Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=83818:56602&catid=1579&Itemid=566
Timestamp: 2019-04-19 11:18:19+00:00

Document:
G.R. No. 193517, January 15, 2014 - THE HEIRS OF VICTORINO SARILI, NAMELY: ISABEL A. SARILI,* MELENCIA** S. MAXIMO, ALBERTO A. SARILI, IMELDA S. HIDALGO, ALL HEREIN REPRESENTED BY CELSO A. SARILI, Petitioners, v. PEDRO F. LAGROSA, REPRESENTED IN THIS ACT BY HIS ATTORNEY-IN-FACT, LOURDES LABIOS MOJICA, Respondent.
THE HEIRS OF VICTORINO SARILI, NAMELY: ISABEL A. SARILI,* MELENCIA** S. MAXIMO, ALBERTO A. SARILI, IMELDA S. HIDALGO, ALL HEREIN REPRESENTED BY CELSO A. SARILI, Petitioners, v. PEDRO F. LAGROSA, REPRESENTED IN THIS ACT BY HIS ATTORNEY-IN-FACT, LOURDES LABIOS MOJICA, Respondent.
Assailed in this petition for review on certiorari1 are the Decision2 dated May 20, 2010 and Resolution3 dated August 26, 2010 of the Court of Appeals (CA) in CA-G.R. CV No. 76258 which: (a) set aside the Decision4 dated May 27, 2002 of the Regional Trial Court of Caloocan City, Branch 131 (RTC) in Civil Case No. C-19152; (b) cancelled Transfer Certificate of Title (TCT) No. 2622185 in the name of Victorino Sarili (Victorino) married to Isabel Amparo (Sps. Sarili); (c) reinstated TCT No. 559796 in the name of respondent Pedro F. Lagrosa (respondent); and (d) awarded respondent moral damages, attorney’s fees and litigation expenses.
On May 27, 2002, the RTC rendered a Decision18 finding respondent’s signature on the subject SPA as “the same and exact replica”19 of his signature in the November 25, 1999 SPA in favor of Lourdes.20 Thus, with Ramon’s authority having been established, it declared the November 20, 1992 deed of sale21 executed by the latter as “valid, genuine, lawful and binding”22 and, as such, had validly conveyed the subject property in favor of Sps. Sarili. It further found that respondent “acted with evident bad faith and malice” and was, therefore, held liable for moral and exemplary damages.23 Aggrieved, respondent appealed to the CA.
Dissatisfied, petitioners moved for reconsideration which was, however, denied in a Resolution31 dated August 26, 2010, hence, the instant petition.
The main issue in this case is whether or not there was a valid conveyance of the subject property to Sps. Sarili. The resolution of said issue would then determine, among others, whether or not: (a) TCT No. 262218 in the name of Victorino married to Isabel should be annulled; and (b) TCT No. 55979 in respondent’s name should be reinstated.
In the present case, it is undisputed that Sps. Sarili purchased the subject property from Ramos on the strength of the latter’s ostensible authority to sell under the subject SPA. The said document, however, readily indicates flaws in its notarial acknowledgment since the respondent’s community tax certificate (CTC) number was not indicated thereon. Under the governing rule on notarial acknowledgments at that time,38i.e., Section 163(a) of Republic Act No. 7160, otherwise known as the “Local Government Code of 1991,” when an individual subject to the community tax acknowledges any document before a notary public, it shall be the duty of the administering officer to require such individual to exhibit the community tax certificate.39 Despite this irregularity, however, Sps. Sarili failed to show that they conducted an investigation beyond the subject SPA and into the circumstances of its execution as required by prevailing jurisprudence. Hence, Sps. Sarili cannot be considered as innocent purchasers for value.
The due execution and authenticity of the subject SPA are of great significance in determining the validity of the sale entered into by Victorino and Ramon since the latter only claims to be the agent of the purported seller (i.e., respondent). Article 1874 of the Civil Code provides that “[w]hen a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.” In other words, if the subject SPA was not proven to be duly executed and authentic, then it cannot be said that the foregoing requirement had been complied with; hence, the sale would be void.
After a judicious review of the case, taking into consideration the divergent findings of the RTC and the CA on the matter,41 the Court holds that the due execution and authenticity of the subject SPA were not sufficiently established under Section 20, Rule 132 of the Rules of Court as above-cited.
Unrebutted too is the testimony of respondent who, during trial, attested to the fact that he and his wife, Amelia, had immigrated to the USA since 1968 and therefore could not have signed the subject SPA due to their absence.49 Further, records show that the notary public, Atty. Ramon S. Untalan, failed to justify why he did not require the presentation of respondent’s CTC or any other competent proof of the identity of the person who appeared before him to acknowledge the subject SPA as respondent’s free and voluntary act and deed despite the fact that he did not personally know the latter and that he met him for the first time during the notarization.50 He merely relied on the representations of the person before him51 and the bank officer who accompanied the latter to his office,52 and further explained that the reason for the omission of the CTC was “because in [a] prior document, [respondent] has probably given us already his residence certificate.”53 This “prior document,” was not, however, presented during the proceedings below, nor the CTC number ever identified.
