Progressive Trade v. Antonio
REITERATIONFacts
The Antecedents: Virgilio Cebrero, registered owner of a parcel of land, died on December 19, 1989. On January 19, 1991, his wife, Secundina, and children executed a Deed of Extrajudicial Settlement allotting the land to Secundina. On September 27, 1994, Secundina sold the land to Progressive Trade and Service Enterprises (petitioner) via Deed of Absolute Sale. Titles were subsequently issued in favor of petitioner. On September 22, 1997, Maria Milagrosa Antonio (respondent) filed a complaint for Annulment of Title and Documents with Damages, claiming that Cebrero, with Secundina's consent, sold the land to her on April 30, 1985. She alleged she could not register the sale due to travel abroad and that the subsequent settlement and sale to petitioner were null and void. Procedural History: The Regional Trial Court (RTC) found petitioner to be a purchaser in good faith and dismissed the complaint against it. However, it ordered Secundina to pay respondent the sale price plus interest and attorney's fees, concluding she defrauded the respondent. Both respondent and Secundina appealed. The Court of Appeals (CA) initially affirmed the RTC decision. Upon respondent's motion for reconsideration, the CA amended its decision, finding TCT No. 225340 issued to Secundina spurious and TCT No. 225341 issued to petitioner void because petitioner was a purchaser in bad faith. The CA upheld the validity of the original title in the name of the late Virgilio D. Cebrero and ordered the issuance of a new title in favor of respondent. The Petition: Petitioner filed a petition for review, arguing that the CA erred in ordering the cancellation of its title, in not ruling that it purchased the property in good faith and for value, in not upholding the indefeasibility of title, in ruling that the circumstances did not constitute a double sale, and in not finding that respondent forfeited her rights due to laches, estoppel, and prescription, and that she had no cause of action against petitioner.
Issue(s)
Whether the Court of Appeals erred in ordering the cancellation of TCT No. 225341 issued in favor of the petitioner. Whether the petitioner purchased the subject property in good faith and for value. Whether the Court of Appeals erred in not upholding the principle of indefeasibility of title under the Torrens system; and whether the attendant circumstances constituted a case of double sale. Whether the respondent forfeited her rights due to laches, estoppel, and prescription. Whether the respondent has a cause of action against the petitioner.
Ruling
The petition is meritorious. The Amended Decision of the Court of Appeals dated March 26, 2007 is REVERSED and SET ASIDE. Civil Case No. 97-85178 lodged at the Regional Trial Court of Manila Branch 35 is DISMISSED.
Ratio Decidendi
On the cancellation of TCT No. 225341: The Court found that the purported signature of Virgilio Cebrero in the Deed of Absolute Sale to Milagrosa was not genuine, therefore the Deed of Absolute Sale in Milagrosa's favor was not genuine. Consequently, the CA erred in cancelling the title issued to the petitioner. On the petitioner's good faith purchase: Since the Court found that the Deed of Absolute Sale in Milagrosa's favor was not genuine, it transmitted no rights to her. Consequently, the subject land, which was part of Cebrero's estate allotted to Secundina, was validly sold by Secundina to the petitioner. The Court held that petitioner was a purchaser in good faith and for value, as the original sale to Milagrosa was found to be spurious. On the principle of indefeasibility of title and double sale: The Court found that there was no double sale because the first purported sale to Milagrosa was found to be a forgery. Therefore, the principle of indefeasibility of title under the Torrens system, as applied to a legitimate purchaser in good faith, was upheld in favor of the petitioner. The title issued to Secundina, and subsequently to petitioner, were considered valid as they stemmed from a valid settlement of estate and a subsequent valid sale. On laches, estoppel, and prescription: Given that the primary sale to Milagrosa was deemed a forgery and thus transmitted no rights, the claims of laches, estoppel, and prescription against petitioner were rendered moot. The Court found that Milagrosa's claim was questionable and dubious from the outset, and her failure to register the purported sale for an extended period further weakened her position, especially when contrasted with the petitioner's timely registration and good faith purchase. On the cause of action against the petitioner: As the Deed of Absolute Sale to Milagrosa was found to be spurious, she had no valid cause of action against the petitioner, who was determined to be a purchaser in good faith and for value.
Main Doctrine
A forged deed of sale transmits no title. Consequently, a subsequent sale by the purported seller, even if registered, is void. The buyer in the forged sale cannot be considered a purchaser in good faith.