Republic of the
Supreme Court
THIRD DIVISION
SPS.
EMMANUEL (deceased) G.R.
NO. 150066
and
EDNA CHUA and
SPS.
MANUEL and Present:
MARIA
CHUA,
Petitioners, YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
- versus - CALLEJO,
SR.,
CHICO-NAZARIO,
and
NACHURA,
JJ.
MSGR.
VIRGILIO SORIANO.
Substituted
by Sister Mary
Virgilia Celestino Soriano, Promulgated:
Respondent.
x-
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D E C I S I O N
AUSTRIA-MARTINEZ,
J.:
Before the Court is a
Petition for Review on Certiorari
under Rule 45 of the Rules of Court assailing the Decision[1]
dated September 21, 2001 of the Court of Appeals (CA) in CA-G.R. CV No. 56568
which affirmed with modification the Decision[2]
dated
The factual background of the case is
as follows:
Msgr. Virgilio
C. Soriano (Soriano) owned
a 1,600 square meter parcel of land located in Barangay
Banlat, Quezon City,
covered by Transfer Certificate of Title (TCT) No. 363471 of the Registry of
Deeds of Quezon City.
Sometime in the early months of 1988,
Soriano’s first cousin and godson, Emmanuel C. Celestino, Sr. (Celestino) asked Soriano to lend him TCT No. 363471 as a security for a loan
to be used in the business operation of Celestino’s
company, Digital Philippines, Inc.[3] Acceding to Celestino’s
request, Soriano executed on March 29, 1988 a Special
Power of Attorney (SPA) authorizing Celestino to
mortgage said property.[4]
Then came the
On
During the pendency
of the administrative reconstitution proceedings, Soriano
asked Celestino whether there was any truth to the
spreading rumor that he had already sold the subject property.[7] Celestino denied
the rumor but informed Soriano that the subject
property was mortgaged with a foreign bank.[8] Dissatisfied with Celestino's
explanation, Soriano made inquiries with the Registry
of Deeds of Quezon City[9]
and discovered, to his dismay, that TCT No. 363471 had been canceled by TCT No.
14514[10] in the name of spouses Emmanuel and Edna Chua
and spouses Manuel and Maria Chua (Chuas). By virtue of a SPA[11]
dated P500,000.00.
Claiming that his signature in the
SPA is a forgery, Soriano filed on
The defense of Celestino
is that he was duly authorized to sell the property[14]
while the Chuas contend that they are purchasers in
good faith since they bought the property from Celestino
by virtue of a SPA which was duly inscribed and annotated on the owner's
duplicate of the TCT and the tax declaration and that they have duly inspected
the property before purchasing it.[15]
Soriano died during the pendency
of the trial.[16] He was substituted by his sister, Florencia Celestino Soriano, also known as Sister Mary Virgilia
Celestino Soriano (Sis. Soriano).[17]
On
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1.
Declaring the special power of attorney dated
2. Declaring Transfer Certificate of Title No. 14514 in the name of the defendants Chuas as null and void;
3. Directing defendants Chuas to reconvey the subject property to plaintiff Soriano.
4.
Ordering defendant Celestino to pay to the plaintiff
the amounts of P100,000.00 as moral damages, P20,000.00 as
attorney’s fees and P10,000.00 as litigation expenses;
5. Ordering defendant Celestino
to pay to the defendants Chuas the amount of P500,000.00
plus interest at the legal rate from
6.
Ordering defendant Celestino to pay the defendants Chuas the amounts of P20,000.00 as attorney’s fees
and P10,000.00 as litigation expenses.
With costs against defendant Celestino.
SO ORDERED.[19]
The RTC held that Soriano's
purported signature in the SPA dated March 9, 1989 is a forgery based on the
opinion of expert witness Arcadio A. Ramos, Chief of
the Questioned Documents Division of the National Bureau of Investigation
(NBI), that a comparison of Soriano's sample
signature and the one appearing on the SPA dated March 9, 1989 revealed that they were “not written by one and the
same person;”[20] that
the Chuas are not purchasers in good faith since they
did not personally verify the title of the subject property but relied only
upon its tax declaration; that the Chuas were placed
on guard to ascertain the authenticity of the authority of Celestino
since they were not dealing with Soriano, the
registered owner.
Dissatisfied, Celestino
and the Chuas filed separate appeals with the CA,
docketed singly as CA-G.R. No. 56568.[21] On
WHEREFORE, for the lack of merit, this Court DISMISSES the appeal and AFFIRMS the appealed Decision except paragraph number 3 of the dispositive part which is hereby completely DELETED and replaced with the following: 3. The Register of Deeds of Quezon City is ordered to reinstate and reactivate Transfer Certificate of Title No. RT-3611 (363471) PR-1686 in the name of appellee Soriano.
