associate Justices Salome A. Montoya and Godardo A. Jacinto, pp. 379387.
[2]
SECOND DIVISION
[G.R. No. 102737. August 21, 1996]
FRANCISCO A. VELOSO, petitioner, vs. COURT OF APPEALS,
AGLALOMA B. ESCARIO, assisted by her husband GREGORIO
L. ESCARIO, the REGISTER OF DEEDS FOR THE CITY OF
MANILA, respondents.
DECISION
TORRES, JR., J.:
This petition for review assails the decision of the Court of Appeals,
dated July 29, 1991, the dispositive portion of which reads:
WHEREFORE, the decision appealed from is hereby AFFIRMED IN
TOTO. Costs against appellant.[1]
The following are the antecedent facts:
Petitioner Francisco Veloso was the owner of a parcel of land situated in
the district of Tondo, Manila, with an area of one hundred seventy seven
(177) square meters and covered by Transfer Certificate of Title No. 49138
issued by the Registry of Deeds of Manila. [2] The title was registered in the
name of Francisco A. Veloso, single, [3]on October 4, 1957.[4] The said title
was subsequently canceled and a new one, Transfer Certificate of Title No.
180685, was issued in the name of Aglaloma B. Escario, married to
Gregorio L. Escario, on May 24, 1988.[5]
On August 24, 1988, petitioner Veloso filed an action for annulment of
documents, reconveyance of property with damages and preliminary
injunction and/or restraining order. The complaint, docketed as Civil Case
No. 88-45926, was raffled to the Regional Trial Court, Branch 45,
Manila. Petitioner alleged therein that he was the absolute owner of the
subject property and he never authorized anybody, not even his wife, to sell
it. He alleged that he was in possession of the title but when his wife, Irma,
left for abroad, he found out that his copy was missing. He then verified
with the Registry of Deeds of Manila and there he discovered that his title
was already canceled in favor of defendant Aglaloma Escario. The transfer
of property was supported by a General Power of Attorney [6] dated
November 29, 1985 and Deed of Absolute Sale, dated November 2, 1987,
executed by Irma Veloso, wife of the petitioner and appearing as his
attorney-in-fact, and defendant Aglaloma Escario. [7] Petitioner Veloso,
however, denied having executed the power of attorney and alleged that
his signature was falsified. He also denied having seen or even known
Rosemarie Reyes and Imelda Santos, the supposed witnesses in the
execution of the power of attorney. He vehemently denied having met or
transacted with the defendant. Thus, he contended that the sale of the
property, and the subsequent transfer thereof, were null and void. Petitioner
Veloso, therefore, prayed that a temporary restraining order be issued to
prevent the transfer of the subject property; that the General Power of
Attorney, the Deed of Absolute Sale and the Transfer Certificate of Title No.
180685 be annulled; and the subject property be reconveyed to him.
Defendant Aglaloma Escario in her answer alleged that she was a
buyer in good faith and denied any knowledge of the alleged
irregularity. She allegedly relied on the general power of attorney of Irma
Veloso which was sufficient in form and substance and was duly
notarized. She contended that plaintiff (herein petitioner), had no cause of
action against her. In seeking for the declaration of nullity of the documents,
the real party in interest was Irma Veloso, the wife of the plaintiff. She
should have been impleaded in the case. In fact, Plaintiffs cause of action
should have been against his wife, Irma. Consequently, defendant Escario
prayed for the dismissal of the complaint and the payment to her of
damages.[8]
Pre-trial was conducted. The sole issue to be resolved by the trial court
was whether or not there was a valid sale of the subject property.[9]
During the trial, plaintiff (herein petitioner) Francisco Veloso testified that
he acquired the subject property from the Philippine Building Corporation,
as evidenced by a Deed of Sale dated October 1, 1957. [10] He married Irma
Lazatin on January 20, 1962. [11] Hence, the property did not belong to their
conjugal partnership. Plaintiff further asserted that he did not sign the
power of attorney and as proof that his signature was falsified, he
presented Allied Bank Checks Nos. 16634640, 16634641 and 16634643,
which allegedly bore his genuine signature.
Witness for the plaintiff Atty. Julian G. Tubig denied any participation in
the execution of the general power of attorney. He attested that he did not
sign thereon, and the same was never entered in his Notarial Register on
November 29, 1985.
In the decision of the trial court dated March 9, 1990,[12] defendant
Aglaloma Escaro was adjudged the lawful owner of the property as she
was deemed an innocent purchaser for value. The assailed general power
of attorney was held to be valid and sufficient for the purpose. The trial
court ruled that there was no need for a special power of attorney when the
special power was already mentioned in the general one. It also declared
that plaintiff failed to substantiate his allegation of fraud. The court also
stressed that plaintiff was not entirely blameless for although he admitted to
be the only person who had access to the title and other important
documents, his wife was still able to possess the copy. Citing Section 55 of
Act 496, the court held that Irmas possession and production of the
certificate of title was deemed a conclusive authority from the plaintiff to the
Register of Deeds to enter a new certificate. Then applying the principle of
equitable estoppel, plaintiff was held to bear the loss for it was he who
made the wrong possible. Thus:
WHEREFORE, the Court finds for the defendants and against plaintiffa. declaring that there was a valid sale of the subject property in favor of
the defendant;
b. denying all other claims of the parties for want of legal and factual basis.
Without pronouncement as to costs.
SO ORDERED.
Not satisfied with the decision, petitioner Veloso filed his appeal with the
Court of Appeals. The respondent court affirmed in toto the findings of the
trial court.
Hence, this petition for review before us.
This petition for review was initially dismissed for failure to submit an
affidavit of service of a copy of the petition on the counsel for private
respondent.[13] A motion for reconsideration of the resolution was filed but it
was denied in a resolution dated March 30, 1992. [14] A second motion for
reconsideration was filed and in a resolution dated Aug. 3, 1992, the motion
was granted and the petition for review was reinstated. [15]
A supplemental petition was filed on October 9, 1992 with the following
assignment of errors:
I
The Court of Appeals committed a grave error in not finding that the forgery
of the power of attorney (Exh. C) had been adequately proven, despite the
preponderant evidence, and in doing so, it has so far departed from the
applicable provisions of law and the decisions of this Honorable Court, as
to warrant the grant of this petition for review on certiorari.
II
There are principles of justice and equity that warrant a review of the
decision.
