Facts:

The case involves the Spouses Claro and Nida Bautista (petitioners) and Berlina F. Silva, represented by Hermes J. Dorado in his capacity as Attorney-in-Fact (respondent). The events leading to the case began when Berlina and her husband, Pedro M. Silva, were the registered owners of a parcel of land in Valenzuela, Metro Manila, under Transfer Certificate of Title No. B-37189, registered on August 14, 1980. On March 3, 1988, Pedro, acting as Berlina's attorney-in-fact through a Special Power of Attorney (SPA) allegedly executed on November 18, 1987, sold the property to the Bautistas. Following this transaction, the title was transferred to the Bautistas, resulting in the issuance of Transfer Certificate of Title No. V-2765 on March 4, 1988.

However, Berlina later filed a complaint for annulment of the deed of sale and the transfer certificate in the Regional Trial Court (RTC) of Valenzuela, claiming that the SPA was a forgery and that Pedro lacked the authority to sel...

Facts:

Ownership and Registration of the Property

• Transfer Certificate of Title (TCT) No. B-37189 was registered in the names of Spouses Berlina F. Silva and Pedro M. Silva on August 14, 1980, covering a parcel of land in Valenzuela, Metro Manila.

Execution of the Deed of Sale

• On March 3, 1988, Pedro M. Silva, acting for himself and as attorney-in-fact for Berlina F. Silva through a Special Power of Attorney (SPA) purportedly executed on November 18, 1987, signed a Deed of Absolute Sale in favor of Spouses Claro and Nida Bautista.
• As a result, TCT No. B-37189 was canceled, and TCT No. V-2765 was issued in the names of Spouses Bautista on March 4, 1988.

Forgery of the Special Power of Attorney

• The RTC found that Berlina Silva’s signature on the SPA was forged, and thus, the Deed of Absolute Sale executed by Pedro was unauthorized by Berlina.

RTC Decision

• The RTC declared the Deed of Absolute Sale null and void, ordered the cancellation of TCT No. V-2765, and reinstated TCT No. B-37189.
• The RTC also ordered Spouses Bautista to reconvey the property to Berlina and pay attorney’s fees and costs.
• Pedro Silva was held liable to indemnify Spouses Bautista for the contract price of the sale.

CA Decision

• The Court of Appeals (CA) affirmed the RTC decision in toto, and the motion for reconsideration was denied.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Authority to File a Complaint: A complaint filed by the real party in interest (Berlina Silva) is valid, even if a representative is erroneously included. The court may drop the misjoined party without dismissing the case.
2. Good Faith of Buyers: To qualify as buyers in good faith, purchasers must show that they relied on the face of the title and conducted a reasonable inquiry into the seller’s capacity to sell. When dealing with a seller whose capacity is restricted (e.g., by marital consent requirements), the buyer must go beyond the title and investigate the seller’s authority. In this case, the SPA was forged, and the notarial acknowledgment was defective, rendering the SPA a private document. Petitioners failed to prove good faith.
3. Effect of Nullity on Conjugal Property: The sale of conjugal property without the wife’s consent is void in its entirety. The nullity affects the whole property, not just the wife’s share.

Conclusion:

The Supreme Court denied the petition, affirming the CA decision. Spouses Bautista were not buyers in good faith, and the sale was declared null and void in its entirety. The property was ordered to be reconveyed to Berlina Silva, and Pedro Silva was held liable to indemnify Spouses Bautista for the contract price.