SO
ORDERED.[23]
The CA held that that there was no cogent
reason to set aside the RTC’s reliance on the
testimony of the expert witness since there is no contrary evidence to rebut
the same. The CA also agreed with the RTC’s findings that the Chuas are
not purchasers in good faith since they failed to determine the veracity of Celestino’s alleged authority to sell the property.
No appeal was filed by Celestino. The Chuas filed the present petition anchored on the following
grounds:
THE HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION IN A WAY NOT PROBABLY IN ACCORD WITH THE LAW AND WITH THE DECISIONS OF THE HONORABLE SUPREME COURT; AND
THE HONORABLE COURT OF APPEALS HAS SO FAR DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS.[24]
The Chuas argue
that they are purchasers in good faith since they dealt with Celestino who had in his possession the owner's duplicate
title and the SPA dated March 9, 1989 with Soriano’s
purported signature; that the SPA was inscribed and annotated in the owner's
duplicate title; that since verification with the original title in the
Registry of Deeds of Quezon City was not possible,
they checked the tax declaration of the property; that the SPA dated March 9,
1989 was duly annotated in the tax declaration; that they inspected the
property and found three squatter occupants; that they paid off the two
squatters and appointed the third squatter occupant as caretaker of the
property; that Soriano was responsible for his
predicament since he entrusted the owner’s duplicate title to Celestino; that the fact that Soriano’s
purported signature in the SPA dated March 9, 1989 was later declared by the
NBI handwriting expert as a forgery is of no moment since they are not
handwriting experts and they had the right to assume that the SPA was perfectly
legal for otherwise, it could not have been annotated at the back of the
title.
Sis. Soriano,
on the other hand, avers that the Chuas are not
purchasers in good faith since they failed to check the veracity of Celestino's alleged authority to sell the property; that
had the Chuas conferred with Soriano
about the sale transaction proposed by Celestino,
they would have readily discovered the fraud being then hatched by Celestino.
Emmanuel Chua died during the pendency of the present petition.[25]
He was substituted by his surviving spouse and co-petitioner, Edna L. Chua, and
his children, Erlyn, Ericson,
Emmanuel and Elise, all surnamed Chua.[26]
The sole issue to be
resolved in the present petition is this: whether or not the Chuas
are purchasers in good faith.
The question of whether
or not a person is a purchaser in good faith is a factual matter that will
generally be not delved into by this Court, since only questions of law may be
raised in petitions for review.[27]
The
established rule is that in the exercise of the Supreme Court’s power of
review, the Court, not being a trier of facts, does
not normally embark on a re-examination of the evidence presented by the
contending parties during the trial of the case considering that the findings
of facts of the CA are conclusive and binding on the Court.[28] This rule, however, has several
well-recognized exceptions: (1) when the findings are grounded entirely on
speculation, surmises or conjectures; (2) when the inference made is manifestly
mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4)
when the judgment is based on a misapprehension of facts; (5) when the
findings of fact are conflicting; (6) when in making its findings the Court of
Appeals went beyond the issues of the case, or its findings are contrary to the
admissions of both the appellant and the appellee;
(7) when the findings are contrary to the trial court; (8) when the findings
are conclusions without citation of specific evidence on which they are based;
(9) when the facts set forth in the petition as well as in the petitioner’s
main and reply briefs are not disputed by the respondent; (10) when the
findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record; and (11) when the Court of Appeals
manifestly overlooked certain relevant facts not disputed by the parties,
which, if properly considered, would justify a different conclusion.[29]
Exception (4) is present in the instant case.
