Domingo vs. Robles

Forgery cannot be presumed and must be proven by clear and convincing evidence; a notarized deed of sale enjoys prima facie authenticity and due execution, and a registered owner who entrusts an executed transfer document and owner’s duplicate certificate to another represents to third parties that the holder is authorized to deal with the property.

Norma B. Domingo and her husband Valentino Domingo were the registered owners of Lot 19, Block 1, subdivision plan (LRC) Psd-15706, located at Cristina Subdivision, Concepcion, Marikina, covered by Transfer Certificate of Title No. 53412. Norma entrusted the sale of the lot to Flor Bacani, a friend who volunteered as agent. The controversy is governed by the Torrens system, which requires production of the owner’s certificate of title and the instrument of conveyance as a prerequisite to registration, and by the evidentiary rule that a notarized instrument carries a prima facie presumption of authenticity and due execution.

Norma B. Domingo and her husband Valentino Domingo were the registered owners of Lot 19, Block 1, subdivision plan (LRC) Psd-15706, located at Cristina Subdivision, Concepcion, Marikina, covered by Transfer Certificate of Title No. 53412. Norma discontinued the construction of her house allegedly for failure of her husband to send the necessary financial support, so she decided to dispose of the property. A friend, Flor Bacani, volunteered to act as her agent in selling the lot. Trusting Bacani, Norma delivered their owner’s copy of Transfer Certificate of Title No. 53412 to him. Later, the title was said to have been lost. In the petition for its reconstitution, Norma gave Bacani all her receipts of payment for real estate taxes. At the same time, Bacani asked Norma to sign what she recalled was a record of exhibits. Thereafter, Norma waited patiently but Bacani did not show up anymore.

On November 1, 1994, Norma visited the lot and was surprised to see respondents Robles starting to build a house on the subject lot. A verification with the Register of Deeds revealed that the reconstituted Transfer Certificate of Title No. 53412 had already been cancelled with the registration of a Deed of Absolute Sale dated May 9, 1991 signed by Norma B. Domingo and her husband Valentino Domingo, as sellers, and respondent Yolanda Robles, for herself and representing the other minor respondents, as buyers. As a consequence, Transfer Certificate of Title No. 201730 was issued on June 10, 1991 in the name of respondent Robles. Claiming not to have met any of the respondents nor having signed any sale over the property in favor of anybody, her husband being abroad at the time, Norma assumed that the Deed of Absolute Sale dated May 9, 1991 is a forgery and, therefore, could not validly transfer ownership of the lot to respondents. Hence, the case for nullity thereof and its reconveyance.

Respondents Robles responded alleging to be buyers in good faith and for value. They narrated that the subject lot was offered to them by Flor Bacani, as the agent of the owners; that after some time when they were already prepared to buy the lot, Bacani introduced to them the supposed owners and agreed on the sale; then, on May 9, 1991, Bacani and the introduced seller presented a Deed of Absolute Sale already signed by Valentino and Norma Domingo needing only Robles’ signature. Presented likewise at that meeting, where she paid full purchase price, was the original of the owner’s duplicate of Transfer Certificate of Title No. 53412.

Sometime later, respondents Robles contracted to sell the lot in issue in favor of spouses Danilo and Herminigilda Deza for ₱250,000.00. Respondent Yolanda Robles even had to secure a guardianship authority over the persons and properties of her minor children from the Regional Trial Court of Pasig in JDRC No. 2614. When only ₱20,000.00 remained unpaid of the total purchase price under the contract to sell, payment was stopped because of the letter received by Yolanda Robles that petitioner intends to sue her.

The Court of Appeals found that respondents were purchasers in good faith and for value, citing that the sale was admittedly made through petitioner’s agent; that Bacani brought with him the original of the owner’s duplicate certificate of title and some receipts; that the reconstituted title presented to the buyers was free from any liens, encumbrances or adverse interests of other persons; and that the land was unoccupied. It also found that petitioner was not able to present evidence to prove that respondents had prior knowledge of any other person’s right to or interest over the property.

• Forgery and Nullity: Petitioner argued that the Deed of Absolute Sale dated May 9, 1991 was a forgery because she and her husband did not sign it, she had not met respondents, and her husband was abroad at the time; relying on the general rule that a forged deed is void and conveys no title, she assailed the validity of the sale and sought nullity and reconveyance.
• Good Faith: Petitioner maintained that respondents were not purchasers in good faith, submitting the issue of who is a purchaser in good faith for the Court’s consideration.

