Title
Spouses Domingo vs. Reed
Case
G.R. No. 157701
Decision Date
Dec 9, 2005
Guillermo Reed contested his wife Lolita's unauthorized sale of their conjugal property using a forged SPA. The Supreme Court ruled the sales null, citing forgery, lack of spousal consent, and buyers' bad faith, affirming the CA's decision.
innocent purchasers for value
defective title
good faith
A

Case Summary (G.R. No. 157701)

Factual Background

Respondent Guillermo Reed purchased, on installment from the Government Service Insurance System, a 166 square meter lot in Mangahan, Pasig. While he worked overseas from 1978 to 1986, his wife, Lolita Reed, paid the consideration and on July 9, 1986 TCT No. 58195 issued in her name, described as “Lolita R. Reed, married to Guillermo Reed.” Guillermo allowed his brother Dominador and Dominador’s wife to occupy the house on the lot. In December 1991, a barangay proceeding arose upon the complaint of Eduardo Quiteves, who claimed ownership of the lot; the matter led Guillermo to verify title records at the Register of Deeds of Pasig. He discovered TCT No. 58195 cancelled and obtained copies of documents allegedly showing a Special Power of Attorney (SPA) dated July 8, 1986 purportedly executed by him, and several deeds of sale by Lolita Reed conveying portions of the lot to the petitioners and to spouses Ardaniel and Natividad Villanera. Titles later issued included TCT Nos. 84565, 84566, and 84567 in the names of the vendees.

Trial Court Proceedings

On March 8, 1994 Guillermo Reed filed a complaint for reconveyance against Lolita Reed, the vendees including Spouses Danilo and Alberta Domingo and Eduardo Quiteves, the spouses Villanera, and the Register of Deeds of Pasig, alleging that the SPA was forged, that he did not sign it and did not appear before the notary public, and that the vendees acted in bad faith. Quiteves and the Domingo spouses filed answers asserting the validity of the sales, invoking a July 26, 1986 letter of consent and the presumption of regularity of notarized instruments, and denying bad faith. Service problems arose because Lolita was not served and the Villaneras were served through Mrs. Alberta Domingo. After trial, the Regional Trial Court dismissed Guillermo’s complaint for lack of merit and ruled for the vendees and the Register of Deeds.

Ruling of the Court of Appeals

The Court of Appeals reversed the RTC. It treated as validly before it the cases involving the Domingo spouses and Quiteves, but held that the Villaneras had not been validly served so the RTC lacked personal jurisdiction over them. The CA found the SPA to be a forgery. It held that the Domingo spouses and Quiteves were not purchasers in good faith because they knew the property was conjugal, knew that Lolita and Guillermo were estranged and that Guillermo was abroad, yet they failed to inquire into Lolita’s authority to convey. The CA also relied on a certification from the Clerk of Court of the RTC of Pasig that the SPA submitted was not the same document as the one in the notarial report of Atty. Macario Cruz. The CA declared the deeds of sale to the Domingo spouses and to Quiteves null and void, ordered cancellation of TCT Nos. 84565 and 84567, and directed reinstatement of TCT No. 58195 in the name of Lolita Reed, married to Guillermo Reed, insofar as it covered the sold portions.

Issues Presented to the Supreme Court

The petition framed several questions which the Court reduced to one procedural and three substantive issues: (1) whether jurisdiction over the person of Lolita Reed had been acquired; (2) whether the SPA was authentic or forged; (3) whether Lolita’s asserted justification for selling conjugal property was tenable; and (4) whether the petitioners were buyers in good faith entitled to protection.

Parties' Contentions

The petitioners urged that the RTC never acquired jurisdiction over Lolita, an indispensable party, because she had not been served; they contended that the SPA had not been shown to be forged and that the vendees relied on the presumption of regularity of the notarized SPA and acted in good faith. They argued further that no proof showed a conspiracy between them and Lolita to effect any forgery. Lolita Reed in intervention contended that even if the SPA were defective, her sale was justified because the proceeds were used for family necessities and education under Article 161 of the Civil Code, and she asserted a donation by Guillermo under Article 162. Guillermo Reed maintained that he never signed the SPA, that he never appeared before the notary, and that the SPA and deeds were tainted by forgery and conspiracy.

Supreme Court's Disposition on Jurisdiction

The Supreme Court held that jurisdiction over Lolita Reed had been acquired because she voluntarily appeared before the Court by filing a Petition-in-Intervention. The Court applied the rule that a defendant’s voluntary appearance is equivalent to service of summons (Rule 14 and Rule 20, Rules of Court). Therefore any alleged lack of service at the trial level became moot and Lolita was bound by the Court’s disposition.

Supreme Court's Ruling on the Authenticity of the SPA

The Court agreed with the CA that the SPA was not authentic. It emphasized Lolita’s admission that she merely sent an already typewritten SPA to her husband abroad and that she never saw him sign it. The notarial acknowledgment recited that only Lolita appeared before Atty. Macario Cruz. The Court observed that a notary must ensure that the persons executing a document appear in person and that affiants attest to execution. The Court gave weight to the RTC Clerk of Court’s certification that the SPA in the court record was not the same document reported in Atty. Cruz’s notarial report. The Court noted the incongruous dating of the SPA as July 8, 1986 while TCT No. 58195 issued only on July 9, 1986. Taken together, these circumstances rebutted the presumption of regularity of the SPA and supported the CA’s finding of forgery. The Court held that expert testimony, while available, was not indispensable where the surrounding facts and documentary inconsistencies cast decisive doubt on the instrument’s genuineness.

Supreme Court's Ruling on Justification for Sale and Conjugal Rights

The Court rejected Lolita’s argument that, even if the SPA were forged, her sale was justified because proceeds purchased family necessities under Article 161 of the Civil Code or because of an alleged donation under Article 162. The Court found no proof that the proceeds of the sales were applied to such necessities, and it stressed that those Civil Code provisions address liabilities of the conjugal partnership rather than the validity of a purportedly executed instrument that binds conjugal assets. The Court declined to entertain collateral issues about donations which were irrelevant to the reconveyance claim.

Supreme Court's Ruling on Purchasers' Good Faith

Applying settled doctrine, the Court reiterated that purchasers of registered land are ordinarily entitled to rely on the face of the Torrens title, but they must not ignore known facts that would put a prudent person on inquiry. The Court defined an innocent purchaser for value as one who buys without notice of another’s right and pays a full and fair price. It held that the petitioners’ conduct negated any presumption of good faith. The Domingo spouses admitted that the property was conjugal and that Guillermo was in Saudi Arabia, yet they executed a deed that did not mention any SPA and reli

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