Thursday, May 26, 2011

Can a forged deed of sale of real property convey a title?

The answer, according to the Supreme Court is NO. (Sps. Bernales vs. Heirs of Sambaan, GR No. 163271; 15 January 2010). A forged deed of absolute sale is null and conveys no title. Neither does prescription bar the action to recover ownership of the subject property.

Hence, after affirming that the findings of fact of both the CA and the trial court that the signatures of supposed vendors are forgeries, the Supreme Court answers the question on the validity of the transfer of title to the petitioners (buyers) in the negative.

It declares that in Sps. Solivel v. Judge Francisco:

x x x in order that the holder of a certificate for value issued by virtue of the registration of a voluntary instrument may be considered a holder in good faith for value, the instrument registered should not be forged. 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.

x x x The innocent purchaser for value protected by law is one who purchases a titled land by virtue of a deed executed by the registered owner himself, not by a forged deed, as the law expressly states. x x x

In Instrade, Inc. v. Court of Appeals, we reiterated the said ruling maintaining that “[A]s early as Joaquin v. Madrid, x x x, we said that in order that the holder of a certificate for value issued by virtue of the registration of a voluntary instrument may be considered a holder in good faith and for value, the instrument registered should not be forged”. Indubitably, therefore, the questioned Deed of Absolute Sale did not convey any title to herein petitioners. Consequently, they cannot take refuge in the protection accorded by the Torrens system on titled lands.

Thus, we hold that with the presentation of the forged deed, even if accompanied by the owner’s duplicate certificate of title, the registered owner did not thereby lose his title, and neither does the assignee in the forged deed acquire any right or title to the said property.

Case of this nature also falls under the purview of Article 1410 of the Civil Code which provides that an action to declare the inexistence of void contracts does not prescribe.

The supposed vendor's signature having been proved to be a forgery, the instrument is totally void or inexistent as "absolutely simulated or fictitious" under Article 1409 of the Civil Code. According to Article 1410, "the action or defense for the declaration of the inexistence of a contract does not prescribe”. The inexistence of a contract is permanent and incurable which cannot be cured either by ratification or by prescription.

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