III
The Court of Appeals erred in affirming the decision of the trial court which
misapplied the principle of equitable estoppel since the petitioner did not
fail in his duty of observing due diligence in the safekeeping of the title to
the property.
We find petitioners contentions not meritorious.
An examination of the records showed that the assailed power of
attorney was valid and regular on its face. It was notarized and as such, it
carries the evidentiary weight conferred upon it with respect to its due
execution. While it is true that it was denominated as a general power of
attorney, a perusal thereof revealed that it stated an authority to sell, to wit:
2. To buy or sell, hire or lease, mortgage or otherwise hypothecate lands,
tenements and hereditaments or other forms of real property, more
specifically TCT No. 49138, upon such terms and conditions and under
such covenants as my said attorney shall deem fit and proper.[16]
Thus, there was no need to execute a separate and special power of
attorney since the general power of attorney had expressly authorized the
agent or attorney in fact the power to sell the subject property. The special
power of attorney can be included in the general power when it is specified
therein the act or transaction for which the special power is required.
The general power of attorney was accepted by the Register of Deeds
when the title to the subject property was canceled and transferred in the
name of private respondent. In LRC Consulta No. 123, Register of Deeds
of Albay, Nov. 10, 1956, it stated that:
Whether the instrument be denominated as general power of attorney or
special power of attorney, what matters is the extent of the power or
powers contemplated upon the agent or attorney in fact. If the power is
couched in general terms, then such power cannot go beyond acts of
administration. However, where the power to sell is specific, it not being
merely implied, much less couched in general terms, there can not be any
doubt that the attorney in fact may execute a valid sale. An instrument may
be captioned as special power of attorney but if the powers granted are
couched in general terms without mentioning any specific power to sell or
mortgage or to do other specific acts of strict dominion, then in that case
only acts of administration may be deemed conferred.
Petitioner contends that his signature on the power of attorney was
falsified. He also alleges that the same was not duly notarized for as
testified by Atty. Tubig himself, he did not sign thereon nor was it ever
recorded in his notarial register. To bolster his argument, petitioner had
presented checks, marriage certificate and his residence certificate to
prove his alleged genuine signature which when compared to the signature
in the power of attorney, showed some difference.
We found, however, that the basis presented by the petitioner was
inadequate to sustain his allegation of forgery. Mere variance of the
signatures cannot be considered as conclusive proof that the same were
forged. Forgery cannot be presumed.[17] Petitioner, however, failed to prove
his allegation and simply relied on the apparent difference of the
signatures. His denial had not established that the signature on the power
of attorney was not his.
We agree with the conclusion of the lower court that private respondent
was an innocent purchaser for value. Respondent Aglaloma relied on the
power of attorney presented by petitioners wife, Irma. Being the wife of the
owner and having with her the title of the property, there was no reason for
the private respondent not to believe in her authority. Moreover, the power
of attorney was notarized and as such, carried with it the presumption of its
due execution. Thus, having had no inkling on any irregularity and having
no participation thereof, private respondent was a buyer in good faith. It has
been consistently held that a purchaser in good faith is one who buys
property of another, without notice that some other person has a right to, or
interest in such property and pays a full and fair price for the same, at the
time of such purchase, or before he has notice of the claim or interest of
some other person in the property.[18]
Documents acknowledged before a notary public have the evidentiary
weight with respect to their due execution. The questioned power of
attorney and deed of sale, were notarized and therefore, presumed to be
valid and duly executed. Atty. Tubig denied having notarized the said
documents and alleged that his signature had also been falsified. He
presented samples of his signature to prove his contention. Forgery should
be proved by clear and convincing evidence and whoever alleges it has the
burden of proving the same. Just like the petitioner, witness Atty. Tubig
merely pointed out that his signature was different from that in the power of
attorney and deed of sale. There had never been an accurate examination
of the signature, even that of the petitioner. To determine forgery, it was
held in Cesar vs. Sandiganbayan[19](quoting Osborn, The Problem of Proof)
that:
The process of identification, therefore, must include the determination of
the extent, kind, and significance of this resemblance as well as of the
variation. It then becomes necessary to determine whether the variation is
due to the operation of a different personality, or is only the expected and
inevitable variation found in the genuine writing of the same writer. It is also
necessary to decide whether the resemblance is the result of a more or
less skillful imitation, or is the habitual and characteristic resemblance
which naturally appears in a genuine writing. When these two questions are
correctly answered the whole problem of identification is solved.
Even granting for the sake of argument, that the petitioners signature
was falsified and consequently, the power of attorney and the deed of sale
were null and void, such fact would not revoke the title subsequently issued
[1]
Decision, Rollo, p.59, penned by J.N. Lapea, Jr. and concurred in by J.R.
Pronove and J.C. Santiago.
[2]
Exh. A, Annex A, Records, p.12 and 155.
[3]
Exh. A-1, Ibid.
[4]
Exh. A-2, Ibid.
[5]
Exh. B, Annex B, Exh. 3, Records, pp. 15 and 157.
[6]
Records, pp. 96-97.
[7]
x------------------------------------------------x
DECISION
AUSTRIA-MARTINEZ, J.:
To establish his status as a buyer for value in good faith, a person
dealing with land registered in the name of and occupied by the seller need
only show that he relied on the face of the sellers certificate of title.[1] But for
a person dealing with land registered in the name of and occupied by the
seller whose capacity to sell is restricted, such as by Articles 166 [2] and
173[3] of the Civil Code or Article 124[4] of the Family Code, he must show
that he inquired into the latters capacity to sell in order to establish himself
as a buyer for value in good faith.[5] The extent of his inquiry depends on
the proof of capacity of the seller. If the proof of capacity consists of a
special power of attorney duly notarized, mere inspection of the face
of such public document already constitutes sufficient inquiry. If no such
special power of attorney is provided or there is one but there appear flaws
in its notarial acknowledgment mere inspection of the document will not
do; the buyer must show that his investigation went beyond the document
and into the circumstances of its execution.
Appealed by Petition for Review on Certiorari under Rule 45 of the
Rules of Court are the November 21, 2001 Decision [6] of the Court of
Appeals (CA)in CA-G.R. CV No. 48767[7] which affirmed in toto the
January 10, 1995 Decision of the Regional Trial Court (RTC) in Civil Case
No. 3091-V-89, and the February 27, 2003 CA Resolution which denied the
motion for reconsideration.
