G.R. No. 215006 , January 11, 2021
ARAKOR CONSTRUCTION AND DEVELOPMENT CORPORATION, PETITIONER, VS. TERESITA G. STA. MARIA, ALFREDO N. GADDI, FERNANDO N. GADDI, JR., MARILYN G. MALIXI, EVANGELINE G. GOLICRUZ, LILIAN G. FRANCISCO, LILIBETH G. PAGUIO AND THE LATE EFREN N. GADDI, HIS HEIRS, JENNY, ALLAN, JOEFFREY AND FELY ALL SURNAMED GADDI, RESPONDENTS.

FACTS

Spouses Fernando Gaddi, Sr. and Felicidad Nicdao Gaddi owned five parcels of land in Hermosa, Bataan. Felicidad died intestate on November 18, 1985, survived by her husband and eight children (the Gaddis). The properties were not partitioned and remained registered in the spouses’ names. Fernando Sr. died on February 7, 1996. Subsequently, the Gaddis discovered that their parents had allegedly sold the five parcels to Arakor Construction and Development Corporation for P400,000.00, as evidenced by two undated Deeds of Absolute Sale, and the titles were transferred to Arakor. The Gaddis filed a Complaint for Annulment of the Deeds and Titles, alleging the deeds were forged as Felicidad had been dead for seven years prior to their purported execution. Arakor contended the deeds were signed and notarized when delivered by Fernando Sr. and his son Efren on September 8, 1992, and it had no knowledge of Felicidad’s death. Arakor also claimed the Gaddis had executed waivers of their rights in favor of Fernando Sr., consolidating his ownership, and that it was a purchaser in good faith. The Regional Trial Court declared the Deeds void for being fictitious and forged, ordered the annulment of the sale and reconveyance of the properties to the Gaddis, and directed the Gaddis to return the P400,000.00 to Arakor, chargeable to Fernando Sr.’s estate. The Court of Appeals affirmed the RTC decision. Arakor elevated the case to the Supreme Court.

ISSUE

Whether the Court of Appeals correctly affirmed the findings that the Deeds of Absolute Sale are null and void for being forged and fictitious.

RULING

Yes, the Supreme Court denied the petition and affirmed the assailed Court of Appeals Decision and Resolution. The Deeds of Absolute Sale were declared null and void ab initio. It was conclusively established that Felicidad died in 1985 and could not have signed the deeds in 1992; her purported signatures were forgeries. The deeds were simulated and fictitious. The waivers executed by the Gaddis in favor of Fernando Sr. did not cure the defect, as they pertained to inheritance rights from Felicidad, which had not yet been liquidated and partitioned; thus, Fernando Sr. could not have consolidated full ownership to validly convey the properties. Arakor, through its president Atty. Legaspi, was not a purchaser in good faith; as a lawyer, he should have exercised due diligence by verifying Felicidad’s status, especially since the titles remained in the names of both spouses. The principle of in pari delicto does not apply as the contract is void. The parties were ordered to revert to their pre-sale positions: the properties are to be reconveyed to the Gaddis, and the P400,000.00 purchase price, with legal interest, is to be returned to Arakor, chargeable against the estate of Fernando Sr.