• Good Faith Purchasers for Value: Respondents countered that they were buyers in good faith and for value.
• Manner of Sale: Respondents argued that the lot was offered to them by Flor Bacani as agent of the owners; that after they were prepared to buy, Bacani introduced the supposed owners and agreed on the sale; that on May 9, 1991, Bacani and the introduced seller presented a Deed of Absolute Sale already signed by Valentino and Norma Domingo needing only Yolanda Robles’s signature; and that the original owner’s duplicate of Transfer Certificate of Title No. 53412 was presented at the meeting where Yolanda paid the full purchase price.

• Forgery and Validity of the Deed of Absolute Sale: Whether the Deed of Absolute Sale dated May 9, 1991 is void because the signatures of Spouses Domingo were forged, such that it conveyed no title to respondents.
• Good Faith of Respondents: Whether respondents were purchasers in good faith and for value.
• Binding Effect of Factual Findings: Whether the factual findings of the trial court, affirmed by the Court of Appeals, are binding on the Supreme Court.

• Forgery and Validity of the Deed of Absolute Sale: No. The notarized Deed of Absolute Sale enjoys a prima facie presumption of authenticity and due execution; forgery cannot be presumed and must be proved by clear and convincing evidence, which petitioner failed to present.
• Good Faith of Respondents: The issue is unnecessary once authenticity and due execution are established; absent clear and persuasive proof of bad faith, respondents are presumed in good faith.
• Binding Effect of Factual Findings: Yes. Factual findings of the trial court, when affirmed by the Court of Appeals, are binding on the Supreme Court absent a cogent reason to deviate, and petitioner gave none.

• Forgery and Validity of the Deed of Absolute Sale: A notarized instrument enjoys a prima facie presumption of authenticity and due execution, and clear and convincing evidence must be presented to overcome that legal presumption. Forgery cannot be presumed; it was incumbent upon petitioner to prove it. Petitioner failed to do so. The Court of Appeals observed that a comparison of Norma Domingo’s signature in the Deed of Absolute Sale and her signature in the verification of the complaint manifested a striking similarity, such that without contrary proof it would be safe to conclude that the signatures were written by one and the same person. Petitioner also failed to convince the trial court that the person with whom respondent Yolanda Robles transacted was not Valentino Domingo; except for her insistence that her husband was out of the country, petitioner presented no other clear and convincing evidence that Valentino was not present at the time of the sale. Bare allegations, unsubstantiated by evidence, are not equivalent to proof. Thus, no forgery was established, and the deed remained authentic and duly executed.
• Good Faith of Respondents: In the absence of a finding of fraud and a consequent finding of authenticity and due execution of the Deed of Absolute Sale, a discussion of whether respondents were purchasers in good faith is wholly unnecessary. Without clear and persuasive substantiation of bad faith, a presumption of good faith in their favor stands. The sale was admittedly made with the aid of Bacani, petitioner’s agent, who had with him the original of the owner’s duplicate Certificate of Title to the property, free from any liens or encumbrances. The signatures of Spouses Domingo, the registered owners, appear on the Deed of Absolute Sale. Petitioner’s husband met with respondent Yolanda Robles and received payment for the property. The Torrens Act requires, as a prerequisite to registration, the production of the owner’s certificate of title and the instrument of conveyance. The registered owner who places in the hands of another an executed document of transfer of registered land effectively represents to a third party that the holder of such document is authorized to deal with the property. Accordingly, respondents acquired valid title.
• Binding Effect of Factual Findings: It is a well-established principle that factual findings of the trial court, when affirmed by the Court of Appeals, are binding on the Supreme Court. Petitioner gave no cogent reason to deviate from this rule; on the contrary, the findings of the courts a quo are amply supported by the evidence on record.