Civil Case No. 3091-V-89 is a Complaint for Annulment of Deed of
Absolute Sale and Transfer Certificate of Title (TCT) No. V-2765,
Reconveyance and Damages filed with the RTC, Branch 171, Valenzuela,
Metro Manila by Berlina F. Silva (Berlina), through Hermes Dorado
(Dorado) as Attorney-in-Fact, against Spouses Claro and Nida Bautista
(Spouses Bautista). Spouses Bautista filed their Answer[8] and a Third-Party
Complaint against Berlinas husband, Pedro M. Silva (Pedro). [9] In an Order
dated August 6, 1991, the RTC declared third-party defendant Pedro in
default for failure to file an answer to the Third-Party Complaint. [10]
The undisputed facts of the case, as found by the RTC, are as
follows:
1.
That Transfer Certificate of Title No. B-37189 of the
Registry of Deeds for xxx Metro Manila District III over a parcel
of land (Lot 42, Block 10, of the subdivision plan (LRC) Psd210217, Sheet 2, being a portion of Lot 903, Malinta Estate,
LRC Record No. 5941) situated in xxx Barrio of Parada,
Valenzuela, Metro Manila, containing an area of 216 square
meters, more or less, was registered in the names of Spouses
Berlina F. Silva and Pedro M. Silva on August 14, 1980;
2.
That on March 3, 1988, Pedro M. Silva, for himself
and as attorney-in-fact of his wife Berlina F. Silva, thru a Special
Power of Attorney purportedly executed on November 18, 1987
by Berlina F. Silva in his favor, signed and executed a Deed of
Absolute Sale over the said parcel of land covered by Transfer
Certificate of Title No. B-37189 in favor of defendants-spouses
Claro Bautista and Nida Bautista; and
3.
That as a consequence, Transfer Certificate of Title
No. 37189 was cancelled and in lieu thereof, Transfer
Certificate of Title No. V-2765 of the Registry of Deeds for the
Valenzuela Branch was issued in the names of Spouses Claro
Bautista and Nida Bautista on March 4, 1988. [11]
Based on the evidence presented, the RTC also found that the
signature appearing on the Special Power of Attorney (SPA) as that of
Berlina Silva is a forgery, and that consequently the Deed of Absolute Sale
executed by Pedro in favor of Spouses Bautista is not authorized by
Berlina.[12]
The RTC rendered judgment on January 10, 1995, the decretal
portion of which reads:
WHEREFORE, Judgment is hereby rendered:
1. Declaring the Deed of Absolute Sale dated March 3,
1988 executed by Pedro M. Silva, for himself and as attorneyin-fact of Berlina F. Silva, in favor of defendants-spouses Claro
Bautista and Nida Bautista over the parcel of land, described
and covered by Transfer Certificate of Title No. B-37189 Metro
Manila District III, null and void and the resulting Transfer
Certificate of Title No. V-2765 of Valenzuela Registry in the
name of Spouses Claro Bautista and Nida Bautista cancelled
and that Transfer Certificate of Title No. B-37189 reinstated.
2. Ordering defendants to reconvey the property covered
by the said Transfer Certificate of Title No. V-2765 together with
the improvements thereon to the plaintiff.
III.
null and void, the nullity [thereof] does not include the one
half share of the husband.[16]
The petition fails for lack of merit.
As to the first ground, petitioners argue that for lack of authority of
Dorado to represent respondent, the latters Complaint failed to state a
cause of action and should have been dismissed. [17]
The argument holds no water.
True, there was no written authority for Dorado to represent
respondent in the filing of her Complaint. However, no written authorization
of Dorado was needed because the Complaint was actually filed by
respondent, and not merely through Dorado as her attorney-in-fact. As
correctly observed by the CA, respondent herself signed the verification
attached to the Complaint.[18] She stated therein that she is the plaintiff in
Civil Case No. 3091-V-89 and that she caused the preparation of the
Complaint.[19] Respondent also personally testified on the facts alleged in
her Complaint.[20] In reality, respondent acted for and by herself, and not
through any representative, when she filed the Complaint. Therefore,
respondent being the real party in interest, by virtue of the then prevailing
Articles 166[21] and 173[22] of the Civil Code, the Complaint she filed
sufficiently stated a cause of action. The sufficiency of the Complaint was
not affected by the inclusion of Dorado as party representative for this was
an obvious error which, under Section 11 of Rule 3, [23] is not a ground for
dismissal, as it may be corrected by the court, on its own initiative and at
any stage of the action, by dropping such party from the complaint.[24]
Anent the second ground, there is no merit to petitioners claim that
they are purchasers in good faith.
That the SPA is a forgery is a finding of the RTC and the CA on a question
of fact.[25] The same is conclusive upon the Court, [26] especially as it is
based on the expert opinion of the NBI which constitutes more than clear,
positive and convincing evidence that respondent did not sign the SPA, and
on the uncontroverted Certification of Dorado that respondent was
in Germany working as a nurse when the SPA was purportedly executed in
1987.
The SPA being a forgery, it did not vest in Pedro any authority to
alienate the subject property without the consent of respondent. Absent
such marital consent, the deed of sale was a nullity.[27]
But then petitioners disclaim any participation in the forgery of the
SPA or in the unauthorized sale of the subject property. They are adamant
that even with their knowledge that respondent was in Germany at the time
of the sale, they acted in good faith when they bought the subject property
from Pedro alone because the latter was equipped with a SPA which
contains a notarial acknowledgment that the same is valid and authentic.
[28]
They invoke the status of buyers in good faith whose registered title in
the property is already indefeasible and against which the remedy
of reconveyance is no longer available.[29] In the alternative, petitioners offer
that should respondent be declared entitled to reconveyance, let it affect
her portion only but not that of Pedro.[30]
Whether or not petitioners are buyers for value in good faith is a
question of fact not cognizable by us in a petition for review. [31] We resolve
only questions of law; we do not try facts nor examine testimonial or
documentary evidence on record. We leave these to the trial and appellate
courts to whose findings and conclusions we accord great weight and
respect, especially when their findings concur.[32] We may have at times
reversed their findings and conclusions but we resort to this only under
exceptional circumstances as when it is shown that said courts failed to
take into account certain relevant facts which, if properly considered, would
justify a different conclusion. [33] No such exceptional circumstance obtains
in the present case for we find the conclusions of the RTC and CA
supported by the established facts and applicable law. However, we do not
fully subscribe to some of their views on why petitioners cannot be
considered in good faith, as we will discuss below.
