BAUTISTA v SILVA

GR No. 157434

FACTS: Spouses Berlina Silva and Pedro Silva were the owners of a parcel of land
with a Transfer Certificate of Title No B-37189, which was registered on August 14,
1980 in their names.

On March 3, 1988, Pedro , for himself and as attorney-in-fact of his wife Berlina, thru
a Special Power of Attorney purportedly executed by Berlina in his favor, executed a
Deed of Absolute Sale over the said parcel of land in favor of defendants-spouses
Claro Bautista and Nida Bautista.

As a consequence, TCT No B-37189 was cancelled and in lieu thereof, TCT No. V-
2765 was issued in the names of Spouses Claro Bautista and Nida Bautista on
March 4, 1988.

Based on the evidence presented, the signature appearing on the SPA as that of
Berlina is a forgery and consequently the Deed of Absolute Sale Executed by Pedro
in favor os Spouses Bautista is not authorized by Berlina. Thus the RTC declared the
Deed of Absolute Sale dated March 3, 1988 executed by Pedro M. Silva, for himself
and as attorney-in-fact of Berlina F. Silva, in favor of defendants-spouses Claro
Bautista and Nida Bautista over the parcel of land as null and void.

ISSUE:Whether or Not petitioners are considered as purchasers in good faith and for
value having relied upon a SPA which appears legal, valid, and genuine on its face

Whether the nullity of the deed of sale includes the one half share of the husband
gratia argumenti that the special power of attorney is a forgery and the deed of sale
executed by the husband is null and void

HELD: There is no merit to petitioners' claim that they are purchasers in good faith.

There was positive and convincing evidence that respondent did not sign the SPA,
and on the uncontroverted Certification of Dorado that respondent was in Germany
working as a nurse when the SPA was purportedly executed in 1987. The SPA being
a forgery, it did not vest in Pedro any authority to alienate the subject property
without the consent of respondent. Absent such marital consent, the deed of sale
was a nullity.

The petitioners are not buyers in good faith. A buyer for value in good faith is one
who buys property of another, without notice that some other person has a right to,
or interest in, such property and pays full and fair price for the same, at the time of
such purchase, or before he has notice of the claim or interest of some other
persons in the property. He buys the property with the well-founded belief that
the person from whom he receives the thing had title to the property and
capacity to convey it.
 To prove good faith, a buyer of registered and titled land need only show that he
relied on the face of the title to the property. He need not prove that he made further
inquiry for he is not obliged to explore beyond the four corners of the title. Such
degree of proof of good faith, however, is sufficient only when the following
conditions concur: first, the seller is the registered owner of the land; second, the
latter is in possession thereof; and third, at the time of the sale, the buyer was not
aware of any claim or interest of some other person in the property, or of any defect
or restriction in the title of the seller or in his capacity to convey title to the property.

Absent one or two of the foregoing conditions, then the law itself puts the buyer on
notice and obliges the latter to exercise a higher degree of diligence by scrutinizing
the certificate of title and examining all factual circumstances in order to determine
the seller's title and capacity to transfer any interest in the property. Failure to
exercise such degree of precaution makes him a buyer in bad faith. To prove good
faith then, petitioners must show that they inquired not only into the title of Pedro but
also into his capacity to sell.

A test has to be done whether the buyer had a choice between knowing the forgery
and finding it out, or he had no such choice at all.

A person dealing with a seller who has possession and title to the property but
whose capacity to sell is restricted, qualifies as a buyer in good faith if he proves that
he inquired into the title of the seller as well as into the latter's capacity to sell; and
that in his inquiry, he relied on the notarial acknowledgment found in the seller's duly
notarized special power of attorney. He need not prove anything more for it is
already the function of the notarial acknowledgment to establish the appearance of
the parties to the document, its due execution and authenticity. Said rule should not
apply when there is an apparent flaw afflicting the notarial acknowledgment of the
special power of attorney as would cast doubt on the due execution and authenticity
of the document; or when the buyer has actual notice of circumstances outside the
document that would render suspect its genuineness.

