In the Philippines, a contract involving a forged signature is considered void from the very beginning. This means it has no legal effect, and no rights or obligations arise from it. This principle was underscored in the case of Amada Cotoner-Zacarias v. Spouses Alfredo Revilla, where the Supreme Court reaffirmed that conveyances based on forged signatures lack the essential elements of consent and cause, rendering the contract inexistent. The court emphasized that actions to declare the inexistence of a contract due to forgery are imprescriptible, meaning they can be brought at any time, regardless of how long ago the forgery occurred. This decision protects property owners from fraudulent transfers and ensures the integrity of land transactions.

Can a Forged Deed Transfer Title? The Case of the Contested Cavite Land

The case revolves around a 15,000-square-meter parcel of unregistered land in Silang, Cavite, originally owned by Spouses Alfredo and Paz Revilla. In 1983, facing financial difficulties, Paz Revilla borrowed money from Amada Cotoner-Zacarias, with a verbal agreement that Amada would possess and cultivate the land, using the earnings to pay off the loan and property taxes. Once the loan was fully paid, Amada was to return the property to the Revilla spouses.

Unbeknownst to the Revilla spouses, Amada presented a fictitious document titled “Kasulatan ng Bilihan ng Lupa” (Deed of Sale) to the Provincial Assessor of Cavite. This document, purportedly executed in 1979, showed the Revilla spouses selling the property to Amada. Based on this document, the tax declaration was transferred to Amada’s name. Amada then sold the property to Spouses Adolfo and Elvira Casorla in 1984, who in turn sold it to Spouses Rodolfo and Yolanda Sun in 1991. In 1994, Alfredo Revilla discovered the tax declaration was in the Sun spouses’ name, leading to the revelation of the forged deed of sale.

The Revilla spouses filed a complaint in 1995, seeking annulment of the sales and reconveyance of the property. Amada claimed the sale was legitimate and that the Revilla spouses’ action had prescribed. The Sun spouses argued they were buyers in good faith. The Regional Trial Court ruled in favor of the Revilla spouses, declaring the sales void due to the fictitious document. The Court of Appeals affirmed this decision. The central legal question before the Supreme Court was whether the lower courts erred in ordering the reinstatement and reconveyance of the property to the Revilla spouses, given the claims of prescription, improper docket fees, and good faith purchase.

The Supreme Court addressed three key issues. First, it considered whether the Revilla spouses’ cause of action was barred by prescription or laches. The Court noted that laches, an equitable doctrine based on delay, only applies in the absence of statutory law. Article 1410 of the Civil Code states that actions for the declaration of the inexistence of a contract do not prescribe.

Laches is a doctrine in equity and our courts are basically courts of law and not courts of equity.  Equity, which has been aptly described as “justice outside legality,” should be applied only in the absence of, and never against, statutory law.  Aequetas nunguam contravenit legis.  The positive mandate of Art. 1410 of the New Civil Code conferring imprescriptibility to actions for declaration of the inexistence of a contract should pre-empt and prevail over all abstract arguments based only on equity.  Certainly, laches cannot be set up to resist the enforcement of an imprescriptible legal right, and petitioners can validly vindicate their inheritance despite the lapse of time.

The Revilla spouses filed their complaint within nine months of discovering the forged document, which the Court deemed a reasonable time. Therefore, neither prescription nor laches barred their claim.

Second, the Court addressed the issue of docket fees, which petitioner argued were insufficient because the Revilla spouses initially paid fees based on a smaller claim for damages, rather than the alleged market value of the land. The Court found that the Revilla spouses paid the proper fees based on the amounts stated in their complaint’s prayer. Citing Padlan v. Dinglasan, the Court reiterated that jurisdiction is determined by the nature of the action as pleaded in the complaint and the relief sought.

What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint [and] [t]he averments therein and the character of the relief sought are the ones to be consulted.

Since the complaint’s prayer only included a specific amount for actual damages, the docket fees paid were deemed appropriate, and the trial court had jurisdiction.

Third, the Court examined the validity of the reinstatement and reconveyance order. The petitioner argued that the alleged agreement between the parties was an antichresis, which requires a written contract to be valid. Article 2132 of the Civil Code defines antichresis as a contract where the creditor acquires the right to receive the fruits of the debtor’s immovable property, applying them to the interest and principal of the debt.

By the contract of antichresis the creditor acquires the right to receive the fruits of an immovable of his debtor, with the obligation to apply them to the payment of the interest, if owing, and thereafter to the principal of his credit.

However, the Court clarified that the central issue was not the nature of the relationship, but the validity of the “Kasulatan ng Bilihan ng Lupa.” The lower courts found that Alfredo Revilla’s signature on the deed was forged, a factual finding entitled to great weight.

The Court also addressed the argument that even if Alfredo’s signature was forged, Paz Revilla’s share of the conjugal property should be bound by the sale. The Court explained that, under the Civil Code (applicable at the time of the transaction), the husband is the administrator of the conjugal partnership, and the wife cannot bind the partnership without his consent. Thus, even if Paz’s signature were valid, the sale would still be void without Alfredo’s consent.

The Court then dismissed the petitioner’s argument that the Sun spouses were buyers in good faith. The Court clarified that the good faith argument applies only to registered land under the Torrens system. As the land in question was unregistered, the Sun spouses could not claim protection as good faith purchasers.

FAQs

What was the key issue in this case?	The key issue was whether a sale based on a forged signature could transfer ownership of land, and whether the original owners could reclaim the property despite the passage of time and subsequent transfers.
What does it mean for a contract to be void ab initio?	A contract that is void ab initio is invalid from the moment it is created. It has no legal effect, and no rights or obligations arise from it, as if it never existed.
Is there a time limit to file a case for a forged document?	No, according to Article 1410 of the Civil Code, an action to declare the inexistence of a contract is imprescriptible. This means there is no time limit to file a case to declare a contract based on forgery as void.
What is the significance of the Torrens system?	The Torrens system is a land registration system designed to guarantee the integrity of land titles. It aims to strengthen public confidence in land transactions, primarily concerning the purchase of registered land.
Can a wife sell conjugal property without her husband’s consent?	Under the old Civil Code, which applied at the time of this transaction, the wife could not bind the conjugal partnership without the husband’s consent. Thus, the sale would be void.
What is the meaning of ‘laches’?	Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do what should have been done earlier. It is based on equity and generally applies when a party delays asserting their rights.
What is an antichresis agreement?	An antichresis agreement is a contract where a creditor acquires the right to receive the fruits of the debtor’s immovable property, applying them to the payment of interest and principal of the debt.
Why was the good faith of the Sun spouses not considered?	The good faith argument typically applies only to registered land under the Torrens system. As the land in question was unregistered, the Sun spouses could not claim protection as good faith purchasers.

The Supreme Court’s decision in Amada Cotoner-Zacarias v. Spouses Alfredo Revilla reinforces the principle that forged documents cannot serve as the basis for valid property transfers. It also clarifies that actions to declare the inexistence of contracts due to forgery are imprescriptible. This ruling provides significant protection to property owners and underscores the importance of verifying the authenticity of documents in land transactions.

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: Amada Cotoner-Zacarias v. Spouses Alfredo Revilla, G.R. No. 190901, November 12, 2014