Domingo v. Reed
REITERATIONFacts
The Antecedents: Respondent Guillermo Reed, an overseas contract worker, purchased a property on installment basis. His wife, Lolita Reed, managed the payments while he was abroad. A Transfer Certificate of Title (TCT) for the property was issued in their names. Guillermo allowed his brother and sister-in-law to reside on the property. Later, Eduardo Quiteves and Alberta Domingo claimed ownership of the lot, asserting they had purchased it from Lolita Reed. Guillermo denied selling the property and initiated an investigation. Procedural History: Guillermo Reed discovered that his title had been cancelled and new titles were issued to Eduardo Quiteves and spouses Danilo and Alberta Domingo. He filed a complaint for reconveyance, alleging his wife, Lolita, conspired with the other parties to forge a Special Power of Attorney (SPA) to sell the property, which he never signed as he was abroad. The trial court dismissed the case. The Court of Appeals reversed this decision, declaring the deeds of sale null and void and ordering the cancellation of the new titles, finding the buyers were not purchasers in good faith and that the SPA was a forgery. The Petition: Petitioners, including spouses Danilo and Alberta Domingo and Eduardo Quiteves, seek review of the Court of Appeals' decision via a Petition for Review on Certiorari under Rule 45 of the Rules of Court. They argue that the case should not have proceeded without jurisdiction over Lolita Reed, question the burden of proof for forgery, and dispute the applicability of certain jurisprudence regarding purchasers in good faith. They also contend that the appellate court erred in disregarding the trial court's findings on witness credibility and that their rights as purchasers in good faith should be protected even if the SPA was forged, absent proof of their conspiracy in the forgery.
Issue(s)
I. Whether the case for reconveyance filed by respondent against petitioners sans the trial court’s acquisition of jurisdiction over the person of Lolita Reed, an indispensable party, can prosper. II. Whether entrenched jurisprudence assigns the onus probandi, or burden of proof, showing forgery to the respondent after having asserted the same in his complaint. III. Whether the case of Voluntad vs. Dizon, 313 SCRA 210-211 (26 August 1999), utilized as basis to find petitioners not purchasers in good faith can apply to the case at bench; and whether the case of Veloso vs. Court of Appeals, 260 SCRA 594-595 (21 August 1996) is apt to the case at bench. IV. Whether the finding, assuming without admitting, that respondent’s signature was falsified the right of petitioners, without any evidence as co-conspirators of Lolita Reed in the forgery and as purchasers in good faith over the subject properties, can be adversely affected. V. Whether the conveyance of subject property in favor of Petitioners Danilo and Alberta Domingo and Eduardo Quiteves is valid considering that the same was executed by Petitioner-intervenor Lolita Reed and the proceeds arising therefrom were utilized to purchase things necessary for the support of family including education of petitioner-intervenor’s and Guillermo Reed’s common children pursuant to Article 161 of the Civil Code in relation to Article 115 of the same Code. VI. Whether Guillermo Reed can recover the one-half (1/2) share of the conjugal partnership despite that he had already donated the same to his and Lolita Reed’s common children pursuant to Article 162 of the Civil Code.
Ruling
The Petition and the Petition-in-Intervention are DENIED. The Decision of the Court of Appeals is AFFIRMED.
Ratio Decidendi
On the Procedural Issue of Jurisdiction over Lolita Reed: The Court held that even if the RTC had not acquired jurisdiction over Lolita Reed due to lack of summons, her voluntary appearance before the Supreme Court through a Petition-in-Intervention rendered the issue moot. The Rules of Court provide that a defendant's voluntary appearance is equivalent to service of summons. Lolita's participation in the appeal meant she recognized and accepted the Court's jurisdiction, binding her to the decision. The Court found itself in a position to rule on the merits based on the evidence and arguments presented, particularly concerning the authenticity of the Special Power of Attorney (SPA). On the Authenticity of the Special Power of Attorney: The Court affirmed the CA's finding that the SPA was a forgery. Lolita admitted sending a typewritten SPA to her husband abroad for signature and receiving it back already signed, without witnessing him sign it. The fact that the notary public's acknowledgment stated only Lolita appeared, despite an SPA requiring two parties (principal and agent), cast serious doubt on its validity. Furthermore, the Clerk of Court's certification indicated that the SPA reported by the notary was not the one submitted. Guillermo Reed consistently denied signing the SPA, and evidence presented to show his admission was deemed not credible. The SPA's date (July 8, 1986) also preceded the issuance of the TCT (July 9, 1986), further challenging its integrity. On Whether Petitioners Were Buyers in Good Faith and Application of Jurisprudence: The Court ruled that petitioners were not buyers in good faith. Spouses Domingo knew the property was conjugal and that Guillermo was estranged and working abroad. Alberta Domingo admitted that Lolita claimed authorization verbally but did not present an SPA when the Deed of Sale was executed. They relied solely on Lolita's verbal assurance. Eduardo Quiteves should have been put on guard by the SPA's acknowledgment portion, which indicated only Lolita appeared before the notary. Given the SPA's age and the circumstances, he should have verified Guillermo's whereabouts and the SPA's validity. The presence of suspicious circumstances required them to inquire further into Lolita's authority to sell, which they failed to do, thus negating their claim of good faith and innocence. The Court also addresses the applicability of Voluntad vs. Dizon and Veloso vs. Court of Appeals. On the Effect of Forgery on Petitioners' Rights: The Court addresses the impact of the forged signature on the rights of the petitioners, considering their alleged good faith and lack of involvement in the forgery. On Lolita Reed's Justification for Selling Conjugal Property: The Court rejected Lolita's argument that she was justified in selling the property even if the SPA was a forgery. Her rights over the property were inchoate prior to liquidation, and she failed to provide proof that the proceeds were used for family necessities as required by law. Unilateral binding of conjugal assets without proper authorization or proof of necessity is not permitted. Her claims regarding a donation to children were deemed irrelevant to the validity of the disputed sales. On Guillermo Reed's Ability to Recover Conjugal Property: The Court determines whether Guillermo Reed can recover his share of the conjugal property, considering his prior donation to his children.
Main Doctrine
Prospective buyers of registered land are not ordinarily required to look beyond the face of the Torrens certificate of title. However, they cannot close their eyes to known facts that should put a reasonable person on guard, and their mere refusal to face such possibilities will not make them innocent purchasers for value if the title is later found to be defective and the defect would have been discovered with ordinary prudence.