St. Mary's Farm v. Prima Real Properties
REITERATIONFacts
The Antecedents: Petitioner St. Mary's Farm, Inc. was the registered owner of a parcel of land. Pursuant to a court decision, it authorized Rodolfo A. Agana to cede 4,000 square meters to T.S. Cruz Subdivision. Subsequently, Agana allegedly forged a board resolution authorizing him to sell the remaining 21,598 square meters to respondent Prima Real Properties, Inc. (Prima). Prima purchased the property, cancelled petitioner's title, and obtained a new title in its name. Prima later purchased the 4,000 square meter portion from T.S. Cruz Subdivision, leading to the issuance of two separate titles in Prima's name. Procedural History: Petitioner filed a complaint for annulment of sale, alleging forgery of the board resolution and bad faith on the part of Prima for not verifying Agana's authority. The Regional Trial Court (RTC) dismissed the complaint, finding Prima to be a buyer in good faith and for value. The Court of Appeals (CA) affirmed the RTC's decision. The Petition: Petitioner filed a petition for review, assailing the CA's ruling that Agana was duly authorized and that Prima was a buyer in good faith.
Issue(s)
Whether Respondent Agana was duly authorized by Petitioner to enter into the sale of the subject property with Respondent Prima; and whether there is sufficient proof of the authenticity and due execution of the Certification authorizing the sale. Whether the Certification was sufficient in form and terms to authorize Respondent Agana to sell the subject property or receive payment. Whether Respondent Prima was an innocent purchaser in good faith and for value; and whether Respondent Prima was the author of its own damage by not making reasonable inquiries into the extent of Respondent Agana's authority. Whether the sale is null and void for lack of authority on the part of Respondent Agana; and the effect of notarization. Whether the retraction of Rodolfo Agana should be given weight.
Ruling
The petition is denied. The decision of the Court of Appeals is affirmed. Prima Real Properties, Inc. is considered an innocent purchaser in good faith and for value.
Ratio Decidendi
On the issue of Respondent Agana's authority and the authenticity of the Certification: The Court held that the petitioner failed to discharge the burden of proving forgery. While petitioner presented a document examiner from the National Bureau of Investigation (NBI), the CA did not give evidentiary weight to the findings because the procedure for investigating questionable handwriting was not properly followed, and the standard signatures used for comparison were not conclusively proven to be genuine. Furthermore, the NBI examiner admitted the possibility of variations in handwriting due to factors like time and physical condition. Mere allegations of forgery are insufficient without clear and convincing evidence. On the sufficiency of the Certification: The Court found that the notarized board resolution, even if the notary public did not personally witness the appearance of the signatory, is presumed to be true and valid. Notarization converts a private document into a public document, making it admissible without further proof of authenticity. On Respondent Prima's status as an innocent purchaser in good faith and for value and the alleged lack of reasonable inquiry by Respondent Prima: The Court applied the ruling in Bautista v. Silva, stating that a buyer for value in good faith is one who buys property without notice of any right or interest of another, pays a full price, and has a well-founded belief that the seller has title and capacity to convey. Prima presented a notarized board resolution, a certification from petitioner's president, and the Transfer Certificate of Title (TCT). These documents, coupled with Prima's engagement in real estate, convinced the Court that Prima acted in good faith and was not obliged to explore beyond the face of these documents. The Court found that Prima did make reasonable inquiries by examining the notarized board resolution, the president's certification, and the TCT. The fact that checks were made payable to Rodolfo Agana, instead of the company, was deemed not significant enough to negate good faith, given the presence of the notarized authorization. The Court emphasized that a buyer presented with a duly notarized special power of attorney has a right to rely on the presumption of regularity. On the issue of whether the sale is null and void for lack of authority on the part of Respondent Agana and the effect of notarization: The Court reiterated that the non-appearance of a party before a notary public does not necessarily nullify the transaction but may expose the notary to administrative liability. To overcome the presumption of truthfulness, clear and convincing evidence is required, which the petitioner failed to provide. On the retraction of Rodolfo Agana: The Court gave no weight to Rodolfo Agana's admission, made for the first time in his Comment to the petition before the Supreme Court, that he acted without proper authority. This admission was made eight years after the case began and contradicted his consistent stance in all prior pleadings. Such a retraction was considered an afterthought and did not overcome the established facts and the principle of judicial admission, which binds the party making it unless proven to be a palpable mistake.
Main Doctrine
A buyer who relies on a duly notarized board resolution authorizing an agent to sell a property, and who pays the full purchase price, is considered an innocent purchaser for value and in good faith, even if the resolution is later alleged to be forged, provided the buyer failed to present clear and convincing evidence of forgery. The presumption of regularity of notarized documents and the principle of estoppel bind the seller.