A holder of registered title may invoke the status of a buyer for value in
good faith as a defense against any action questioning his title. [34] Such
status, however, is never presumed but must be proven by the person
invoking it.[35]
A buyer for value in good faith is one who buys property of another,
without notice that some other person has a right to, or interest in, such
property and pays full and fair price for the same, at the time of such
purchase, or before he has notice of the claim or interest of some other
persons in the property. He buys the property with the wellfounded belief that the person from whom he receives the thing had
title to the property and capacity to convey it.[36]
To prove good faith, a buyer of registered and titled land need only show
that he relied on the face of the title to the property. He need not prove that
he made further inquiry for he is not obliged to explore beyond the four
corners of the title.[37] Such degree of proof of good faith, however, is
sufficient only when the following conditions concur: first, the seller is the
registered owner of the land; [38] second, the latter is in possession thereof;
[39]
and third, at the time of the sale, the buyer was not aware of any claim
or interest of some other person in the property,[40] or of any defect or
restriction in the title of the seller or in his capacity to convey title to the
property.[41]
Absent one or two of the foregoing conditions, then the law itself puts
the buyer on notice and obliges the latter to exercise a higher degree of
diligence by scrutinizing the certificate of title and examining all factual
circumstances in order to determine the sellers title and capacity to transfer
any interest in the property.[42] Under such circumstance, it is no longer
sufficient for said buyer to merely show that he relied on the face of the
title; he must now also show that he exercised reasonable precaution by
inquiring beyond the title.[43] Failure to exercise such degree of precaution
makes him a buyer in bad faith.[44]
In the present case, petitioners were dealing with a seller (Pedro) who had
title to and possession of the land but, as indicated on the face of his title,
whose capacity to sell was restricted, in that the marital consent of
respondent is required before he could convey the property. To prove good
faith then, petitioners must show that they inquired not only into the title of
Pedro but also into his capacity to sell.
According to petitioners, to determine Pedros capacity to sell,
they conducted the following forms of inquiry: first, they inspected the
photocopy of the SPA presented to them by Pedro; [45] second, they brought
said copy to Atty. Lorenzo Lucero (the notary public who prepared the deed
of sale) and asked whether it was genuine; [46] and third, they inspected the
original copy of the SPA after they advanced payment of Php55,000.00 to
Pedro.[47] Essentially, petitioners relied on the SPA, specifically on
its notarial acknowledgment which states that respondent appeared before
the notary public and acknowledged having executed the SPA in favor of
Pedro.
The RTC and CA, however, found such inquiry superficial. They
expected of petitioners an investigation not only into the whereabouts of
respondent at the time of the execution of the SPA[48] but also into the
genuineness of the signature appearing on it. [49]
We find such requirements of the RTC and CA too stringent that to
adopt them would be to throw commerce into madness where buyers run
around to probe the circumstances surrounding each piece of sales
document while sellers scramble to produce evidence of its good
order. Remember that it is not just any scrap of paper that is under scrutiny
but a SPA, the execution and attestation of which a notary public has
intervened.
To what extent, therefore, should an inquiry into a notarized special
power of attorney go in order for one to qualify as a buyer for value in good
faith?
We agree with one author who said:
x x x To speak of notice, as applied to the grantee, is to
follow the language of the Statue of Elizabeth. Its proviso
protects the man who purchases upon good consideration
and bona fide * * * not having at the time * * * any manner
of notice or knowledge. The term notice, however, is really but
an approach to the test of good faith, and all modern legislation
tends toward that point.
Thus, some present day statutes (outside of the Uniform Law)
may speak of notice, actual and constructive, and define both
terms, but they should be liberally construed, so as to
protect bona fide purchaser for value. They may require the
grantee to have knowledge of the debtors intent, but save for
technical purposes of pleading, the term is read in the light of
the rules we are studying. It comes always to a question of the
grantees good faith as distinct from mere negligence. [50]
There must, indeed, be more than negligence. There
must be a conscious turning away from the subject x x x. As
put by the Supreme Court, the grantee must take the
rule should not apply when there is an apparent flaw afflicting the notarial
acknowledgment of the special power of attorney as would cast doubt on
the due execution and authenticity of the document; or when the buyer has
actual notice of circumstances outside the document that would render
suspect its genuineness.
In Domingo v. Reed,[53] we found that the special power of attorney
relied upon by the buyers contained a defective notarial acknowledgment in
that it stated there that only the agent-wife signed the document before the
notary public while the principal-husband did not. Such flaw rendered
the notarialacknowledgment of no effect and reduced the special power of
attorney into a private document. We declared the buyer who relied on the
private special power of attorney a buyer in bad faith.
In Lao v. Villones-Lao,[54] and Estacio v. Jaranilla,[55] we found that the
buyers knew of circumstances extrinsic to the special power of attorney
which
put
in
question
the
actual
execution
of
said
document. In Domingo Lao, the buyer knew that the agent-wife was
estranged from the principal-husband but was living within the same city. In
the Estacio case, we found admissions by the buyers that they knew that at
the time of the purported execution of the special power of attorney, the
alleged principal was not in the Philippines. In both cases we held that the
buyers were not in good faith, not because we found any outward defect in
the notarial acknowledgment of the special powers of attorney, but because
the latter had actual notice of facts that should have put them on deeper
inquiry into the capacity to sell of the seller.
In the present case, petitioners knew that Berlina was in Germany at
the time they were buying the property and the SPA relied upon
by petitioners has a defective notarial acknowledgment. The SPA was a
mere photocopy[56] and we are not convinced that there ever was an
original copy of said SPA as it was only this photocopy that was testified to
by petitioner Nida Bautista and offered into evidence by her counsel. [57] We
emphasize this fact because it was actually this photocopy that was relied
upon by petitioners before they entered into the deed of sale with Pedro. As
admitted to by petitioner Nida Bautista, upon inspection of the photocopy of
the SPA, they gave Pedro an advanced payment of Php55,000.00; this
signifies that, without further investigation on the SPA, petitioners had
agreed to buy the subject property from Pedro.
