GR 150066; (April, 2007) (Digest)
G.R. No. 150066 ; April 13, 2007
SPS. EMMANUEL (deceased) and EDNA CHUA and SPS. MANUEL and MARIA CHUA, Petitioners, vs. MSGR. VIRGILIO SORIANO. Substituted by Sister Mary Virgilia Celestino Soriano, Respondent.
FACTS
Msgr. Virgilio Soriano owned a parcel of land in Quezon City. In 1988, he executed a Special Power of Attorney (SPA) authorizing his cousin, Emmanuel Celestino, to mortgage the property. After the original title was destroyed in a fire, Soriano executed another SPA authorizing Celestino to initiate reconstitution proceedings. During this process, Soriano discovered that the property had been sold to spouses Emmanuel and Edna Chua and spouses Manuel and Maria Chua (the Chuas) through an Absolute Deed of Sale dated July 4, 1989. This sale was executed by Celestino by virtue of an SPA dated March 9, 1989, which bore Soriano’s purported signature. Soriano filed a complaint for annulment, claiming the signature on the March 1989 SPA was forged.
The Chuas defended themselves as purchasers in good faith, asserting they relied on the SPA annotated on the owner’s duplicate certificate of title and the tax declaration. The Regional Trial Court (RTC) ruled in favor of Soriano, declaring the SPA and deed of sale void, and ordered the Chuas to reconvey the property. The Court of Appeals affirmed the RTC but modified the disposition by ordering the Register of Deeds to reinstate Soriano’s title instead of ordering reconveyance.
ISSUE
Whether the Chuas are purchasers in good faith and for value, thereby entitling them to retain ownership of the property.
RULING
No, the Chuas are not purchasers in good faith. The Supreme Court affirmed the decisions of the lower courts. The core legal principle applied is that a forged or falsified document conveys no title. The March 9, 1989 SPA, which was the sole basis for Celestino’s authority to sell, was conclusively established to be a forgery through expert testimony from the NBI. Since the SPA was void, the subsequent deed of sale was also void and transferred no rights to the Chuas.
The Court rejected the defense of being purchasers in good faith. The degree of diligence required in checking the vendor’s authority is greater when the vendor is not the registered owner. The Chuas failed to exercise this due diligence. They dealt solely with Celestino, the agent, and did not personally verify his authority with Soriano, the principal. Their reliance on the SPA annotated on the duplicate title and the tax declaration was insufficient. Notably, the SPA was notarized in Pasig, while the property was in Quezon City, which should have prompted further inquiry. Furthermore, the original title was under administrative reconstitution at the time, a fact which placed them on inquiry notice and required them to be more cautious. Their failure to investigate these circumstances negates any claim of good faith. Consequently, the forged SPA and the void sale cannot prejudice the true owner, Soriano.