Cotoner-Zacarias vs. Spouses Alfredo and the Heirs Revilla of Paz Revilla

A conveyance by virtue of a forged signature is void ab initio and transmits no title; the action to declare the inexistence of the contract does not prescribe, and laches cannot bar it. The docket fee is measured by the allegations and prayer in the complaint, not by a value mentioned only in the pre-trial brief, and a sale of conjugal property without the husband's consent cannot bind the conjugal partnership.

The Revilla spouses owned a 15,000-square-meter unregistered parcel in Silang, Cavite under Tax Declaration No. 7971. When Alfredo Revilla needed funds for travel to Saudi Arabia, Paz Castillo-Revilla borrowed money from Amada Cotoner-Zacarias. The parties verbally agreed that Amada would possess and cultivate the land and apply earnings to the loan and realty taxes, with the property to be returned upon full payment. The land was unregistered, and the transaction predated the Family Code, so the Civil Code provisions on conjugal partnership and the rules on unregistered land framed the dispute.

The Revilla spouses, Alfredo Revilla and Paz Castillo-Revilla, owned in fee simple a 15,000-square-meter unregistered parcel of land in Silang, Cavite, covered by Tax Declaration No. 7971. In 1983, they faced financial difficulties in raising funds for Alfredo's travel to Saudi Arabia, so Paz borrowed money from Amada Cotoner-Zacarias. By verbal agreement, Amada would take physical possession of the property, cultivate it, and use the earnings from cultivation to pay the loan and realty taxes; upon full payment, Amada would return the property to the Revilla spouses.

Unknown to the Revilla spouses, Amada presented a fictitious document entitled "Kasulatan ng Bilihan ng Lupa" before the Provincial Assessor of Cavite. The document was executed on March 19, 1979, with the Revilla spouses as sellers and Amada as buyer. Consequently, Tax Declaration No. 7971 in the Revilla spouses' name was cancelled, and Tax Declaration No. 19773 was issued in Amada's name. On August 25, 1984, Amada sold the property to the spouses Adolfo and Elvira Casorla by "Deed of Absolute Sale Unregistered Land"; Tax Declaration No. 30411-A was later issued in the Casorla spouses' name. The Casorla spouses in turn executed a deed of absolute sale dated December 16, 1991 in favor of the spouses Rodolfo and Yolanda Sun, and Tax Declaration Nos. 30852-A and 18584 were issued in the Sun spouses' name.

In December 1994, Alfredo Revilla returned from Saudi Arabia. He asked Amada why she had not returned their tax declaration considering their full payment of the loan, and he then discovered that the property's tax declaration was already in the name of the Sun spouses. On February 15, 1995, the Revilla spouses were served a copy of the answer in the land registration case filed by the Sun spouses for the property. They then saw a copy of the "Kasulatan ng Bilihan ng Lupa" and noticed that their signatures as sellers were forged. They demanded cancellation of the "Kasulatan ng Bilihan ng Lupa" from Amada and all subsequent transfers of the property, its reconveyance, and restoration of its tax declaration in their name. Amada failed to take action.

On November 17, 1995, the Revilla spouses filed a complaint before the Tagaytay Regional Trial Court for annulment of sales and transfers of title and reconveyance of the property with damages against Amada, the Casorla spouses, the Sun spouses, and the Provincial Assessor of Cavite. In her answer, Amada denied that the property was used as security for the loan; she claimed that the Revilla spouses voluntarily executed the "Kasulatan ng Bilihan ng Lupa" in her favor on March 19, 1979, and that the cause of action had prescribed. The Sun spouses argued that they believed in good faith that Amada was the real owner because Amada showed them a tax declaration in her name and the "Kasulatan ng Bilihan ng Lupa"; they also argued prescription and prayed for damages against Amada by way of crossclaim.

The trial court found the "Kasulatan ng Bilihan ng Lupa" to be a fictitious document. It also found that Atty. Diosdado de Mesa, who allegedly notarized the document, was not a commissioned notary public in the province of Cavite in 1979 or at present, supported by certifications from various offices that no record of his commission existed. The Court of Appeals agreed with the trial court that Alfredo Revilla's signature in the "Kasulatan ng Bilihan ng Lupa" was forged, citing the NBI handwriting experts' report of significant differences in handwriting characteristics and the trial court's own visual analysis. Petitioner contended that the lower courts never declared Paz Castillo-Revilla's signature to be falsified.