But then said photocopy of the SPA contains no notarial seal. A
notarial seal is a mark, image or impression on a document which would
indicate that the notary public has officially signed it.[58] There being no
notarial seal, the signature of the notary public on the notarial certificate
was therefore incomplete. The notarial certificate being deficient, it was as
if the notarial acknowledgment was unsigned. The photocopy of the SPA
has no notarial acknowledgment to speak of. It was a mere private
document which petitioners cannot foist as a banner of good faith.
All told, it was not sufficient evidence of good faith that petitioners
merely relied on the photocopy of the SPA as this turned out to be a mere
private document. They should have adduced more evidence that they
looked beyond it. They did not. Instead, they took no precautions at
all. They verified with Atty. Lucero whether the SPA was authentic but then
the latter was not the notary public who prepared the document. Worse,
they purposely failed to inquire who was the notary public who prepared the
SPA. Finally, petitioners conducted the transaction in haste. It took them all
but three days or from March 2 to 4, 1988 to enter into the deed of sale,
notwithstanding the restriction on the capacity to sell of Pedro. [59] In no way
then may petitioners qualify as buyers for value in good faith.
That said, we come to the third issue on whether petitioners may retain the
portion of Pedro Silva in the subject property. Certainly not. It is well-settled
that the nullity of the sale of conjugal property contracted by the husband
without the marital consent of the wife affects the entire property, not just
the share of the wife.[60] We see no reason to deviate from this rule.
WHEREFORE, the petition is hereby DENIED. The Decision
dated November 21, 2001 and Resolution dated February 27, 2003 of the
Court of Appeal are AFFIRMED.
Costs against petitioners.
SO ORDERED.
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson
CONSUELO
SANTIAGO
Associate Justice
MINITA V. CHICO-NAZARIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the
Division Chairmans Attestation, it is hereby certified that the conclusions in
the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.
ARTEMIO V. PANGANIBAN
Chief Justice
[1]
Abad v. Guimba, G.R. No. 157002, July 29, 2005, 465 SCRA 356, 367.
Article 166. Unless the wife has been declared a non compos mentis or
a spendthrift, or is under civil interdiction or is confined in a
leprosarium, the husband cannot alienate or encumber any real
property of the conjugal partnership without the wifes consent x x x.
[3]
Article 173. The wife may, during the marriage, and within ten years from
the transaction questioned, ask the courts for the annulment of any
contract of the husband entered into without her consent, when such
consent is required, or any act or contract of the husband which tends
to defraud her or impair her interest in the conjugal partnership
property. Should the wife fail to exercise this right, she or her heirs,
after the dissolution of the marriage, may demand the value of the
property fraudulently alienated by the husband.
[4]
Article 124. The administration and enjoyment of the conjugal partnership
property shall belong to both spouses jointly. In case of
disagreement, the husbands decision shall prevail, subject to
recourse to the court by the wife for a proper remedy which must be
availed of within five years from the date of the contract implementing
such decision.
In the event that one spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal properties, the other
spouse may assume sole powers of administration. These powers do
not include the powers of disposition or encumbrance which must
have the authority of the court or the written consent of the other
spouse. In the absence of such authority or consent, the disposition
or encumbrance shall be void. However, the transaction shall be
construed as a continuing offer on the part of the consenting spouse
and the third person, and may be perfected as a binding contract
upon the acceptance by the other spouse or authorization by the
court before the offer is withdrawn by either or both offerors.
[5]
Domingo v. Reed, G.R. No. 157701, December 9, 2005, 477 SCRA 227,
242.
[6]
Penned by Associate Justice Bernardo P. Abesamis and concurred in by
Associate Justices Ramon A. Barcelona and Perlita J. Tria Tirona.
[7]
Entitled, Berlina F. Silva, represented by Hermes J. Dorado, in his
capacity
as
Attorney-in-Fact,
Plaintiff-Appellee,
[2]
versus Sps. Claro & Nida Bautista, Defendants-Appellants & ThirdParty Plaintiffs versus Pedro M. Silva, Third-Party Defendant.
[8]
Records, p. 18.
[9]
Id. at 28.
[10]
Id. at 47.
[11]
Id. at 212-213.
[12]
Id. at 214.
[13]
Id. at 201-203; 215-216.
[14]
CA rollo, p. 144.
[15]
Id. at 170.
[16]
Rollo, p. 4.
[17]
Rollo, pp. 8-9.
[18]
Records, p. 4.
[19]
Id.
[20]
TSN, August 8, 1991, pp. 4-25.
[21]
See note 2
[22]
See note 3.
[23]
Sec. 11. Misjoinder and non-joinder of parties. Neither misjoinder nor
non-joinder of parties is ground for dismissal of an action. Parties
may be dropped or added by order of the court on motion of any party
or on its own initiative at any stage of the action and on such terms as
are just. Any claim against a misjoined party may be severed and
proceeded with separately.
[24]
Cabutihan v. Landcenter Construction & Development Corporation, 432
Phil. 927, 941 (2002).
[25]
Philippine National Oil Company v. National College of Business and
Arts, G.R. No. 155698, January 31, 2006, 481 SCRA 298, 309.
[26]
Domingo
v.
Reed,
supra; Estacio v. Jaranilla,
G.R.
No.
149250, December 8, 2003, 417 SCRA 250, 259.
[27]
Heirs of Ignacia Aguilar-Reyes v. Mijares, G.R. No. 143826, August 28,
2003, 410 SCRA 97, 106; Bravo-Guerrero v. Bravo, G.R. No. 152658,
July 29, 2005, 465 SCRA 244, 257. See also notes 18 and 19.
[28]
Rollo, pp. 7-8.
[29]
Rollo, pp. 6-8.
[30]
Rollo, p. 9.
[31]
Orquiola v. Court of Appeals, 435 Phil. 323, 331 (2002).
[32]
See note 21.
[33]
Francisco v. Court of Appeals, G.R. No. 118749, April 25, 2003, 401
SCRA 594, 605. Findings of fact may also be passed upon and
reviewed by the Supreme Court in the following instances: (1) when
[46]
[52]
SECOND DIVISION
TITAN CONSTRUCTION
CORPORATION,
Petitioner,
- versus -
covered by Transfer Certificate of Title (TCT) No. 156043 issued by the Register
of Deeds of Quezon City.[6] In 1976, the spouses separated de facto, and no
longer communicated with each other.[7]
Sometime in March 1995, Manuel discovered that Martha had previously
sold
the
property
to
Titan
Construction
Corporation
(Titan)
[8]
for P1,500,000.00 through a Deed of Sale dated April 24, 1995, and that TCT
No. 156043 had been cancelled and replaced by TCT No. 130129 in the name
of Titan.
