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Forged Sale Documents and Title Validity

This document summarizes two Philippine Supreme Court cases on forged documents and land titles: 1) In Tenio-Obsequio v. Court of Appeals, the court ruled that a fraudulent or forged document of sale can give rise to a valid title if the certificate of title was transferred to the name indicated by the forger and a subsequent innocent purchaser bought the land. 2) In Duran v. Intermediate Appellate Court, the court similarly ruled that a mortgagee can be considered a buyer in good faith if they relied on the certificate of title, even if the original sale document used to transfer the title was forged, as the fraudulent document can become the root of a valid title.

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24 views2 pages

Forged Sale Documents and Title Validity

This document summarizes two Philippine Supreme Court cases on forged documents and land titles: 1) In Tenio-Obsequio v. Court of Appeals, the court ruled that a fraudulent or forged document of sale can give rise to a valid title if the certificate of title was transferred to the name indicated by the forger and a subsequent innocent purchaser bought the land. 2) In Duran v. Intermediate Appellate Court, the court similarly ruled that a mortgagee can be considered a buyer in good faith if they relied on the certificate of title, even if the original sale document used to transfer the title was forged, as the fraudulent document can become the root of a valid title.

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Ja Mi Lah
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TENIO-OBSEQUIO V.

COURT OF APPEALS
G.R. No. 107967 March 1, 1994

Facts:

On September 10, 1986, private respondents filed a complaint in the court
a quo against herein petitioners Consorcia Tenio and her husband, Orlando
Obsequio, and the heirs of Eduardo Deguro for recovery of possession and
ownership, alleging that sometime in 1964, they mortgaged the land to
Eduardo Deguro for P10,000.00; that to guaranty the loan they delivered to
the latter the original certificate of title to the land; that in the meantime,
they continued to cultivate the same and, at the end of the harvest season,
they gave two-thirds (2/3) of the harvest to Eduardo Deguro; that on June
25, 1965, Eduardo Deguro and his wife, without the knowledge and
consent of herein private respondents, prepared a document of sale and
through misrepresentation and other manipulations made it appear that
private respondents sold the land to them.

This deed of sale was annotated at the back of the said certificate of title as
Entry No. 16007. By virtue thereof, Original Certificate of Title No. P-1181
in the name of Eufronio Alimpoos was cancelled and Transfer Certificate of
Title No. T-1360 was correspondingly issued in favor of Eduardo Deguro.
After the death of Eduardo Deguro, his heirs sold the land to Consorcia
Tenio-Obsequio. On September 22, 1970, Transfer Certificate of Title No.
T-1421 was issued in her name. It was allegedly only in 1982, when
Eufronio Alimpoos received a Certificate of Agricultural Leasehold of his
land from the Department of Agrarian Reform (DAR), that he learned that
the land was already titled in the name of another.

Issue:

May a forged document of sale give rise to a valid title?

Ruling:

Yes. The court has held that a fraudulent or forged document of sale may
give rise to a valid title if the certificate of title has already been transferred
from the name of the true owner to the name indicated by the forger and
while it remained as such, the land was subsequently sold to an innocent
purchaser.
DURAN V. INTERMEDIATE APPELLATE COURT
G.R. No. L-64159 September 10, 1985

Facts:

Circe Duran owned 2 parcels of land in Caloocan City which she had
purchased form the Moja Estate. She left the Philippines in June 1854. A
Deed of Sale of the 2 lots was made in favor of Circes mother, Fe. In
December 1965, Fe mortgaged the same property to Erlinda Marcelo-
Tiangco. When Circe came to know about the mortgage, she wrote to the
Register of Deeds (RD) of Caloocan informing that she had not given her
mother any authority to sell or mortgage any of her properties. She failed to
get an answer from the RD. So she returned to the Philippines in May
1966.

Meanwhile, Fe failed to redeem the mortgaged properties and foreclosure
proceedings were initiated by Marcelo- Tiangco. Circe claims that the sale
in favor of her mother is a forgery saying that at the time of its execution in
1963, she was in the US. Fe alleges that the signatures of Circe in the
Deed are genuine and the mortgage made by Fe is valid.

Issue:

Whether Erlinda B. Marcelo-Tiangco was a buyer in good faith and for
value?

Ruling:

Yes. Good faith, while it is always to be presumed in the absence of proof
to the contrary, requires a well-founded belief that the person from whom
title was received was himself the owner of the land, with the right to
convey it. The mortgagee has the right to rely on what appears in the
certificate of title and, in the absence of anything to excite suspicion, he is
under no obligation to look beyond the certificate and investigate the title of
the mortgagor appearing on the face of the said certificate. The fraudulent
and forged document of sale may become the root of a valid title if the
certificate has already been transferred from the name of the true owner to
the name indicated by the forger.

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