G.R. No. 149250 ; December 8, 2003
SPOUSES LEON AND LOLITA ESTACIO, petitioners, vs. DR. ERNESTO JARANILLA, respondent.

FACTS

Josefina Jaranilla, owner of a parcel of land in Pagadian City, resided abroad with her son, respondent Dr. Ernesto Jaranilla. In 1992, petitioner Lolita Estacio, using a Special Power of Attorney (SPA) dated July 26, 1991, sold the property to Luis Bersales, Jr. The title was transferred, and Bersales subsequently sold it to Jorge Almonte. Upon her return, Josefina discovered the sale and, through counsel, sent a letter to the Register of Deeds stating she had not authorized any transaction and that the owner’s duplicate title was in her possession. She later died, and her son Ernesto filed an action for annulment of the deeds and titles, alleging the SPA was forged.
Petitioners Spouses Estacio claimed Lolita received the SPA documents from Josefina’s sister, Remedios Jaranilla, by mail and acted in good faith, relying on Remedios’s assurances. The defendants, including Bersales and Almonte, claimed to be innocent purchasers for value. The parties agreed to submit the case based on the documentary evidence without a full trial.

ISSUE

Whether the Court of Appeals erred in affirming the nullity of the conveyances and titles derived from the forged Special Power of Attorney.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic centers on the principle that a forged or falsified document conveys no title. The Court upheld the factual finding of both lower courts that the signatures on the SPAs were forged, as evidenced by a manifest disparity when compared to Josefina Jaranilla’s genuine signature. Since Lolita Estacio acted under a void authority, the initial sale to Bersales was null and void. Consequently, Bersales had no valid title to transfer to Almonte.
The Court rejected Lolita’s defense of good faith. Her claim of receiving the documents by mail from the principal’s sister, without any direct verification from Josefina Jaranilla herself despite the opportunity, demonstrated a lack of the diligence required in such transactions. Prudence dictated that she confirm the SPA’s authenticity, especially since the principal could have mailed it directly if she were truly in Cebu. Her failure to do so made her use of the spurious documents the proximate cause of the fraudulent conveyances. The Court also found no merit in the claim that subsequent buyers were in good faith, as the chain of title was fatally defective from its void origin. The findings of fact by the Court of Appeals, affirming the trial court, are conclusive and binding absent a showing of grave abuse of discretion.