Thus, on March 13, 1996, Manuel filed a Complaint[9] for Annulment of
Contract and Recovenyance against Titan before the RTC of Quezon
City. Manuel alleged that the sale executed by Martha in favor of Titan was
without his knowledge and consent, and therefore void. He prayed that the Deed
of Sale and TCT No. 130129 be invalidated, that the property be reconveyed to
the spouses, and that a new title be issued in their names.
In its Answer with Counterclaim,[10] Titan claimed that it was a buyer in
good faith and for value because it relied on a Special Power of Attorney
(SPA) [11] dated January 4, 1995 signed by Manuel which authorized Martha to
dispose of the property on behalf of the spouses. Titan thus prayed for the
dismissal of the complaint.
In his unverified Reply,[12] Manuel claimed that the SPA was spurious, and
that the signature purporting to be his was a forgery; hence, Martha was wholly
without authority to sell the property.
Subsequently, Manuel filed a Motion for Leave to File Amended
Complaint[13] which was granted by the trial court. Thus, on October 15, 1996,
Manuel filed an Amended Complaint[14] impleading Martha as a co-defendant in
the proceedings. However, despite personal service of summons[15] upon
Martha, she failed to file an Answer. Thus, she was declared in default. [16] Trial
then ensued.
Ruling of the Regional Trial Court
On March 7, 2000, the RTC issued a Decision which (i) invalidated both
the Deed of Sale and TCT No. 130129; (ii) ordered Titan to reconvey the
property to Martha and Manuel; (iii) directed the Register of Deeds of Quezon
City to issue a new title in the names of Manuel and Martha; and (iv) ordered
2.)
3.)
Ordering
defendant
Construction Corporation to reconvey the
property to plaintiff and his spouse.
Titan
subject
4.)
5.)
Ordering
defendant
to
pay P200,000.00 plus P1,000.00 per appearance as
attorneys fees and P50,000.00 as costs of suit.
SO ORDERED.[18]
Ruling of the Court of Appeals
In its Decision dated July 20, 2004, the CA affirmed the Decision of the
trial court but deleted the award of attorneys fees and the amount
of P50,000.00 as costs.
The dispositive portion of the Decision reads:
WHEREFORE, with the MODIFICATION by deleting the
award of attorneys fees in favor of plaintiff-appellee Manuel A.
David, Sr. and the amount of P50,000.00 as costs, the Decision
appealed from is AFFIRMED in all other respects, with costs against
defendant-appellant Titan Construction Corporation.[19]
Titan moved for reconsideration but the motion was denied on August 31,
2005.
Hence, this petition.
Issues
Titan raises the following assignment of errors:
A.
B.
C.
D.
E.
F.
Petitioners Arguments
Titan is claiming that it was a buyer in good faith and for value, that the
property was Marthas paraphernal property, that it properly relied on the SPA
presented by Martha, and that the RTC erred in giving weight to the alleged
expert testimony to the effect that Manuels signature on the SPA was
spurious. Titan also argues, for the first time, that the CA should have ordered
Martha to reimburse the purchase price paid by Titan.
Our Ruling
The petition is without merit.
The property is part of the spouses
conjugal partnership.
The Civil Code of the Philippines,[21] the law in force at the time of the celebration
of the marriage between Martha and Manuel in 1957, provides:
Article 160. All property of the marriage is presumed to belong to
the conjugal partnership, unless it be proved that it pertains
exclusively to the husband or to the wife.
Article 153 of the Civil Code also provides:
Article 153. The following are conjugal partnership property:
(1) That which is acquired by onerous title during the marriage at
the expense of the common fund, whether the acquisition be for the
partnership, or for only one of the spouses;
xxxx
These provisions were carried over to the Family Code. In particular,
Article 117 thereof provides:
Art. 117. The following are conjugal partnership properties:
(1)
Those acquired by onerous title
during the marriage at the expense of the common fund,
whether the acquisition be for the partnership, or for only one
of the spouses;
xxxx
Article 116 of the Family Code is even more unequivocal in that
[a]ll property acquired during the marriage, whether the acquisition appears
to have been made, contracted or registered in the name of one or both
spouses, is presumed to be conjugal unless the contrary is proved.
We are not persuaded by Titans arguments that the property was Marthas
exclusive property because Manuel failed to present before the RTC any proof
of his income in 1970, hence he could not have had the financial capacity to
contribute to the purchase of the property in 1970; and that Manuel admitted that
it was Martha who concluded the original purchase of the property. In
consonance with our ruling in Spouses Castro v. Miat,[22] Manuel was not
required to prove that the property was acquired with funds of the partnership.
Rather, the presumption applies even when the manner in which the property
was acquired does not appear.[23] Here, we find that Titan failed to overturn the
presumption that the property, purchased during the spouses marriage, was part
of the conjugal partnership.
In the absence of Manuels consent, the
Deed of Sale is void.
Since the property was undoubtedly part of the conjugal partnership, the
sale to Titan required the consent of both spouses. Article 165 of the Civil Code
expressly provides that the husband is the administrator of the conjugal
partnership. Likewise, Article 172 of the Civil Code ordains that (t)he wife cannot
bind the conjugal partnership without the husbands consent, except in cases
provided by law.
Similarly, Article 124 of the Family Code requires that any disposition or
encumbrance of conjugal property must have the written consent of the
other spouse,otherwise, such disposition is void. Thus:
Art. 124. The administration and enjoyment of the conjugal
partnership shall belong to both spouses jointly. In case of
disagreement, the husband's decision shall prevail, subject to
recourse to the court by the wife for proper remedy, which must be
availed of within five years from the date of the contract
implementing such decision.
first blush a logical conclusion. However, the Court could not yield to
such an argument considering that a rigid application of the
pertinent provisions of the Rules of Court will not be given premium
when it would obstruct rather than serve the broader interest of
justice.[24]
Titan claims that the RTC gave undue weight to the testimony of Manuels
witness, and that expert testimony on handwriting is not conclusive.
