Tolentino vs. Latagan

A forged deed of sale is void ab initio and conveys no title; however, if the property has already been transferred from the forger to an innocent purchaser for value who relies on the face of the certificate of title, the latter acquires good title that is absolutely protected, notwithstanding the original owner's claim, provided the owner's action is not barred by laches or prescription.

The subject property, Lot No. 3789 (5,028 square meters) in Roro, Sorsogon, was originally registered on May 5, 1931 under OCT No. 12494 in the names of six Jerera siblings as co-owners who inherited from Guillermo Jerera. On June 27, 1933, four of the co-owners executed a pacto de retro sale of a portion to Amado Dio for P122.00 with a two-year repurchase period. Amado later sold a portion to Flora Girao, wife of Servillano Jerera, in 1935. On December 7, 1967, Amado executed an Affidavit of Consolidation of Ownership after the Jereras failed to repurchase, and he declared the property for taxation purposes. In 1970, a Deed of Absolute Sale purportedly executed by Amado and his wife Modesta conveyed the property to Servillano Jerera. Servillano subsequently transferred the property to his daughter, Maria Jerera Latagan, in 1971 and 1977, leading to the issuance of TCT No. T-15365 in her name on October 27, 1978.

• Original Ownership and Early Transactions: The subject property, Lot No. 3789 (5,028 sqm) in Roro, Sorsogon, was covered by OCT No. 12494 registered on May 5, 1931 in the names of six co-owners (Cipriano, Dionisia, Teopisto, Servillano, Maria, and Rosa Jerera) who inherited from Guillermo Jerera. On June 27, 1933, four of the co-owners (Servillano, Dionisia, Teofilo, and Cipriano) executed an "Escritura de Venta Con Pacto de Retro" in favor of Amado Dio for P122.00 with a two-year repurchase period. On December 4, 1935, Amado sold 1,890 square meters to Flora Girao, wife of Servillano Jerera.
• Consolidation by Amado: On December 7, 1967, Amado executed an Affidavit of Consolidation of Ownership stating that the Jereras failed to repurchase within the two-year period, thereby consolidating his absolute ownership. He declared the property for taxation purposes under Tax Dec. No. 9273 on December 8, 1967.
• The Alleged 1970 Sale and Subsequent Transfers: On January 14, 1970, a Deed of Absolute Sale purportedly executed by Spouses Amado Dio and Modesta Domer conveyed the property to Servillano Jerera for P585.00. On May 25, 1971, Servillano sold the property to his daughter, Maria Jerera Latagan, for P585.00. On November 24, 1977, Servillano executed a second Deed of Absolute Sale to Maria (explained as a confirmation of the first) and a Self-Adjudication of Real Property claiming he was the sole surviving co-owner.
• Registration and Subdivision: On October 27, 1978, OCT No. 1249 was cancelled and TCT No. T-15364 was issued to Servillano, which was immediately cancelled and replaced by TCT No. T-15365 in the name of Maria Jerera Latagan. The property was subsequently subdivided into seven lots under Maria's name.
• Filing of Complaint: On May 21, 1998, petitioners (heirs of Amado Dio) filed a complaint for quieting of title, alleging that the January 14, 1970 Deed was forged and simulated, and that they were the rightful owners. They sought nullification of the 1970 deed, the 1977 deeds, and the certificates of title issued to respondents.
• Evidence of Forgery: Petitioners presented NBI Questioned Documents Report No. 196-300 and the testimony of NBI document examiner Efren B. Flores, concluding that the signatures of Amado Dio on the 1970 Deed were significantly different from his authentic signatures on sanitary permits and other documents. The trial court ordered the original documents submitted to the NBI for examination on January 13, 2000.
• Possession and Tax Payments: Maria Jerera Latagan was born on April 23, 1929 and had been in actual possession of the property since birth. She declared the property for taxation purposes under Tax Dec. No. 4826 on September 6, 1973 and paid real property taxes from 1985 to 2001. Amado Dio died in 1979 without having caused the cancellation of OCT No. 1249 or the issuance of a title in his name, and without taking steps to recover possession from the Jereras.