A purchaser in good faith 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 he has notice of the adverse
claims and interest of another person in the same property. The honesty of
intention which constitutes good faith implies a freedom from knowledge of
circumstances which ought to put a person on inquiry.[30] As the Court enunciated in Lim v. Chuatoco:[31]
x x x good faith consists in the possessor’s belief that the person from whom he received the thing was the owner of the same and could convey his title. Good faith, while it is always to be presumed in the absence of proof to the contrary, requires a well founded belief that the person from whom title was received was himself the owner of the land, with the right to convey it. There is good faith where there is an honest intention to abstain from taking any unconscientious advantage from another. Otherwise stated, good faith is the opposite of fraud and it refers to the state of mind which is manifested by the acts of the individual concerned.[32]
Consistently, this Court has ruled that every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to determine the condition of the property. Where there is nothing in the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not required to explore further than what the Torrens Title upon its face indicates in quest for any hidden defects or inchoate right that may subsequently defeat his right thereto.[33]
However, when a person who deals with
registered land through someone who is not the registered owner, he is expected
to look behind the certificate of title and examine all the factual
circumstances, in order to determine if the vendor has the capacity to transfer
any interest in the land.[34] He has the duty to ascertain the identity of
the person with whom he is dealing and the latter’s legal authority to convey.[35]
The law “requires a higher degree of
prudence from one who buys from a person who is not the registered owner,
although the land object of the transaction is registered. While one who buys from the registered owner
does not need to look behind the certificate of title, one who buys from one
who is not the registered owner is expected to examine not only the certificate
of title but all factual circumstances necessary for him to determine if there
are any flaws in the title of the transferor, or in his capacity to transfer
the land.”[36]
The strength of buyer’s inquiry on
the seller’s capacity or legal authority to sell depends on the proof of
capacity of the seller. If the proof of
capacity consists of a special power of attorney duly notarized, mere
inspection of the face of such public document already constitutes sufficient
inquiry. If no such special power of
attorney is provided or there is one but there appear flaws in its notarial acknowledgment, mere inspection of the document
will not do; the buyer must show that his investigation went beyond the
document and into the circumstances of its execution.[37]
In the present case, the Chuas were dealing with Celestino,
Soriano’s attorney-in-fact, who presented Soriano’s duplicate title, a SPA dated
An examination of the assailed SPA
shows that it is valid and regular on its face.
It contains a notarial seal.[38] A notarial seal is a
mark, image or impression on a document which would indicate that the notary
public has officially signed it.[39]
The long-standing rule is that documents acknowledged before a notary public
have the evidentiary weight with respect to their due execution and regularity.[40] The assailed
SPA is a notarized document and therefore, presumed to be valid and duly
executed.
Thus, the reliance by the Chuas on the notarial
acknowledgment found in the duly notarized SPA presented by Celestino
is sufficient evidence of good faith. The
Chuas 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.[41]
Moreover, the SPA was accepted by the
Register of Deeds. It was registered with the Registry of Deeds of Quezon City[42]
and inscribed and annotated in the owner's duplicate title,[43]
further bolstering the appearance of due execution and regularity.
The fact that Soriano's
purported signature in the SPA dated
When the document under scrutiny is a special power
of attorney that is duly notarized, we know it to be a public document where
the notarial acknowledgment is prima facie
evidence of the fact of its due execution.
A purchaser presented with such a document would have no choice between
knowing and finding out whether a forger lurks beneath the signature on
it. The notarial
acknowledgment has removed the choice from him and replaced it with a
presumption sanctioned by law that the affiant appeared before the notary
public and acknowledged that he executed the document, understood its import
and signed it. In reality, he is
deprived of such choice not because he is incapable of knowing and finding out
but because, under our notarial system, he has been
given the luxury of merely relying on the presumption of regularity of a duly
notarized SPA. And he cannot be faulted
for that because it is precisely that fiction of regularity which holds
together commercial transactions across borders and time.[45]
Thus,
the fact that Soriano’s signature in the SPA dated
x x x, the general rule that
the direct result of a previous void contract cannot be valid, is
inapplicable in this case as it will directly contravene the Torrens system of
registration. Where innocent third persons, relying on the correctness of
the certificate of title thus issued, acquire rights over the property, the
court cannot disregard such rights and order the cancellation of the
certificate. The effect of such outright cancellation will be to impair
public confidence in the certificate of title. The sanctity of the
Being
purchasers in good faith, the Chuas already acquired
valid title to the property. A purchaser
in good faith holds an indefeasible title to the property and he is entitled to
the protection of the law. Accordingly,
TCT No. 14514 issued in the name of the Chuas is
valid. The amount of P500,000.00,
representing the purchase price in the Absolute Deed of Sale[48]
dated
For
the Court to uphold the effects of a SPA that is rooted in falsity may be
disconcerting. Yet whatever sympathies
may be judicially appreciated for the deceived party must be balanced in deference
to the protection afforded by law to the purchaser in good faith. If such innocence or good faith is established
by the evidence, or insufficiently rebutted by the disputant, then the
corresponding duty of the Court is simply to affirm the rights of
the purchaser in good faith. It is
mischief at worse, and error at least, for a court to misread or inflate the
facts to justify a ruling for the defrauded party, no matter how wronged he or
she may be.[50]
WHEREFORE,
the petition is GRANTED. Petitioners
are hereby declared purchasers in good faith.
Accordingly, the Decision of the Court of Appeals dated
The
Decision dated
1. Declaring the
special power of attorney dated
2. Ordering Celestino to pay plaintiff the amount of P500,000.00
as actual damages, with interest rate of
6% p.a. computed from the time of the filing of the complaint until its full
payment before finality of judgment; thereafter, if the amount adjudged remains
unpaid, the interest rate shall be 12% p.a. computed from the time the judgment
becomes final and executory until fully satisfied;
3. Ordering defendant Celestino to pay to the plaintiff the amounts of P100,000.00
as moral damages, P20,000.00 as attorney’s fees and P10,000.00 as
litigation expenses;
With costs against defendant Celestino.
