The Supreme Court ruled that a sale based on forged signatures is invalid, reaffirming the principle that no one can transfer rights they do not possess. This decision highlights the importance of verifying the authenticity of documents in property transactions to protect against fraud and ensure secure property ownership. This case serves as a strong warning to buyers to conduct thorough due diligence and not rely solely on notarized documents without independent verification.

The Case of the Dubious Deeds: Can a Forged Signature Transfer Property Ownership?

This case arose from a dispute over a parcel of land in Cebu City. The Reynoso siblings claimed their late father’s signatures on two Deeds of Sale were forged, leading to the illegal transfer of the property. The central question before the Supreme Court was whether these allegedly forged deeds could validly transfer ownership, and whether a subsequent buyer could claim protection as a good faith purchaser.

The petitioners, Potenciano and the Jayme spouses, argued that the Deeds of Sale were valid and enforceable, asserting the late Felipe Pareja, the alleged vendor, had the right to dispose of the property. They contested the finding of forgery, claiming the notary public’s testimony should outweigh the expert witness’s. The Court of Appeals upheld the trial court’s finding of forgery, relying heavily on the testimony of a handwriting expert from the National Bureau of Investigation (NBI). The expert’s report highlighted fundamental differences between the signatures on the questioned deeds and genuine samples from Pareja.

The Supreme Court emphasized its role in appeals is generally limited to questions of law, not fact. The Court reiterated that findings of fact by the Court of Appeals, especially when affirming those of the trial court, are generally conclusive and binding. However, this rule is not absolute, and exceptions exist when the lower courts’ findings are unsupported by evidence or demonstrate a grave abuse of discretion.

While notarized documents typically carry a presumption of regularity, this presumption can be rebutted by clear and convincing evidence. Private respondents presented Dwight Reynoso, familiar with his father’s signature, and Romeo Varona, the NBI handwriting expert, whose testimony highlighted significant divergencies between questioned signatures and genuine ones. Varona concluded that the signatures on the Deeds of Absolute Sale were forged. Although the notary public, Atty. Duterte, testified that Pareja personally appeared before him, his testimony was contradicted by other witnesses, including Potenciano himself.

The Court gave significant weight to the expert witness’s scientific examination of the signatures, while also considering the notary public’s prior attorney-client relationship with one of the parties, which raised concerns about potential bias. Building on this point, since the signature of the alleged vendor was forged, the Court stated emphatically, that no rights were transferred from him to the alleged vendees, and therefore, the Jayme spouses could not have conveyed ownership to Potenciano, stating that it is a well-settled principle that no one can give what one does not have.

The Court also rejected Potenciano’s claim to be a buyer in good faith. The burden of proving this status rests on the one making the claim, requiring proof of buying without notice of another’s right and paying a fair price. The Court found Potenciano lacked good faith, citing his failure to verify ownership with the Register of Deeds and his knowledge that the property was occupied by others, indicating he did not exercise the diligence expected of a prudent buyer. The lack of a clear title presented to Potenciano should have been a red flag during the sale.

Regarding the private respondents’ right to sue, the Court recognized the established filiation of illegitimate children through a will, even if unprobated, and a joint affidavit by one of the petitioners, affirming their status as recognized illegitimate children. Finally, the Court upheld the award of damages, finding private respondents had a cause of action due to the invalid Deeds of Sale, as well as moral and exemplary damages.

FAQs

What was the key issue in this case?	The central issue was the validity of Deeds of Sale bearing allegedly forged signatures of the property owner, Felipe Pareja, and whether a subsequent buyer could claim good faith.
What did the handwriting expert’s report conclude?	The handwriting expert from the NBI found fundamental divergencies between the signatures on the Deeds of Sale and genuine samples from Felipe Pareja, concluding the signatures were forged.
Why was the notary public’s testimony not given more weight?	While notarized documents have a presumption of regularity, this presumption was rebutted by the expert’s testimony and the fact that the notary public had a prior attorney-client relationship with one of the parties.
What is a buyer in good faith?	A buyer in good faith is someone who purchases property without notice that another person has a right or interest in it and pays a full and fair price before receiving such notice.
Why was Potenciano not considered a buyer in good faith?	Potenciano failed to verify ownership with the Register of Deeds, knew the property was occupied by others, and relied solely on unverified deeds of sale, indicating a lack of due diligence.
How did the Court establish the private respondents’ filiation to Felipe Pareja?	The Court accepted the unprobated will of Felipe Pareja and a joint affidavit from one of the petitioners, Manuel Jayme, acknowledging them as illegitimate children.
What is the significance of proving filiation in this case?	Proving filiation was essential for the private respondents to establish their legal standing (personality) to bring the suit and challenge the validity of the property transfers.
What type of damages were awarded in this case?	The Court upheld the award of moral and exemplary damages, as well as attorney’s fees and litigation expenses, to compensate the private respondents for the wrongful claim of ownership.

This case illustrates the importance of thorough due diligence in property transactions. Buyers must independently verify ownership and be wary of red flags, such as a lack of clear title or the presence of occupants other than the seller. Failure to do so can result in the loss of the property and significant financial damages.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Norgene Potenciano vs Dwight “Ike” B. Reynoso, G.R. No. 140707, April 22, 2003