• Forgery Must Be Proven, Not Presumed — Forgery cannot be presumed; the party alleging it bears the burden of proving it by clear and convincing evidence. In this case, petitioner alleged that the signatures of Spouses Domingo in the Deed of Absolute Sale were forged, but she failed to present clear and convincing evidence to overcome the presumption of authenticity and due execution of the notarized deed.
• Prima Facie Presumption of Authenticity and Due Execution of Notarized Instruments — A notarized instrument enjoys a prima facie presumption of authenticity and due execution. Clear and convincing evidence must be presented to overcome such legal presumption. The Court applied this rule to the notarized Deed of Absolute Sale and held that petitioner failed to rebut the presumption.
• Presumption of Good Faith of Purchasers — Without clear and persuasive substantiation of bad faith, a presumption of good faith in favor of purchasers stands. The Court held that because no forgery or fraud was established, the discussion of whether respondents were purchasers in good faith was unnecessary, and their good faith was presumed.
• Torrens Act — Production of Owner’s Certificate and Instrument of Conveyance; Representation of Authority — The Torrens Act requires, as a prerequisite to registration, the production of the owner’s certificate of title and the instrument of conveyance. A registered owner who places in the hands of another an executed document of transfer of registered land effectively represents to a third party that the holder of such document is authorized to deal with the property. The Court applied this rule because petitioner entrusted the owner’s duplicate certificate and signed documents to Bacani, her agent, and respondents dealt with Bacani and were shown the original owner’s duplicate certificate.
• Factual Findings of Trial Court Affirmed by Court of Appeals Bind the Supreme Court — Factual findings of the trial court, when affirmed by the Court of Appeals, are binding on the Supreme Court absent a cogent reason to deviate. The Court found no reason to depart from the lower courts’ findings, which were amply supported by the evidence.

• "Forgery must be proven by the party alleging it; it cannot be presumed. To prevent a forged transfer from being registered, the Torrens Act requires, as a prerequisite to registration, the production of the owner’s certificate of title and the instrument of conveyance. A registered owner who places in the hands of another an executed document of transfer of registered land effectively represents to a third party that the holder of such document is authorized to deal with the property." — This passage states the core evidentiary and Torrens principles on which the denial of the petition rests, including the representation-of-authority rule arising from entrustment of an executed transfer document.
• "It is a well-settled rule, however, that a notarized instrument enjoys a prima facie presumption of authenticity and due execution. Clear and convincing evidence must be presented to overcome such legal presumption. Forgery cannot be presumed; hence, it was incumbent upon petitioner to prove it." — This excerpt defines the burden of proof applicable to petitioner’s forgery claim and explains why the notarized Deed of Absolute Sale was sustained.
• "In the absence of a finding of fraud and a consequent finding of authenticity and due execution of the Deed of Absolute Sale, a discussion of whether respondents were purchasers in good faith is wholly unnecessary. Without a clear and persuasive substantiation of bad faith, a presumption of good faith in their favor stands." — This passage explains why the good-faith issue was not decisive once forgery and fraud were not established, and it articulates the presumption of good faith in favor of purchasers.

• Blondeau vs. Nano, 61 Phil. 625, July 26, 1935 — Cited for the rule that a registered owner who places in the hands of another an executed document of transfer of registered land represents to a third party that the holder of such document is authorized to deal with the property.
• Director of Lands vs. Addison, 49 Phil. 19, March 25, 1926 — Cited for the general rule that a forged deed is void and conveys no title, which petitioner invoked but failed to substantiate.
• Bautista vs. Court of Appeals, G.R. No. 158015, August 11, 2004; Manzano vs. Perez Sr., 414 Phil. 728, August 9, 2001; Nuguid vs. Court of Appeals, 171 SCRA 213, March 13, 1989 — Cited for the prima facie presumption of authenticity and due execution of notarized instruments.
• Tenio-Obsequio vs. Court of Appeals, 230 SCRA 550, March 1, 1994 — Cited for the rule that forgery cannot be presumed and must be proven by the party alleging it.
• Ceballos vs. Intestate Estate of Emigdio Mercado, G.R. No. 155856, May 28, 2004 — Cited for the rule that factual findings of the trial court, when affirmed by the Court of Appeals, are binding on the Supreme Court.
• Heirs of Gregorio vs. Court of Appeals, 300 SCRA 565, December 29, 1998 — Cited in connection with the sale through the agent and the effect of entrusting the owner’s duplicate certificate and executed deed.
• Manzano vs. Perez Sr., 414 Phil. 728, August 9, 2001 — Also cited for the principle that bare allegations, unsubstantiated by evidence, are not equivalent to proof.

• Rule 45, Rules of Court — The petition was brought under Rule 45 as a Petition for Review of the Court of Appeals Decision.
• Torrens Act (as cited in the decision; no specific section identified) — Requires production of the owner’s certificate of title and the instrument of conveyance as a prerequisite to registration; the Court applied it to hold that a registered owner who places an executed transfer document in another’s hands represents that the holder is authorized to deal with the property.

Sandoval-Gutierrez, Corona, Carpio-Morales, and Garcia, JJ., concur.