SO ORDERED.
No
costs.
MA. ALICIA AUSTRIA-MARTINEZ
Associate
Justice
WE CONCUR:
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson
ROMEO
J. CALLEJO, SR. MINITA V. CHICO-NAZARIO
Associate Justice
Associate Justice
ANTONIO EDUARDO B. NACHURA
Associate Justice
ATTESTATION
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
C
E R T I F I C A T I O N
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s attestation, it is hereby
certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Penned by Associate Justice Hilarion L. Aquino (now retired) and concurred in by Associate Justices Cancio C. Garcia (now Associate Justice of this Court) and Jose L. Sabio, Jr.; CA rollo, p. 160.
[2] Penned by Judge Wenceslao I. Agnir, Jr. (later Associate Justice of the Court of Appeals, now retired); Original Records, p. 378.
[3] TSN, Testimony of Msgr. Virgilio Soriano,
[4] Exhibit “I”, Folder of Exhibits, p. 14.
[5] Exhibit “J”, Folder of Exhibits, p. 16.
[6] Exhibit “A-1”, Original Records, p. 9.
[7] TSN, Testimony of Msgr. Virgilio Soriano,
[8]
[9] TSN, Testimony of Msgr. Virgilio Soriano,
[10] Exhibit “B”, Original Records, p. 10.
[11] Exhibit “D”, Folder of Exhibits, p. 14.
[12] Exhibit “C”, id. at 12.
[13] Original Records, p. 1.
[14]
[15]
[16] Original Records, p. 331.
[17]
[18] Supra note 2.
[19]
[20] Exhibit “N-2-e”, id. at 127.
[21] CA rollo, pp. 36, 97.
[22] Supra note 1.
[23]
[24] Rollo, p. 14.
[25]
[26]
[27] Sigaya v.
Mayuga, G.R. No. 143254,
[28] Heirs of Dicman v. Cariño, G.R. No. 146459, June 8, 2006, 490 SCRA 240, 261; Bank of the Philippine Islands v. Sarmiento, G.R. No. 146021, March 10, 2006, 484 SCRA 261, 267-268; Almendrala v. Ngo, G.R. No. 142408, September 30, 2005, 471 SCRA 311, 322.
[29] Heirs of Dicman v. Cariño, supra at 261-262; Bank of the Philippine Islands v. Sarmiento, supra; Almendrala v. Ngo, supra.
[30] Sigaya
v. Mayuga, supra note 27 at 354-355; Occeña v. Esponilla,
G.R. No. 156973,
[31] G.R. No. 161861,
[32]
[33] Sigaya v. Mayuga, supra note 27 at 355; Lim v. Chuatoco, supra note 31 at 318.
[34] Abad v. Guimba, G.R. No. 157002, July 29, 2005, 465 SCRA 356, 368; De Lara v. Ayroso, 95 Phil. 185, 189 (1954); Revilla and Fajardo v. Galindez, 107 Phil. 480, 485 (1960).
[35] Abad v. Guimba, supra.
[36] Abad v. Guimba, supra note 34; Bautista v. Court of Appeals, G.R. No. 106042, February 28, 1994, 230 SCRA 446, 456; Revilla and Fajardo v. Galindez, supra.
[37] Bautista v. Silva, G.R. No.
157434,
[38] Exhibit “D”, Folder of Exhibits, p. 6.
[39] Bautista v. Silva, supra note 37; 2004 Rules of Notarial Practice, Rule II, Section 13 and Rule VII, Section 2.
[40] Penson v. Maranan, G.R. No. 148630, June 20, 2006, 491 SCRA 396, 408-409; Bravo-Guerrero v. Bravo, G.R. No. 152658, July 29, 2005, 465 SCRA 244, 264; Veloso v. Court of Appeals, 329 Phil. 398, 407 (1996).
[41] Supra note 37; See 2004 Rules on Notarial Practice. See also Lim v. Chuatoco, supra note 31, at 323.
[42] Exhibit “D” (dorsal side), supra note 38.
[43] Exhibit “A”, Original Records, p. 8.
[44] Supra note 37.
[45]
[46] 353 Phil. 686 (1998); Peña, Peña and Peña, Registration of Land Titles and Deeds, 1988 Rev. Ed., p. 143.
[47]
[48] Exhibit “C”, Original Records, p. 12.
[49] Eastern Shipping Lines, Inc. v. Court of Appeals, G.R. No. 97412, July 12, 1994, 234 SCRA 78, 96-97.
[50] Lim v. Chuatoco, supra note 31, at 324.