GR 243470; (January, 2021) (Digest)
G.R. No. 243470, January 12, 2021
Spouses Danilo I. Yabut and Nelda Yabut, represented by their Attorney-in-Fact, Manuel C. Yabut, Petitioners, vs. Michelle C. Nachbaur, Respondent.
FACTS
Petitioners Spouses Yabut, through their son Manuel, entered into a Deed of Absolute Sale on July 2, 2007, purchasing a property from brothers Jose So and Antonio So (married to Anita Ignacio). Manuel paid the purchase price, received the original title (TCT No. 196082), and engaged Fe Manubay to facilitate the transfer. Manubay later delivered a fake title (TCT No. 271840) in Manuel’s name. In January 2008, Manuel discovered that the original title was annotated with a Special Power of Attorney (SPA) dated November 15, 2007, allegedly executed by the brothers So in favor of Anita, and a Deed of Real Estate Mortgage (REM) dated December 6, 2007, executed by Anita to secure an P800,000.00 loan from respondent Michelle Nachbaur. The brothers So and Anita categorically denied executing the SPA or the REM, testifying that their signatures thereon were forged, and presented their genuine signatures on the Deed of Absolute Sale and their affidavits. Petitioners filed a complaint for annulment of the SPA and REM. The Regional Trial Court (RTC) dismissed the complaint, ruling the forgery was not proven by clear and convincing evidence and that respondent was a mortgagee in good faith who relied on the clean title. The Court of Appeals affirmed the RTC decision.
ISSUE
Whether respondent is a mortgagee in good faith such that the real estate mortgage is superior to the unregistered sale.
RULING
No. The Supreme Court reversed the lower courts’ decisions. It held that the forgery of the signatures on the SPA, REM, and promissory note was sufficiently proved by clear and convincing evidence through a comparison with the genuine signatures on the Deed of Absolute Sale and the affidavits of the brothers So and Anita, coupled with their categorical testimonies. Since the SPA was forged, Anita had no authority to mortgage the property, making the REM void. Consequently, respondent could not be considered a mortgagee in good faith, as a void contract confers no rights. The Court ordered the annulment of the SPA and REM, the cancellation of their annotations on the title, and the surrender of the owner’s duplicate certificate of title to petitioners. The Register of Deeds was directed to issue a new title free from these encumbrances if surrender was not possible.