• Forgery of the 1970 Deed: Petitioner maintained that the Deed of Absolute Sale dated January 14, 1970 was forged and simulated, as proven by NBI Questioned Documents Report No. 196-300 and the testimony of expert witness Efren Flores, which showed significant differences between Amado Dio's signature on the questioned document and his authentic signatures on standard specimens.
• Original Documents Submitted: Petitioner argued that contrary to the CA's finding, the original copies of the questioned document and standard specimens were submitted to the NBI for examination pursuant to the trial court's January 13, 2000 Order, rendering the expert opinion reliable.
• Lack of Good Faith: Petitioner contended that Maria Jerera Latagan was not an innocent purchaser for value because she was aware of the execution of two deeds of sale (1971 and 1977) and the self-adjudication by her father, which indicated knowledge of defects in the title. They argued that the 1977 deed was void for lack of consideration, having admitted she paid nothing for it.
• Lack of Authority for Verification: Petitioner argued that Adelfa Dio Tolentino's signature on the verification and certification against forum shopping substantially complied with the Rules as all petitioners share a common interest as heirs and successors-in-interest of Amado Dio.

• Failure to Prove Forgery: Respondent countered that petitioners failed to discharge their burden of proving forgery by clear, positive, and convincing evidence. They argued that the NBI expert relied on mere photocopies of the questioned document, not originals, and that the trial court denied admission of Exhibit "K" (the 1970 Deed) for being a photocopy.
• Innocent Purchaser for Value: Respondent argued that Maria Jerera Latagan was an innocent purchaser for value who relied on the face of the certificate of title in Servillano's name. They maintained that the execution of two deeds in 1971 and 1977 was merely a confirmation of the first sale, not an indication of bad faith. They asserted that the self-adjudication affected only the Jerera co-heirs, not the petitioners.
• Laches and Prescription: Respondent argued that petitioners' action was barred by laches due to their inaction for over twenty years (from 1978 when title was issued to Maria until 1998 when the complaint was filed) despite living near the property. They contended that if treated as an action for reconveyance based on implied trust, it had prescribed after ten years from the registration of the title.

• Forgery: Whether the Deed of Absolute Sale dated January 14, 1970 was forged.
• Innocent Purchaser for Value: Whether Maria Jerera Latagan qualified as an innocent purchaser for value despite the alleged forgery of the root title.
• Laches and Prescription: Whether the petitioners' action for quieting of title was barred by laches or prescription.

• Forgery: The Deed of Absolute Sale dated January 14, 1970 was indeed forged. The original documents were submitted to the NBI for examination as ordered by the trial court on January 13, 2000, and NBI Report No. 196-300 concluded that Amado Dio's signature on the questioned document was not written by the same person as the standard specimens. An independent examination by the Supreme Court confirmed that both Amado and Modesta's signatures were forged. Consequently, the deed was void ab initio and conveyed no title to Servillano.
• Innocent Purchaser for Value: Maria Jerera Latagan was an innocent purchaser for value. Although the root deed was forged, the property had already been transferred from the forger (Servillano) to Maria, who proved she purchased the property for value in good faith without notice of the forgery. She had been in possession since birth, paid taxes, and relied on the face of the Torrens title. The execution of two deeds (1971 and 1977) was explained as a confirmation, not evidence of bad faith. The self-adjudication issue was a matter between the Jerera co-heirs, not the petitioners.
• Laches and Prescription: The action was barred by laches. Petitioners and their predecessor-in-interest slept on their rights for over twenty years (from October 27, 1978 when TCT was issued to Maria until May 21, 1998 when the complaint was filed) despite living near the property and knowing the respondents were in possession. If treated as an action for reconveyance based on implied trust under Article 1456 of the Civil Code, it prescribed in ten years from the date of registration, making the 1998 filing untimely.

