John Campos falsified the signature of the owner of a parcel of land in a Deed of Sale and was able to transfer the Certificate of Tile to his name. He thereafter sold the property to Spouses Decena, who was purchaser in good faith.
Is the transfer from the real owner of the property to John Campos Valid?
No, it is not valid since it is fraudulent. The Certificate of Title is defective and VOID. It can be cancelled and repudiated anytime.
Is the transfer from John Campos to Spouses Decena Valid?
Yes, it is valid and the Certificate of Title issued to spouses Decena become infallible. Considering that the Spouses Decena are purchaser in good faith, they validly acquire right over the property.
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It is true, a falsified Land Title can be a source of a valid land title. This may occur when the falsified or fraudulent land title is transferred to an innocent buyer in good faith. The buyer must have not known, or could have not known that the property he is buying has a fraudulent Certificate of Title. This is based on the principle that public confidence in the Certificate of Title cannot be impaired.
"Where innocent third persons, relying on the correctness of the certificate of title thus issued, acquired rights over the property the court cannot disregards such rights and order the total cancellation would be to impair public confidence in the certificate of title, for everyone dealing with property registered under the Torrens System would have to inquire in every instance whether the title has been regularly or irregularly issued. This is contrary to the evident purpose of the law. Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go beyond the certificate to determine the condition of the property."
It is a familiar doctrine that a forged or fraudulent document may become the root of a valid title, if the property has already been transferred from the name of the owner to that of the forger. This doctrine serve to emphasize that a person who deals with registered property in good faith will acquire good title from a forger and be absolutely protected by a Torrens title. In the final analysis, the resolution of this case depends on whether the petitioners are purchasers in good faith.
What is a purchaser in good faith?
A purchaser in good faith is one who buys property of another without notice that some other person has a right to, or interest in, such property and pays full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in the property.
Is the principle that a person dealing on a registered land need not go beyond its certificate of title absolute?
No. The exception to rule is where there are circumstances which would put a party on guard and prompt him to investigate or inspect the property being sold to him, such as the presence of occupants/ tenants thereon, it is of course expected from the purchaser of a valued piece of land to inquire first into the status or nature of possession of the occupants.
What is the remedy of the Real Owner?
The real owner may file a complaint for the Reconveyance of Certificate of Title fraudulently issued. An annotation may be recorded in the title while the case is pending in court. Nevertheless, if the Buyer is a purchaser in good faith, the real owner may not be able to cancel the title.
In this instance, the proper remedy would be to file a CRIMINAL CASE FOR FALSIFICATION OF PRIVATE DOCUMENT. Since it is clear that the transfer was fraudulent, the Deed of Sale showing that the forger is the real owner when in fact he is not, a falsification would be a proper action. Falsification has a penalty of imprisonment and, when properly alleged, damages.
(G.R. No. 164801)
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