G.R. No. 157434 ; September 19, 2006
SPOUSES CLARO and NIDA BAUTISTA, petitioners, vs. BERLINDA F. SILVA, Represented by HERMES J. DORADO, in his capacity as Attorney-In-Fact, respondent.

FACTS

The property, registered under the names of spouses Berlina and Pedro Silva, was sold by Pedro to spouses Claro and Nida Bautista. Pedro executed the Deed of Absolute Sale for himself and as attorney-in-fact for his wife Berlina, purportedly acting under a Special Power of Attorney (SPA) she executed. Consequently, a new title was issued in the Bautistas’ names. Berlina, through Hermes Dorado as her attorney-in-fact, filed a Complaint for Annulment of the Deed of Sale and Reconveyance, alleging her signature on the SPA was forged, rendering the sale unauthorized.
The Regional Trial Court found the signature on the SPA to be a forgery and declared the sale null and void, ordering reconveyance and cancellation of the Bautistas’ title. It also ruled in favor of the Bautistas in their third-party complaint against Pedro Silva for indemnity. The Court of Appeals affirmed the decision. The Bautistas appealed, arguing they were purchasers in good faith who relied on the SPA which appeared valid on its face.

ISSUE

Whether the petitioners, Spouses Bautista, are purchasers in good faith and for value, such that the sale and the resulting transfer of title should be upheld.

RULING

No. The Supreme Court denied the petition and affirmed the lower courts’ decisions. The legal logic hinges on the duty of a buyer when dealing with a seller whose capacity to alienate conjugal property is restricted. While a buyer dealing with a registered owner in possession generally needs only to rely on the certificate of title, a different rule applies when the seller’s capacity is limited, as in the sale of conjugal property by one spouse.
Here, Pedro Silva needed his wife’s consent. The Bautistas’ reliance on the face of the SPA was insufficient to establish good faith. The Court found the SPA was notarized without Berlina’s personal appearance before the notary public, a fatal defect making it void and imparting no constructive notice. Given this flaw, the Bautistas had a duty to investigate beyond the document’s face into the circumstances of its execution, which they failed to do. Consequently, they cannot be considered purchasers in good faith. The sale being unauthorized, the nullity of the transaction affects the entire conjugal property, not merely the wife’s half, as the contract is void in its entirety for lack of consent. The Bautistas’ remedy lies in enforcing the judgment for indemnity against the husband, Pedro Silva.