• Antichresis and Possession: Petitioner argued that the alleged antichresis was not reduced to writing and is void under Article 2134 of the Civil Code; the claim was merely an excuse for the Revilla spouses' failure to impugn possession of the property for over 16 years.
• Validity of Sale: Petitioner maintained that the sale in her favor was established by the "Kasulatan ng Bilihan ng Lupa," the delivery of the tax declaration, and the testimony of Rosita Castillo that Paz Castillo-Revilla admitted to her father, Felimon Castillo, that she and Alfredo Revilla sold the property to Amada.
• Burden of Proving Forgery: Petitioner argued that the lower court misapplied the principle that he who alleges, not he who denies, must prove; since the Revilla spouses alleged forgery, they bore the burden, and the NBI could not ascertain the genuineness of Paz Castillo-Revilla's signature due to lack of sufficient sample signatures.
• Prescription and Laches: Petitioner contended that the Revilla spouses' claim was barred because the parties lived in a very small barangay, Alfredo Revilla returned to the Philippines twice a year while Paz Castillo-Revilla never left Silang, Cavite, and the Revilla spouses never questioned the activities on the property for more than 16 years.
• Docket Fees and Jurisdiction: Petitioner argued that the docket fees should have been based on the ₱12,000,000.00 value of the property stated in the supplemental pre-trial brief, not on the ₱50,000.00 actual damages, ₱50,000.00 moral damages, and ₱80,000.00 attorney's fees prayed for in the complaint.
• Conjugal Property and Good Faith: Petitioner argued that the property was conjugal in nature, that the court never declared Paz Castillo-Revilla's signature to be falsified, and that the sale over her half of the property could not be declared void; she added that the Sun spouses were buyers in good faith for value, making reinstatement of the property impossible.
• Public Document: Petitioner argued that she had no obligation to prove the genuineness and due execution of the "Kasulatan ng Bilihan ng Lupa" because it is a public document.

• Forgery as a Factual Finding: Respondents Revilla spouses countered that the factual issue of whether the "Kasulatan ng Bilihan ng Lupa" is a falsified document was already conclusively resolved by the lower courts and that factual findings are generally beyond the Supreme Court's power of review.
• Prescription and Laches: Respondents argued that an action or defense to declare a document null is imprescriptible, and that laches does not apply because they immediately questioned the fraudulent transfers by filing a complaint in November 1995 upon learning of the questionable documents in February 1995, after Alfredo Revilla returned from Saudi Arabia in December 1994.
• Docket Fees: Respondents contended that they paid the proper docket fees; the ₱12,000,000.00 mentioned during pre-trial was neither stated in the complaint nor awarded by the court.
• Reinstatement and Reconveyance: Respondents argued that the court did not err in ordering reinstatement of the property to them. The good-faith defense of the Sun spouses was a personal defense that could not be raised by petitioner, who was not privy to the sale between the Casorla spouses and the Sun spouses; an alternative prayer for damages could not be interpreted as an admission that reinstatement was not viable; and the transaction happened prior to the effectivity of the Family Code, so Article 172 of the Civil Code applies such that the wife cannot bind the conjugal partnership without the husband's consent, except in cases provided by law.
• No Unjust Enrichment: Respondents argued that no unjust enrichment exists since they were deprived of their property for so long.

• Prescription and Laches: Whether respondents Revilla spouses' cause of action is barred by prescription or laches.
• Docket Fees and Jurisdiction: Whether the trial court acquired jurisdiction when respondents Revilla spouses paid filing fees based on the ₱50,000.00 claim for damages in the complaint but stated in their supplemental pre-trial brief that the property is valued at ₱12,000,000.00.
• Reinstatement and Reconveyance: Whether the Court of Appeals erred in upholding the reinstatement and reconveyance of the property in favor of respondents Revilla spouses.

• Prescription and Laches: No. The action is imprescriptible under Article 1410 of the Civil Code, and laches cannot bar an imprescriptible legal right; the complaint was filed within nine months of discovery.
• Docket Fees and Jurisdiction: Yes. The trial court acquired jurisdiction because the docket fees were based on the amounts prayed for in the complaint; the ₱12,000,000.00 figure appeared only in the pre-trial brief and was not alleged in the complaint or awarded.
• Reinstatement and Reconveyance: No. The Court of Appeals did not err; the forged deed was void and conveyed no title, reconveyance was proper, the conjugal property could not be alienated without the husband's consent, and the good-faith defense was personal to the Sun spouses and unavailable for unregistered land.