• Forgery as Void Ab Initio — A forged deed of sale is null and void and conveys no title, embodying the principle of nemo dat quod non habet (no one can give what one does not have).
• Forged Document as Root of Valid Title — A forged or fraudulent document may become the root of a valid title if the property has already been transferred from the name of the owner to that of the forger, and then to that of an innocent purchaser for value. A person dealing with registered property in good faith will acquire good title from a forger and be absolutely protected by a Torrens title.
• Innocent Purchaser for Value — An innocent purchaser for value is one who buys property without notice that some other person has a right to or interest in such property and pays its fair price before having notice of adverse claims. The burden of proving bad faith lies upon one who asserts that status. A purchaser need not go beyond the certificate of title when there is no indication of cloud or vice on its face.
• Laches — Laches is the failure or neglect for an unreasonable and unexplained length of time to do that which by exercising due diligence could or should have been done earlier, giving rise to a presumption that the party entitled to assert a right has abandoned or declined to assert it.
• Prescription of Action for Reconveyance — An action for reconveyance of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed or the issuance of the certificate of title over the property. This rule applies only when the plaintiff is not in possession of the property; if the plaintiff is in actual possession, the right to seek reconveyance does not prescribe.

• "A forged deed of sale is null and void and conveys no title, for it is a well-settled principle that no one can give what one does not have; nemo dat quod non habet."
• "A forged or fraudulent document may become the root of a valid title, if the property has already been transferred from the name of the owner to that of the forger, and then to that of an innocent purchaser for value."
• "A person who deals with registered property in good faith will acquire good title from a forger and be absolutely protected by a Torrens title. This is because a prospective buyer of a property registered under the Torrens system need not go beyond the title, especially when she has no notice of any badge of fraud or defect that would place her on guard."
• "An innocent purchaser for value is one who buys property without notice that some other person has a right to or interest in such property and pays its fair price before she has notice of the adverse claims and interest of another person in the same property."
• "Laches is the failure or neglect for an unreasonable and unexplained length of time to do that which by exercising due diligence, could or should have been done earlier, thus, giving rise to a presumption that the party entitled to assert it either has abandoned or declined to assert it."

• Rufloe v. Burgos, G.R. No. 143573, January 30, 2009 — Cited for the principle that a forged deed conveys no title (nemo dat quod non habet).
• Lim v. Chuatoco, G.R. No. 161861, March 11, 2005 — Cited for the doctrine that a forged document may become the root of valid title when transferred to an innocent purchaser for value.
• Sigaya v. Mayuga, 504 Phil. 600 (2005) — Cited for the definition of an innocent purchaser for value and the burden of proving bad faith.
• Heirs of Jose Olviga v. Court of Appeals, G.R. No. 104813, October 21, 1993 — Cited for the rule on prescription of actions for reconveyance based on implied trust.
• Oldarico S. Traveno v. Bobongon Banana Growers Multi-Purpose Cooperative, G.R. No. 164205, September 3, 2009 — Cited for the rules on substantial compliance with verification and certification against forum shopping.

• Article 1456, Civil Code — Provides that if property is acquired through mistake or fraud, the person obtaining it is considered a trustee of an implied trust for the benefit of the person from whom the property comes.
• Section 1, Rule 45, Rules of Court — Limits petitions for review on certiorari to questions of law, subject to exceptions where the Court may re-examine factual findings.
• Section 22, Rule 132, Rules of Court — Provides that handwriting may be proved by comparison with writings admitted or treated as genuine.
• Section 3(c), Rule 9, Rules of Court — Provides that when a pleading states a common cause of action against several defending parties, some of whom answer and others fail to do so, the court shall try the case against all upon the answers filed.

Presbitero J. Velasco, Jr. (Chairperson), Martin S. Villarama, Jr., Bienvenido L. Reyes, and Francis H. Jardeleza.