Thus, in light of the totality of evidence at hand, the Court agrees with the CA’s conclusion that respondent was able to preponderate his claims of forgery against the subject SPA.54 In view of its invalidity, the November 20, 1992 sale relied on by Sps. Sarili to prove their title to the subject property is therefore void.
At this juncture, it is well to note that it was, in fact, the February 16, 1978 deed of sale which – as the CA found – was actually the source of the issuance of TCT No. 262218. Nonetheless, this document was admitted to be also a forgery.55 Since Sps. Sarili’s claim over the subject property is based on forged documents, no valid title had been transferred to them (and, in turn, to petitioners). Verily, when the instrument presented is forged, even if accompanied by the owner’s duplicate certificate of title, the registered owner does not thereby lose his title, and neither does the assignee in the forged deed acquire any right or title to the property.56 Accordingly, TCT No. 262218 in the name of Victorino married to Isabel should be annulled, while TCT No. 55979 in the name of respondent should be reinstated.
ART. 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity.
To be deemed a builder in good faith, it is essential that a person asserts title to the land on which he builds, i.e., that he be a possessor in concept of owner, and that he be unaware that there exists in his title or mode of acquisition any flaw which invalidates it.60 Good faith is an intangible and abstract quality with no technical meaning or statutory definition, and it encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to seek an unconscionable advantage. It implies honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry.61 As for Sps. Sarili, they knew – or at the very least, should have known – from the very beginning that they were dealing with a person who possibly had no authority to sell the subject property considering the palpable irregularity in the subject SPA’s acknowledgment. Yet, relying solely on said document and without any further investigation on Ramos’s capacity to sell, Sps. Sarili still chose to proceed with its purchase and even built a house thereon. Based on the foregoing, it cannot be seriously doubted that Sps. Sarili were actually aware of a flaw or defect in their title or mode of acquisition and have consequently built the house on the subject property in bad faith under legal contemplation. The case is therefore remanded to the court a quo for the proper application of the above-cited Civil Code provisions.
WHEREFORE, the petition is DENIED. The Decision dated May 20, 2010 and Resolution dated August 26, 2010 of the Court of Appeals in CA-G.R. CV No. 76258 are AFFIRMED. However, the case is REMANDED to the court a quo for the proper application of Article 449 in relation to Articles 450, 451, 452 and the first paragraph of Article 546 of the Civil Code with respect to the house Spouses Victorino Sarili and Isabel Amparo had built on the subject property as herein discussed.
Carpio, (Chairperson), Brion, Del Castillo, Perez, and JJ. concur.
* "Sarile" in some parts of the records.
** Erroneously stated as "Melincia" in the petition, rollo, p. 3; see records, p. 323.
2 Id. at 13-30. Penned by Associate Justice Celia C. Librea-Leagogo, with Associate Justices Remedios A. Salazar-Femando and Michael P. Elbinias, concurring.
4 Id. at 73-76. Penned by Judge Antonio J. Fineza.
5 Records, pp. 11 0-111.
12 The subject SPA appears to have been executed in December 1988, but the notarial certificate shows that it was notarized on September 4, 1992; see id. at 312-313.
16 See Certificate of Death; Records, p. 325.
17 See Order dated May 20, 2002; id. at 326.
21 Erroneously referred to by the RTC as “the deed of absolute sale dated January 26, 1993” (see id.) and “the deed of absolute sale executed by Ramon Rodriguez on January 26, 1992” (see id. at 76); see also CA decision, id. at 26.
32 See id. at 7-9.
33Cabuhat v. CA, 418 Phil. 451, 456 (2001); emphasis supplied.
34Sigaya v. Mayuga, G.R. No. 143254, August 18, 2005, 467 SCRA 341, 355.
35Bautista v. CA, G.R. No. 106042, February 28, 1994, 230 SCRA 446, 456; emphasis supplied.
36Abad v. Guimba, G.R. No. 157002, July 29, 2005, 465 SCRA 356, 368.
37Sps. Bautista v. Silva, 533 Phil. 627, 631-632 (2006).
38 The 2004 Rules on Notarial Practice, A.M. No. 02-8-13-SC, was promulgated on July 6, 2004, whereas the subject SPA was notarized on September 4, 1992 (see records, pp. 312-313).
40Martires v. Chua, G.R. No. 174240, March 20, 2013, 694 SCRA 38, 48-49, citing Meneses v. Venturozo, G.R. No. 172196, October 19, 2011, 659 SCRA 577, 586.
47 Records, p. 7. Respondent identified the signature appearing above his name as his (id. at 119).
55 See Complaint and Answer; records, pp. 2 and 22, repectively.
56Bernales v. Heirs of Julian Sambaan, G.R. No. 163271, January 15, 2010, 610 SCRA 90, 106.
57 See Article 2217 of the Civil Code.
58 See Article 2208 (2) of the Civil Code.
59 See Victorino’s testimony during the June 7, 2001 hearing in Civil Case No. C-19152 which, with respect to such fact (i.e., the construction of the house), remained undisputed; records, p. 182.
60Mercado v. CA, G.R. No. L-44001, June 10, 1988, 162 SCRA 75, 85.
61Ochoa v. Apeta, 559 Phil. 650, 656 (2007).

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