• Prescription and Laches: The Court first addressed laches, defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that which by due diligence could or should have been done earlier, with four elements: (1) conduct by the defendant giving rise to the complaint; (2) delay in asserting the complainant's rights despite knowledge or notice and opportunity to sue; (3) lack of knowledge or notice by the defendant that the complainant would assert the right; and (4) injury or prejudice to the defendant if relief is granted. The lower courts found that the Revilla spouses first learned of the "Kasulatan ng Bilihan ng Lupa" in February 1995 and filed their complaint on November 17, 1995, a lapse of only nine months, which was not sleeping on their rights. More fundamentally, laches is a doctrine in equity and applies only in the absence of statutory law; Article 1410 of the Civil Code provides that "[t]he action or defense for the declaration of the inexistence of a contract does not prescribe." Relying on Heirs of Ingjug-Tiro vs. Spouses Casals, the Court held that equity should not prevail against statutory law and that laches cannot be set up to resist the enforcement of an imprescriptible legal right. Thus, the action was not barred by prescription or laches.
• Docket Fees and Jurisdiction: The Court reiterated that it is not merely the filing of the complaint but the payment of the prescribed docket fee that vests a trial court with jurisdiction over the subject matter. It recalled Manchester Development Corporation vs. Court of Appeals, where the Court condemned the practice of omitting from the prayer the amount of damages while alleging a huge amount in the body of the complaint, and warned that pleadings must specify the damages prayed for in both the body and the prayer, with such damages considered in assessing filing fees. The facts here differed: the Revilla spouses' complaint included ₱50,000.00 as actual damages in its prayer and mentioned no other amount in the body; no amended complaint increased the prayer; and the ₱12,000,000.00 figure was mentioned only during pre-trial and was neither stated in the complaint nor awarded by the trial court. The Court of Appeals thus correctly held that the trial court was not stripped of jurisdiction because the docket fees were paid based on what was prayed for. Padlan vs. Dinglasan reiterated that jurisdiction is determined by the nature of the action pleaded as appearing from the allegations in the complaint and the character of the relief sought. The documents petitioner attached showed tax declarations and deeds with values lower than ₱50,000.00, and the basis for the ₱12,000,000.00 value was unclear. Proper docket fees were therefore paid.
• Reinstatement and Reconveyance: The Court held that the antichresis argument did not resolve the case. The complaint sought annulment of sales and transfers of title on the ground of forgery, with reconveyance and damages; there was no prayer to declare a contract of antichresis. While Article 2132 defines antichresis as a contract by which the creditor acquires the right to receive the fruits of an immovable of the debtor, with the obligation to apply them to interest and then principal, and Article 2134 requires the principal and interest to be in writing, the issue was the validity of the documents that caused the subsequent transfers. Reinstatement was anchored on the lower courts' finding that the Revilla spouses' signatures as sellers in the "Kasulatan ng Bilihan ng Lupa" were forged. Forgery is a question of fact, and factual findings of lower courts are entitled to great weight and respect, and finality when supported by substantial evidence. The Court of Appeals agreed with the trial court that Alfredo Revilla's signature was forged, based on the NBI report of significant differences and the trial court's visual analysis. As to Paz Castillo-Revilla, the transaction occurred before the effectivity of the Family Code; under Article 165 of the Civil Code the husband is the administrator of the conjugal partnership, and under Article 172 the wife cannot bind the conjugal partnership without the husband's consent except in cases provided by law. Even assuming Paz Castillo-Revilla's signature was not forged, her signature alone would not bind the subject property without Alfredo Revilla's consent. The Family Code's Article 96 likewise provides that a disposition or encumbrance without the authority or written consent of the other spouse is void. Petitioner's argument that the "Kasulatan" was a public document did not relieve her of proving genuineness and due execution because the trial court found that Atty. Diosdado de Mesa was not a commissioned notary public in Cavite in 1979 or at present, supported by certifications that no record of his commission existed. Finally, the good-faith defense of the Sun spouses could not be considered because the rule that the issue of good or bad faith is relevant only where the subject of the sale is registered land and the purchase was made from a registered owner whose title is clean; the property here was unregistered, and those who purchase unregistered lands do so at their own peril. The defense was also personal to the Sun spouses and could not be borrowed by petitioner; the Sun spouses no longer raised it on appeal, making only a partial appeal regarding legal interest. The Court thus affirmed reinstatement and reconveyance.