The contention lacks merit. The RTCs ruling was based not only on the
testimony of Manuels expert witness finding that there were significant
differences between the standard handwriting of Manuel and the signature found
on the SPA, but also on Manuels categorical denial that he ever signed any
document authorizing or ratifying the Deed of Sale to Titan.[25]
We also note that on October 12, 2004, Titan filed before the CA a
Manifestation with Motion for Re-Examination of Another Document/
Handwriting Expert[26]alleging that there is an extreme necessity[27] for a conduct
of another examination of the SPA by a handwriting expert as it will materially
affect and alter the final outcome[28] of the case. Interestingly, however, Titan filed
on January 6, 2005 a Manifestation/Motion to Withdraw Earlier Motion for ReExamination of PNP Laboratory Expert[29] this time praying that its motion for reexamination be withdrawn. Titan claimed that after a circumspect evaluation,
deemed it wise not to pursue anymore said request (re-examination) as there is
a great possibility that the x x x [PNP and the NBI] might come out with two
conflicting opinions and conclusions x x x that might cause some confusion to
the minds of the Honorable Justices in resolving the issues x x x as well as the
waste of material time and resources said motion may result.[30]
In any event, we reiterate the well-entrenched rule that the factual findings
of trial courts, when adopted and confirmed by the CA, are binding and
conclusive and will generally not be reviewed on appeal.[31] We are mandated to
accord great weight to the findings of the RTC, particularly as regards its
assessment of the credibility of witnesses[32] since it is the trial court judge who is
in a position to observe and examine the witnesses first hand. [33] Even after a
careful and independent scrutiny of the records, we find no cogent reason to
depart from the rulings of the courts below.[34]
Furthermore, settled is the rule that only errors of law and not of fact are
reviewable by this Court in a petition for review on certiorari under Rule 45 of the
Rules of Court. This applies with even greater force here, since the factual
findings by the CA are in full agreement with those of the trial court.[35]
Indeed, we cannot help but wonder why Martha was never subpoenaed
by Titan as a witness to testify on the character of the property, or the
circumstances surrounding the transaction with Titan. Petitioners claim that she
could not be found is belied by the RTC records, which show that she personally
received and signed for the summons at her address in Greenhills, San
Juan. Titan neither filed a cross claim nor made any adverse allegation against
Martha.
On the Failure to Deny the
Genuineness and Due Execution of the
SPA
Titan claimed that because Manuel failed to specifically deny the
genuineness and due execution of the SPA in his Reply, he is deemed to have
admitted the veracity of said document, in accordance with Rule 8, Sections 7
and 8,[36] of the Rules of Court.
On this point, we fully concur with the findings of the CA that:
It is true that the reply filed by Manuel alleging that the special
power of attorney is a forgery was not made under oath. However,
the complaint, which was verified by Manuel under oath, alleged
that the sale of the subject property executed by his wife, Martha, in
favor of Titan was without his knowledge, consent, and approval,
express or implied; and that there is nothing on the face of the deed
of sale that would show that he gave his consent thereto.
In Toribio v. Bidin, it was held that where the verified complaint
alleged that the plaintiff never sold, transferred or disposed their
share in the inheritance left by their mother to others, the
defendants were placed on adequate notice that they would be
called upon during trial to prove the genuineness or due execution
of the disputed deed of sale. While Section 8, Rule 8 is mandatory, it
is a discovery procedure and must be reasonably construed to
attain its purpose, and in a way as not to effect a denial of
substantial justice. The interpretation should be one which assists
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION
Associate Justice
ROBERTO A. ABAD
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons attestation, it is hereby certified that the conclusions in the
above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
[1]
[35]
Petitioner Onesiforo Alinas (Onesiforo) and respondent Victor Alinas (Victor) are
brothers. Petitioners allege that they entrusted their properties to Victor and
Elena Alinas(respondent spouses) with the agreement that any income from
rentals of the properties should be remitted to the Social Security System (SSS)
and to the Rural Bank ofOroquieta City (RBO), as such rentals were believed
sufficient to pay off petitioners' loans with said institutions. Lot 896-B-9-A with the
bodega was mortgaged as security for the loan obtained from the RBO,
while Lot 896-B-9-B
with
the
house
was
mortgaged
to
the
SSS. Onesiforo alleges that he left blank papers with his signature on them to
facilitate the administration of said properties.
Sometime in 1993, petitioners discovered that their two lots were already titled in
the name of respondent spouses.
Records show that after Lot 896-B-9-A was extra-judicially foreclosed, Transfer
Certificate of Title (TCT) No. T-11853[3] covering said property was issued in the
name of mortgagee RBO on November 13, 1987. On May 2, 1988, the duly
authorized representative of RBO executed a Deed of Installment Sale of Bank's
Acquired Assets[4]conveying Lot 896-B-9-A to respondent spouses. RBO's TCT
over Lot 896-B-9-A was then cancelled and on February 22, 1989, TCT No. T12664[5] covering said lot was issued in the name of respondent spouses.
Lot 896-B-9-B was also foreclosed by the SSS and on November 17, 1986, the
Ex-Oficio City Sheriff of Ozamis City issued a Certificate of Sale[6] over said
property in favor of the SSS. However, pursuant to a Special Power of
Attorney[7] signed by Onesiforo in favor of Victor, dated March 10, 1989, the latter
was able to redeem, on the same date,Lot 896-B-9-B from the SSS for the sum
of P111,110.09. On June 19, 1989, a Certificate of Redemption [8] was issued by
the SSS.
Onesiforo's signature also appears in an Absolute Deed of Sale[9] likewise
dated March 10, 1989, selling Lot 896-B-9-B to respondent spouses. The
records also show a notarized document dated March 10, 1989 and captioned
Agreement[10] whereby petitioner Onesiforo acknowledged that his brother Victor
used his own money to redeem Lot896-B-9-B from the SSS and, thus, Victor
became
the
owner
of
said
lot. In
the
same Agreeement,
petitioner Onesiforo waived whatever rights, claims, and interests he or his heirs,
successors and assigns have or may have over the subject property. On March
15, 1993, by virtue of said documents, TCT No. 17394 [11] covering Lot 896-B-9-B
was issued in the name of respondent spouses.
On June 25, 1993, petitioners filed with the Regional Trial Court (RTC)
of Ozamis City a complaint for recovery of possession and ownership of their
conjugal properties with damages against respondent spouses.
After trial, the RTC rendered its Decision dated November 13, 1995, finding that:
1. Plaintiffs have not proven that they entrusted defendant spouses
with the care and administration of their properties. It was
Valeria Alinas,
their
mother,
whom
plaintiff Onesifororequested/directed to take care of everything and
sell everything and Teresita Nuez, his elder sister, to whom he left a
verbal authority to administer his properties.
