Primary Holding

The Supreme Court held that while the revocation of the donation was valid due to the donee's ingratitude through forgery, the petitioner-spouses were purchasers in good faith. Consequently, the deed of absolute sale to the petitioners and their title were upheld, but the fraudulent donee was held liable for damages to the original donor.

Background

Pedro Calapine donated land to his niece, Helen Doria. Later, he claimed that a second deed of donation conveying the entire property was forged by Doria and sought to revoke the donation due to her ingratitude. Doria then sold the land to Spouses Eduarte. The lower courts sided with Calapine, revoking the donation and declaring the Eduartes buyers in bad faith, leading to this appeal.

Facts

• 1. Pedro Calapine owned land covered by OCT No. P-2129.
• 2. He executed a Deed of Donation for half the land to his niece Helen Doria in April 1984.
• 3. A second deed of donation dated July 1984, purportedly signed by Calapine, ceded the entire land to Doria, leading to the cancellation of OCT No. P-2129 and issuance of TCT No. T-23205 in Doria's name.
• 4. Doria donated a portion to Calauan Christian Reformed Church, Inc.
• 5. Doria sold the remaining portion to Spouses Eduarte in March 1988, who were issued TCT No. T-27434.
• 6. Calapine claimed the second deed of donation was a forgery and sued to revoke the donation to Doria and nullify the subsequent sale to Eduartes.
• 7. Expert handwriting analysis presented conflicting testimonies on the genuineness of Calapine's signature on the second deed.
• 8. Lower courts found the second donation was forged and Eduartes were buyers in bad faith due to the presence of occupants on the land.

Arguments of the Petitioners

• 1. The revocation of the first deed of donation was improper because falsification of a public document is not an offense against the donor's person or property as required by Article 765 of the Civil Code for revocation based on ingratitude.
• 2. The Court of Appeals erred in giving more weight to the NBI handwriting expert over the PCCL expert.
• 3. They were purchasers in good faith as they relied on the Torrens Title of Helen Doria and mere presence of tenants did not equate to bad faith.
• 4. The Court of Appeals erred in finding them buyers in bad faith.

Arguments of the Respondents

• 1. Helen Doria committed ingratitude by falsifying Pedro Calapine’s signature on the second Deed of Donation, which is a valid ground for revocation under Article 765 of the Civil Code.
• 2. The Court of Appeals correctly gave more credence to the NBI handwriting expert's testimony, which proved the forgery.
• 3. Spouses Eduarte were buyers in bad faith as they failed to exercise due diligence by not inquiring about the occupants on the land, indicating possible adverse claims.

Issues

• 1. Is falsification of a deed of donation an act of ingratitude that warrants revocation of a donation under Article 765 of the Civil Code?
• 2. Was the Court of Appeals correct in upholding the finding of forgery based on handwriting analysis?
• 3. Were Spouses Eduarte purchasers in bad faith of the donated property?
• 4. Is the revocation of the first deed of donation valid?

Ruling

• 1. Yes, falsification of the deed of donation is an act of ingratitude because it is a crime that offends the donor, demonstrating a lack of appreciation for the liberality extended and thus falls within the grounds for revocation due to ingratitude under Article 765 of the Civil Code.
• 2. Yes, the Court of Appeals correctly upheld the finding of forgery as it properly gave more weight to the more thorough and credible testimony of the NBI handwriting expert compared to the PCCL expert.
• 3. No, Spouses Eduarte were purchasers in good faith. They relied on the clean title of Helen Doria, and the mere presence of tenants did not automatically impute bad faith nor necessitate further investigation given the Torrens system's principles.
• 4. Yes, the revocation of the first deed of donation (Exhibit B) was implicitly upheld as the Supreme Court did not reverse this aspect of the lower court rulings, focusing instead on reversing the finding of bad faith against the Eduartes and adjusting the remedy.

Doctrines

• 1. Donation: An act of liberality where a person gratuitously disposes of a thing or right in favor of another.
• 2. Ingratitude as Ground for Revocation of Donation: Donee committing an offense against the person or property of the donor justifies revocation. This includes acts showing a lack of appreciation for the donor's generosity.
• 3. Forgery: Falsification of a document, in this context, a deed of donation, is considered an offense showing ingratitude.
• 4. Good Faith Purchaser: One who buys property for value, without notice of another's claim or interest in the property and after diligent inquiry. Reliance on a clean Torrens Title generally indicates good faith.
• 5. Torrens System: A system of land registration where a certificate of title is conclusive evidence of ownership. Purchasers are generally not required to go beyond the certificate of title.
• 6. Assurance Fund: A fund to compensate those who lose land due to fraudulent registration, but only when recourse against the fraud perpetrators fails due to insolvency.

Key Excerpts

• 1. "A donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it. On the part of the donor, it is an exercise of one's generosity."
• 2. "Offense Against Donor. All crimes which offend the donor show ingratitude and are causes for revocation."
• 3. "Although generally a forged or fraudulent deed is a nullity and conveys no title, however there are instances when such a fraudulent document may become the root of a valid title. One such instance is where the certificate of title was already transferred from the name of the true owner to the forger, and while it remained that way, the land was subsequently sold to an innocent purchaser."

Precedents Cited

• 1. People vs. Domasian: Cited for the standard of evaluating handwriting expert opinions, emphasizing detailed explanation of discrepancies and characteristics, beyond mere statements.
• 2. Abad vs. Court of Appeals: Cited for the principle that mere possession does not defeat a Torrens title.
• 3. Philippine National Bank vs. Court of Appeals: Cited to illustrate the doctrine that a forged deed can be the root of a valid title if the property is subsequently sold to an innocent purchaser after title transfer.
• 4. Tenio-Obsequio vs. Court of Appeals: Cited regarding good faith purchasers and their protection under the Torrens system, and the recourse of the true owner against the fraud-doer and potentially the Assurance Fund.
• 5. Pino vs. Court of Appeals: Cited in relation to the rights of innocent purchasers for value and protection under the Torrens System.

Statutory and Constitutional Provisions

• 1. Article 725, New Civil Code: Defines donation.
• 2. Article 765, New Civil Code: Outlines grounds for revocation of donation by reason of ingratitude.
• 3. Revised Penal Code, Title Nine - Crimes Against Personal Liberty and Security: Referenced to show that while falsification is not directly against person/property in RPC classification, it is still an offense showing ingratitude in donation context.