• Forged Deed Is Void Ab Initio — A conveyance by virtue of a forged signature is void ab initio because the absence of the essential requisites of consent and cause or consideration renders the contract inexistent. Such a deed transmits no title. The Court applied this to the "Kasulatan ng Bilihan ng Lupa," whose sellers' signatures were found forged, and upheld the annulment of the transfers emanating from it.
• Imprescriptibility of Action to Declare Inexistence of Contract — Under Article 1410 of the Civil Code, the action or defense for the declaration of the inexistence of a contract does not prescribe. The Court applied this to hold that the Revilla spouses' action for annulment and reconveyance was not barred by prescription or laches despite the lapse of time.
• Laches — Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which by due diligence could or should have been done earlier. Its four elements are: (1) conduct by the defendant giving rise to the situation complained of; (2) delay in asserting the complainant's rights despite knowledge or notice and opportunity to sue; (3) lack of knowledge or notice by the defendant that the complainant would assert the right; and (4) injury or prejudice to the defendant if relief is granted. It is a doctrine in equity and applies only in the absence of statutory law; it cannot bar an imprescriptible legal right. The Court found no delay because the complaint was filed nine months after discovery, and Article 1410 precluded laches.
• Docket Fees and Jurisdiction — Payment of the prescribed docket fee vests a trial court with jurisdiction over the subject matter. The fee is assessed based on the allegations and prayer in the complaint, not on an amount mentioned only in the pre-trial brief or supplemental pre-trial brief. The Court distinguished Manchester Development Corporation vs. Court of Appeals because the complaint here included the damages prayed for in the prayer and no amended complaint increased the amount.
• Antichresis — By the contract of antichresis the creditor acquires the right to receive the fruits of an immovable of the debtor, with the obligation to apply them to the payment of interest, if owing, and thereafter to the principal of the credit. It requires an express agreement, delivery of possession to the creditor, and a written specification of the principal and interest; otherwise the contract is void. The Court discussed these requisites but held that the case was not one to declare antichresis because the complaint sought annulment of sales and transfers on the ground of forgery.
• Conjugal Partnership Consent — Under Article 165 of the Civil Code, the husband is the administrator of the conjugal partnership, and under Article 172, the wife cannot bind the conjugal partnership without the husband's consent except in cases provided by law. The Family Code similarly provides that a disposition or encumbrance of community property without the authority or written consent of the other spouse is void. The Court applied this to hold that even if Paz Castillo-Revilla's signature were not forged, her signature alone could not bind the conjugal property without Alfredo Revilla's consent.
• Good Faith in Unregistered Land — The issue of whether a buyer is in good or bad faith is relevant only where the subject of the sale is registered land and the purchase was made from a registered owner whose title is clean. The Torrens system protects those who rely in good faith on a clean registered title, but those who purchase unregistered lands do so at their own peril. The Court held that the Sun spouses' good-faith defense could not be considered because the land was unregistered and, in any event, was personal to them and could not be borrowed by petitioner.
• Forgery as a Question of Fact — The question of forgery is one of fact. Factual findings of the lower courts are entitled to great weight and respect on appeal and are accorded finality when supported by substantial evidence on the record. The Court relied on this to affirm the finding that Alfredo Revilla's signature in the "Kasulatan ng Bilihan ng Lupa" was forged.

• "Well-settled is the rule that "conveyances by virtue of a forged signature ... are void ab initio [as] [t]he absence of the essential [requisites] of consent and cause or consideration in these cases rendered the contract inexistent[.]"" — States the ratio that a forged conveyance is void ab initio and transmits no title, the core basis for annulling the transfers.
• "[t]he action or defense for the declaration of the inexistence of a contract does not prescribe." — Article 1410 of the Civil Code, relied on to hold that the Revilla spouses' action was imprescriptible and not barred by laches.
• "The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee." — States the jurisdictional rule on docket fees, which the Court applied by looking to the amount prayed for in the complaint rather than the pre-trial valuation.
• "This good faith argument cannot be considered as this case involves unregistered land. In any case, as explained by respondents Revilla spouses in their memorandum, this is a defense personal to the Sun spouses and cannot be borrowed by petitioner." — Explains why the Sun spouses' good-faith defense did not prevent reconveyance.