2. Plaintiffs have not proven their allegation that defendant spouses
agreed to pay rent of P1,500.00 a month for the occupancy of
plaintiffs' house, which rent was to be remitted to the SSS and Rural
Bank of Oroquieta to pay off plaintiffs' loan and to keep for plaintiffs
the rest of the rent after the loans would have been paid in full.
3. Plaintiff Onesiforo's allegation that defendants concocted deeds of
conveyances (Exh. M, N & O) with the use of his signatures in blank
is not worthy of credence. Why his family would conspire to rob him
at a time when life had struck him with a cruel blow in the form of a
failed marriage that sent him plummeting to the depths of despair is
not explained and likewise defies comprehension. That his
signatures appear exactly on the spot where they ought to be
in Exhs. M, N & O belies his pretension that he affixed them on blank
paper only for the purpose of facilitating his sister Terry's acts of
administration.
This Court, therefore, does not find that defendant spouses had
schemed to obtain title to plaintiffs' properties or enriched themselves
at the expense of plaintiffs.[12]
with the following dispositive portion:
WHEREFORE, this Court renders judgment:
1.
2.
declaring
[petitioners] Onesiforo and
Rosario Alinas owners of Lot 896-B-9-B with the house
standing thereon, plaintiff Onesiforo's sale thereof to
defendants spouses without the consent of his wife being
null and void and defendant spouses' redemption thereof
from the SSS not having conferred its ownership to them;
3.
4.
5.
No costs.
SO ORDERED.[13]
Only respondent spouses appealed to the CA assailing the RTC's ruling
that they acquired Lot 896-B-9-B from the SSS by mere redemption and not by
purchase. They likewise question the reimbursement by petitioners of the
redemption price without interest.
On September 25, 2002, the CA promulgated herein assailed Decision,
the dispositive portion of which reads:
declaring
[respondents]
Victor
Jr.
and
Elena Alinas owners of Lot 896-B-9-A with the building (bodega)
standing thereon and affirming the validity of their acquisition
thereof from the Rural Bank of Oroquieta, Inc.;
2.
3.
ordering [petitioners]
Rosario Alinas to
reimburse
[respondents] the redemption amount of P55,550.00 with interest
of 12% per annum from the time of redemption until fully paid.
4.
5.
6.
No costs.
SO ORDERED.[14]
Petitioners moved for reconsideration but the CA denied said motion per herein
assailed Resolution dated March 31, 2003.
ruled
in De
Pedro
It has been held that a certificate of title, once registered, should not
thereafter be impugned, altered, changed, modified, enlarged or
diminished except in a direct proceeding permitted by law. xx x
lapsed. The trial court, therefore, correctly held that respondent spouses acquired
their title over the lot from RBO and definitely not from petitioners.
However, with regard to Lot 896-B-9-B (with house), the Court finds it patently
erroneous for the CA to have applied the principle of equity in sustaining the
validity of the sale of Onesiforos one-half share in the subject property to
respondent spouses.
Although petitioners were married before the enactment of the Family Code
on August 3, 1988, the sale in question occurred in 1989. Thus, their property
relations are governed by Chapter IV on Conjugal Partnership of Gains of the
Family Code.
The CA ruling completely deviated from the clear dictate of Article 124 of the
Family Code which provides:
Art. 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. x x x
In the event that one spouse is incapacitated or otherwise
unable to participate in the administration of the conjugal properties,
the other spouse may assume sole powers of administration. These
powers do not include the powers of disposition or encumbrance
which must have the authority of the court or the written consent of
the other spouse. In the absence of such authority or consent
the
disposition
or
encumbrance
shall
be
void. x x x (Underscoring and emphasis supplied)
In Homeowners Savings & Loan Bank v. Dailo,[19] the Court categorically stated
thus:
In Guiang v. Court of Appeals, it was held that the sale of a conjugal
property requires the consent of both the husband and wife. In
applying Article 124 of the Family Code, this Court declared that the
absence of the consent of one renders the entire sale null and
void, including the portion of the conjugal property pertaining to
the husband who contracted the sale. x x x
xxxx
The trial court, however, erred in imposing 12% interest per annum
on the amount due the respondents. In Eastern Shipping Lines, Inc.
v. Court of Appeals, it was held that interest on obligations not
constituting a loan or forbearance of money is six percent (6%)
annually. If the purchase price could be established with certainty at
the time of the filing of the complaint, the six percent (6%) interest
should be computed from the date the complaint was filed until
finality of the decision.
In Lui vs. Loy, involving a suit
for reconveyance and annulment of title filed by the first buyer
against the seller and the second buyer, the Court, ruling in favor of
the first buyer and annulling the second sale, ordered the seller to
refund to the second buyer (who was not a purchaser in good faith)
the purchase price of the lots. It was held therein that the 6% interest
should be computed from the date of the filing of the complaint by the
first buyer. After the judgment becomes final and executory until the
obligation is satisfied, the amount due shall earn interest at 12% per
year, the interim period being deemed equivalent to a forbearance of
credit.
Accordingly, the amount of P110,000.00 due the respondent
spouses which could be determined with certainty at the time of
the filing of the complaint shall earn 6% interest per annum
from June 4, 1986 until the finality of this decision. If the
adjudged principal and the interest (or any part thereof)
remain unpaid thereafter, the interest rate shall be twelve
percent (12%) per annum computed from the time the judgment
becomes final and executory until it is fully satisfied.[24]
Thus, herein petitioners should reimburse respondent spouses the redemption
price plus interest at the rate of 6% per annum from the date of filing of the
complaint, and after the judgment becomes final and executory, the amount due
shall earn 12% interest per annum until the obligation is satisfied.
Petitioners pray that said redemption price and interest be offset or compensated
against the rentals for the house and bodega.
The records show that the testimonial evidence for rentals was only with regard to
the bodega.[25] However, the Court has affirmed the ruling of
the RTC that Lot 896-B-9-A with the bodega had been validly purchased by
respondent spouses from the RBO and a TCT over said property was issued in
is
governed
by Article
1279
of
the
2.
3.
4.
Civil
5.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
ATTESTATION
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
C E R T I F I CAT I O N
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.
REYNATO S. PUNO
Chief Justice
[1]
[8]