June 30, 2014
Ponente: Sereno, C.J.
FACTS:
Bernardina Abalon (Abalon) owned a parcel of land which he sold to Restituto M. Rellama (Rellama) by virtue of a Deed of Absolute Sale. Consequently, OCT was cancelled and in lieu thereof Transfer Certificate of Title (TCT) was issued in the name of Rellama. The subject property was then subdivided into three (3) portions and was sold to Andal, Peralta and Lotivio.
Claiming that the Deed of Absolute Sale executed by Abalon in favor of Rellama was a forged document, and claiming further that they acquired the subject property by succession, they being the nephew and niece of Abalon who died without issue, plaintiff- appellees Mansueta Abalon and Amelia Abalon filed the case below against Rellama.
The court a quo rendered judgment in favor of the plaintiffs-appellees and ordered the restoration of OCT No. (O) 16 in the name of Abalon and the cancellation of the titles issued to the defendants-appellants. The fact that only a xerox copy of the purported deed of sale between Rellama and Abalon was presented before the Register of Deeds for registration and the absence of such xerox copy on the official files of the said Office made the court a quo conclude that the said document was a mere forgery.
The court ruled that Andal is a buyer in good faith for relying of the face of the title named after Rellema which subsequently registered the land to his name, while Peralta is a buyer in bad faith merely relied upon the photocopy of the deed of sale between Abalon and Rellema.
The heirs of Abalon filed a Motion for Reconsideration insofar as the CA declared the Andals to be buyers in good faith of the subject property and, thus, that the land title issued in their favor was valid. Spouses Peralta, for their part, filed a Motion for Partial Reconsideration of the said CA Decision pertaining to the portion that declared them as buyers in bad faith which accordingly nullified the title issued to them. The CA denied the MR.
ISSUE:
Whether or not a forged instrument may become the root of a valid title in the hands of an innocent purchaser for value, even if the true owner thereof has been in possession of the genuine title, which is valid and has not been cancelled.
RULING:
It is well-settled that "a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. The real purpose of the Torrens system of land registration is to quiet title to land and put a stop forever to any question as to the legality of the title."
It is well-established in our laws and jurisprudence that a person who is dealing with a registered parcel of land need not go beyond the face of the title. A person is only charged with notice of the burdens and claims that are annotated on the title.20 This rule, however, admits of exceptions, which we explained in Clemente v. Razo.
The assailed Decision of the CA held that the Andals were buyers in good faith, while Spouses Peralta were not. Despite its determination that fraud marred the sale between Bernardina Abalon and Rellama, a fraudulent or forged document of sale may still give rise to a valid title. The appellate court reasoned that if the certificate of title had already been transferred from the name of the true owner to that which was indicated by the forger and remained as such, the land is considered to have been subsequently sold to an innocent purchaser, whose title is thus considered valid. The CA concluded that this was the case for the Andals.
We have also laid down the doctrine that 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. For then, the vendee had the right to rely upon what appeared in the certificate (Inquimboy vs. Cruz, G.R. No. L-13953, July 28, 1960). In this case, Andal already registered the property under his name.
