G.R. No. 157701 - Spouses Domingo vs. Reed

Guillermo Reed, an overseas contract worker from 1978 to 1986, purchased a 166-square-meter property on an installment basis from the Government Service Insurance System (GSIS).
The property, located at MRR Road, Mangahan, Pasig, was originally titled under TCT No. 58195 in the name of Lolita Reed, his wife, as she handled payments for him while he was abroad.
Guillermo Reed allowed his brother Dominador and his wife Luz to reside in the house constructed on the property.

In subsequent years, several transactions took place involving the subject property:

Sale to Spouses Danilo and Alberta Domingo covering a 41.50-square-meter portion located in the southwest section.
Sale to Eduardo Quiteves covering an 86-square-meter portion located at the northern part of the property.
A third sale was made in favor of Spouses Ardaniel and Natividad Villanera, although the Court later noted defects in service of summons to them, affecting jurisdiction over their persons.

The deeds of sale executed by Lolita Reed were based on a Special Power of Attorney (SPA) allegedly authorizing her to sell the property or portions thereof on behalf of her husband.
Problems arose as the SPA’s authenticity was later questioned, and inconsistencies were noted in its execution, including the mismatch of dates (the SPA dated July 8, 1986, but TCT No. 58195 was issued on July 9, 1986) and irregularities in the notarization process.

Respondent Guillermo Reed later filed a complaint for reconveyance alleging that the SPA was forged and that he had not authorized any sale, emphasizing that he did not sign or consent to the SPA.
Evidence indicated that Lolita Reed merely sent a typewritten SPA to him while he was abroad, with the document later being “returned” already signed by Guillermo, a fact she herself later admitted, thereby casting doubt on the document’s authenticity.
The factual record reveals that during a barangay meeting, conflicting statements were made regarding the sale, with Guillermo Reed denying any intention to sell and the alleged admission contained in the minutes proving unreliable.

The trial court initially rendered judgment in favor of the buyers—Spouses Domingo, Eduardo Quiteves, and others—by dismissing Guillermo Reed’s complaint and sustaining the transfers of ownership.
On appeal, the Court of Appeals reversed the decision of the trial court on several grounds:

It declared that neither the sale to the Domingo spouses nor to Eduardo Quiteves evidenced proper authority because of the lack of corroboration regarding the SPA.
It held that the purchasers failed to exercise the necessary inquiry to ensure that Lolita Reed had the authority to sell conjugal property.
Consequently, the Court of Appeals declared the deeds of sale null and void, ordered the cancellation of the Transfer Certificates of Title (TCTs) issued in the names of the concerned petitioners, and reinstated TCT No. 58195 in the name of Lolita Reed, married to Guillermo Reed.

The case reached the Supreme Court via a Petition for Review on Certiorari under Rule 45 of the Rules of Court, with additional issues raised by a Petition-in-Intervention by Lolita Reed.

Whether the trial court acquired jurisdiction over Lolita Reed, an allegedly indispensable party, given that she was not served summons initially but later appeared voluntarily by filing a Petition-in-Intervention.

Whether the SPA relied upon by Lolita Reed is authentic or forged, especially in light of the inconsistencies in its execution and notarization.
Whether the absence of direct personal appearance by Guillermo Reed during the notarization process affects the validity of the SPA.

Validity of the Sale Transactions and Justification for Selling Conjugal Property

Whether Lolita Reed had the requisite authority to sell the conjugal property without her husband’s consent.
Whether her justification—that the proceeds were used for the support and maintenance of the family—sufficiently legitimizes the sale despite the potential forgery of the SPA.

Whether petitioners (Spouses Domingo and Eduardo Quiteves) are considered innocent purchasers for value and buyers in good faith.
Whether their failure to further inquire into possible defects in the vendor’s certificate of title and the authenticity of the SPA removes the protection normally granted to bona fide purchasers.

Issues concerning whether the conveyance executed by Lolita Reed was valid in light of her alleged use of the sales proceeds for necessary family support.
Whether Guillermo Reed can recover his one-half share of the conjugal partnership, notwithstanding the claim that he had already donated his share to their common children.