• Manzano, Jr. vs. Garcia, G.R. No. 179323, November 28, 2011, 661 SCRA 350 — Cited for the rule that conveyances by virtue of a forged signature are void ab initio because consent and cause or consideration are absent.
• Heirs of Ingjug-Tiro vs. Spouses Casals, 415 Phil. 665 (2001) — Cited for the principle that equity and laches cannot prevail over Article 1410's imprescriptibility of actions to declare the inexistence of a contract.
• Manchester Development Corporation vs. Court of Appeals, 233 Phil. 579 (1987) — Cited for the docket-fee rule and the warning against omitting damages from the prayer; distinguished because the complaint here stated the damages prayed for and was not amended.
• Padlan vs. Dinglasan, G.R. No. 180321, March 20, 2013, 694 SCRA 91 — Cited to reiterate that jurisdiction is determined by the nature of the action pleaded in the complaint and the relief sought.
• Diego vs. Fernando, 109 Phil. 143 (1960) — Cited for the definition and nature of antichresis as involving an express agreement for the creditor to possess the debtor's real property and apply its fruits to interest and principal.
• Bangis vs. Heirs of Adolfo, G.R. No. 190875, June 13, 2012, 672 SCRA 468 — Cited for the requirement that the principal and interest in antichresis be in writing, and for the rule that the complaint's prayer determines the cause of action.
• Deheza-Inamarga vs. Alano, 595 Phil. 294 (2008) — Cited for the rule that the question of forgery is one of fact.
• Spouses Bernales vs. Heirs of Sambaan, G.R. No. 163271, January 15, 2010, 610 SCRA 90 — Cited for the finality accorded to factual findings of lower courts when supported by substantial evidence.
• Estate of Cabacungan vs. Laigo, G.R. No. 175073, August 15, 2011, 655 SCRA 366 — Cited for the rule that good faith is relevant only in registered-land sales and that purchasers of unregistered land do so at their own peril.
• Fabrigas vs. Del Monte, 512 Phil. 627 (2005) — Cited in discussing Article 172 and the status of contracts entered by a wife without her husband's consent.

• Article 1410, Civil Code — Provides that the action or defense for the declaration of the inexistence of a contract does not prescribe; applied to reject prescription and laches.
• Article 2132, Civil Code — Defines antichresis as the creditor's right to receive the fruits of an immovable of the debtor, with the obligation to apply them to interest and then principal; discussed to distinguish the case, which was not an antichresis action.
• Article 2134, Civil Code — Requires the amount of principal and interest to be specified in writing, otherwise the antichresis is void; invoked by petitioner but held not determinative because the complaint sought annulment on forgery.
• Article 2137, Civil Code — Provides that the antichretic creditor does not acquire ownership of the real estate for non-payment of the debt; cited in the Court's discussion of antichresis.
• Article 2088, Civil Code — Prohibits the creditor from appropriating things given by way of pledge or mortgage; cited in relation to the prohibition against pactum commissorium and the limits of antichresis.
• Article 165, Civil Code — States that the husband is the administrator of the conjugal partnership; applied because the transaction predated the Family Code.
• Article 172, Civil Code — States that the wife cannot bind the conjugal partnership without the husband's consent except in cases provided by law; applied to hold that Paz Castillo-Revilla's signature alone could not bind the property.
• Article 96, Family Code — Provides that administration and enjoyment of community property belong to both spouses jointly and that a disposition or encumbrance without the other spouse's authority or written consent is void; cited as also supporting the invalidity of the sale.
• Article 256, Family Code — Provides for retroactive effect insofar as it does not prejudice or impair vested or acquired rights under the Civil Code or other laws; cited in addressing the pre-Family Code transaction.
• Supreme Court Circular No. 7 — Circularized the Manchester ruling requiring complaints to specify damages in the body and prayer for assessment of filing fees; applied and distinguished.
• Rule 45, Rules of Court — The petition for review was filed pursuant to this Rule; it was denied for lack of merit.

Antonio T. Carpio (Chairperson), Arturo D. Brion, Mariano C. del Castillo, and Jose Catral Mendoza concurred. Antonio T. Carpio also signed the certification as Acting Chief Justice.