In the present case, petitioners knew that Berlina was in Germany at the time they
were buying the property and the SPA relied upon by petitioners has a defective
notarial acknowledgment. The SPA was a mere photocopy and we are not
convinced that there ever was an original copy of said SPA as it was only this
photocopy that was testified to by petitioner Nida Bautista and offered into evidence
by her counsel. But then said photocopy of the SPA contains no notarial seal.  There
being no notarial seal, the signature of the notary public on the notarial certificate
was therefore incomplete. It was a mere private document which petitioners cannot
foist as a banner of good faith.

All told, it was not sufficient evidence of good faith that petitioners merely relied on
the photocopy of the SPA as this turned out to be a mere private document. They
verified with Atty. Lucero whether the SPA was authentic but then the latter was not
the notary public who prepared the document. Worse, they purposely failed to
inquire who was the notary public who prepared the SPA. Finally, petitioners
conducted the transaction in haste. It took them all but three days or from March 2 to
4, 1988 to enter into the deed of sale, notwithstanding the restriction on the capacity
to sell of Pedro. In no way then may petitioners qualify as buyers for value in good
faith.

That said, we come to the third issue on whether petitioners may retain the portion of
Pedro Silva in the subject property. Certainly not. It is well-settled that the nullity of
the sale of conjugal property contracted by the husband without the marital consent
of the wife affects the entire property, not just the share of the wife.
Sps. Alfonso and Maria Angeles Cusi, Petitioners, vs. Lilia V.
Domingo,Respondent.
G.R. No. 195825; February 27, 2013 Ramona Liza L. De Vera, Petitioner, vs.
Lilia V. Domingo and Spouses Radella and Alfred Sy, Respondents G.R. No.
195871

Facts:

Lilia Domingo owned a certain real property which was vacant and unfenced.
After some time, a construction activities were being undertaken on her property
without her knowledge and more so, without her consent. She soon was able to
discover a series of anomalous transactions involving her property. It turned out that
Radella Sy was able to execute a falsified deed of sale and thereafter, acquired a
valid title to the property. Sy then divided the property into two and sold each half to
spouses De Vera and Spouses Cusi, and both buyers were able to have valid titles
to the property on their names. All of the said transactions took place without the
knowledge of the real owner Lilia Domingo. Upon learning of the circumstances,
Domingo filed a case at the RTC seeking annulment or cancellation of the titles
issued. The RTC rendered a decision, affirmed by the CA in favor of Lilia Domingo.

Issue:
What is the effect of acquiring a real property under the Torrens System of
Land Registration?

Ruling:
Under the Torrens system of land registration, the State is required to
maintain a register of landholdings that guarantees indefeasible title to those
included in the register. The State issues an official certificate of title to attest to the
fact that the person named is the owner of the property described therein, subject to
such liens and encumbrances as thereon noted or what the law warrants or
reserves. One of the guiding tenets underlying the Torrens system is the curtain
principle, in that one does not need to go behind the certificate of title because it
contains all the information about the title of its holder. This principle dispenses with
the need of proving ownership by long complicated documents kept by the registered
owner, which may be necessary under a private conveyancing system, and assures
that all the necessary information regarding ownership is on the certificate of title.
Consequently, the avowed objective of the Torrens system is to obviate possible
conflicts of title by giving the public the right to rely upon the face of the Torrens
certificate and, as a rule, to dispense with the necessity of inquiring further; on the
part of the registered owner, the system gives him complete peace of mind that he
would be secured in his ownership as long as he has not voluntarily disposed of any
right over the covered land. The petitioners were shown to have been deficient in
their vigilance as buyers of the property. It was not enough for them to show that the
property was unfenced and vacant; otherwise, it would be too easy for any registered
owner to lose her property, including its possession, through illegal occupation. In
view of the foregoing, the court affirmed the decision of the lower courts and restores
to Domingo her rights of dominion over the property