G.R. No. 193517 - Heirs of Sarili vs. Lagrosa

Respondent Pedro F. Lagrosa, through his attorney-in-fact Lourdes Labios Mojica via Special Power of Attorney (SPA) dated November 25, 1999, filed a complaint on February 17, 2000 before the RTC of Caloocan City, Branch 131.
He alleged ownership of a parcel of land in Caloocan City covered by TCT No. 55979 since acquisition on November 29, 1974, and claimed that a falsified Deed of Absolute Sale dated February 16, 1978 resulted in the issuance of TCT No. 262218 in favor of Victorino Sarili and Isabel Amparo.

Spouses Victorino and Isabel Sarili maintained they purchased the property from Ramon B. Rodriguez under a purported SPA (subject SPA) and a Deed of Absolute Sale dated November 20, 1992. They denied any fraud in the 1978 deed and claimed to be innocent purchasers for value.
They counterclaimed for moral and exemplary damages and attorney’s fees, alleging the suit was baseless.

Victorino Sarili died during the proceedings and was substituted by his heirs (petitioners).
On May 27, 2002, the RTC ruled the subject SPA genuine by comparison with the November 25, 1999 SPA, upheld the November 20, 1992 deed of sale as valid, and found respondent acted in bad faith, awarding moral and exemplary damages to petitioners.

On May 20, 2010, the CA set aside the RTC decision, finding TCT No. 262218 issued on the basis of the February 16, 1978 deed (not the 1992 deed), and held that the 1978 deed and subject SPA were forged.
The CA declared both deeds and the SPA void, ordered cancellation of TCT No. 262218, reinstatement of TCT No. 55979 in respondent’s name, and awarded moral damages, attorney’s fees, and litigation expenses.
Petitioners’ motion for reconsideration was denied on August 26, 2010.

Was there a valid conveyance of the subject property to the Spouses Sarili such that TCT No. 262218 should stand, or must it be annulled and TCT No. 55979 reinstated in respondent’s name?