G.R. No. 149750 ; June 16, 2003
AURORA ALCANTARA-DAUS, Petitioner, vs. Spouses HERMOSO and SOCORRO DE LEON, Respondents.

FACTS

Respondents Spouses Hermoso and Socorro De Leon filed a complaint for annulment of documents and title, claiming ownership of a parcel of land Hermoso inherited from his father. They alleged that after engaging the services of the late Atty. Florencio Juan, they discovered documents conveying their properties to Hermoso’s siblings and to Atty. Juan’s sisters without their consent. Specifically, Hermoso’s signature on a Deed of Extrajudicial Partition and Quitclaim, which purportedly transferred the subject land to his brother Rodolfo de Leon, was forged. Rodolfo subsequently sold the land to petitioner Aurora Alcantara-Daus in 1975.
Petitioner averred she bought the land in good faith and for value, and had been in continuous, public, and peaceful possession since 1975. The Regional Trial Court ruled in her favor, holding the respondents’ claim was barred by laches and that the notarial Deed of Extrajudicial Partition was presumptively authentic. The Court of Appeals reversed this decision, finding the signature was forged, Rodolfo was not the owner at the time of sale, and petitioner could not be a buyer in good faith.

ISSUE

The core issues are: (1) the validity of the Deed of Absolute Sale between Rodolfo and petitioner; (2) the authenticity of the Deed of Extrajudicial Partition; (3) petitioner’s good faith; and (4) whether the action is barred by prescription or laches.

RULING

The Supreme Court denied the petition, affirming the Court of Appeals. The legal logic centers on the distinction between the perfection and the consummation of a contract of sale, and the principle of nemo dat quod non habet (no one can give what one does not have). A contract of sale is perfected by mere consent. However, ownership is transferred only upon delivery, and the seller must have the right to transfer ownership at that moment. Here, Rodolfo de Leon was not the owner of the land when he sold and delivered it to petitioner. The subsequent discovery that his title was based on a forged Deed of Extrajudicial Partition meant he never acquired valid ownership. Consequently, he could not transmit any valid title to petitioner.
Petitioner cannot be considered a buyer in good faith. Good faith requires diligence in ascertaining the seller’s title. The forgery of the underlying document and the fact that the land was not registered in Rodolfo’s name at the time of sale negate any claim of good faith. Finally, the action is not barred by laches. Laches is an equitable doctrine and cannot be invoked to defeat a legal right, especially where, as here, the respondents’ delay in filing the suit was explained by their lack of knowledge of the fraudulent transactions until they discovered the forgery. The action for reconveyance based on an implied trust, which prescribes in ten years from the issuance of the title, had not prescribed when filed.