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THIRD DIVISION

G.R. No. 179543 : October 6, 2010

CAMPER REALTY CORP., Petitioner, v. MARIA NENA PAJO-REYES represented by her Attorney-in-

DECISION

CARPIO MORALES, J.:

Rodolfo Pajo (Rodolfo) caused the notarization on March 27, 1974 by Atty. Camilo Naraval of a Special
Power of Attorney (SPA) executed by him and purportedly by his four siblings Maria Nena Pajo Reyes
(Nena), Godofredo, Jr. (Godofredo), Tito (Tito), and Isaias (Isaias). The SPA authorized Rodolfo to sell a
parcel of land (the property) containing an area of 8,060 square meters, situated in Catalunan Pequeñ o,
Davao City, and covered by Transfer Certificate of Title (TCT) No. T-41086 in the name of the siblings.

A day after the notarization of the SPA or on March 28, 1974, Rodolfo sold the property to Ligaya Vda. De
Bajado (Ligaya) who thereafter caused the cancellation of the title thereto and the issuance on April 1,
1974 of TCT No. T-43326 in her name.

Two days after he notarized the SPA, Atty. Naraval observed that all the signatures therein, except that of
Rodolfo, were forged, drawing him to write Rodolfos co-owners respecting his cancellation of the SPA
from his notarial register.

After Ligaya passed away, the property was bequeathed to her son-respondent Augusto Bajado (Augusto)
via Partition Agreement dated June 14, 1985. Ligayas title was thereafter cancelled and TCT No. T-
118270 was, in its stead, issued on July 16, 1986 in the name of Augusto.

In 1992, Augusto caused the division of the property into two. Before the completion of the technical
survey of the property or on August 31, 1992, Augusto sold the bigger portion thereof consisting of 7,420
square meters, later covered by TCT No. 185958 issued on December 11, 1992 still in his name, to
Camper Realty Corporation (petitioner). Augusto retained ownership of the remaining 640 square
meters of the property (covered by TCT No. 185959 in his name.

By Augustos claim, despite his sale of the 7,420 square meter lot to petitioner, petitioner acquiesced to
the issuance of the title in his name since its representative, Jose Campo, was still out of the country and
he would thus not be available to sign the pertinent documents to effect the transfer . TCT No. 195213
was finally issued in petitioners name on May 5, 1993.

On April 2, 1993, 19 years after Rodolfos co-owners of the property were notified two days after the
notarization of SPA of the forged signatures, Nena, Rodolfos sister-co-owner, filed a complaint against
Augusto and her brothers Rodolfo and Godofredo, Jr. for "declaration of nullity and/or inexistence of
contracts, cancellation of title, quieting of title and possession, damages and attorneys fees with prayer for
writ of preliminary injunction and a temporary restraining order," 1cra1aw before the Regional Trial Court
(RTC) of Davao City. Godofredo, Jr. was impleaded as defendant allegedly because he refused to be a co-
plaintiff.
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Nena alleged that only her brother Godofredo, Jr. remained as co-owner, her other brothers Rodolfo and
Tito having ceded to her their respective shares in the property by a notarized Deed of Confirmation on
May 5, 1976; and her brother Isaias had died without issue.

By Order of April 7, 1993, the RTC issued a Temporary Restraining Order restraining the "defendants
Augusto P. Bajado, his privies and all persons working for him or under his control or order to cease and
desist from committing acts of harassment against the plaintiff (Nena) . . . "2chanroblesvirtuallawlibrary

On learning of Augustos sale of part of his interest in the property to petitioner, Nena, by Amended
Complaint dated April 20, 1993, impleaded petitioner as a necessary party. Nena contended that no right
could have been transmitted to Ligaya and the subsequent transferees, the SPA being a forged document.

By Decision of September 5, 1997, 3cra1aw Branch 16 of the Davao RTC dismissed Nenas complaint,
disposing as follows:chanroblesvirtualawlibrary

PREMISES CONSIDERED, judgment, is hereby rendered:chanroblesvirtualawlibrary

1) dismissing plaintiffs complaint against defendants Augusto Bajado and Camper Realty Corporation;

2) ordering defendant Rodolfo Pajo to pay plaintiff the sums of:chanroblesvirtualawlibrary

a) P50,000.00 as moral damages;

b) P10,000.00 as exemplary damages; and

c) P10,000.00 as attorneys fees; and

3) ordering the dismissal of defendants Augusto Bajado and Camper Realty Corporation counterclaims.

SO ORDERED. (underscoring supplied)4chanroblesvirtuallawlibrary

The trial court, albeit finding that Rodolfos co-owners signatures on the SPA were forged, held that Nena
is guilty of laches and declared the validity of the transfer of the property to Augusto by way of judicial
partition, and of the subsequent sale to petitioner in this wise:chanroblesvirtualawlibrary

Titles to the property were already under the names of the transferors at the time of the transfer From
Ligaya Vda. de Bajado to Augusto Bajado thru succession/partition and from Augusto Majado to Camper
Realty Corporation by Deed of Sale. On this basis, the Court cannot declare the nullity or inexistence of
the succeeding contracts, to wit: Partition Agreement and the Deed of Sale executed by Augusto Bajado to
Camper Realty Corporation, much more cancel the Certificate of Title which at present is under Campers
name for lot previously titled No. 185958 now 195213 and Augusto Bajado for the smaller lot under Title
No. 185959. This aside, the Court also finds plaintiff Maria Nena Pajo-Reyes guilty of laches defined as the
failure or neglect to do that which, by exercising due diligence could or should have been done earlier; x x
x5cra1aw (underscoring supplied)

On appeal, the Court of Appeals (CA), by the challenged Decision, 6cra1aw reversed the trial courts
decision. It demurred to the trial courts finding that Nena is guilty of laches. It held that Augusto, as an
heir of Ligaya, did not acquire a better right over the property, viz:chanroblesvirtualawlibrary
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x x x There was no valid transfer to Ligaya and, accordingly, her son (Augusto), the appellee, did not
acquire any right over the subject lot since an heir merely steps into the shoes of the decedent and is
merely the continuation of the personality of his predecessor-in-interest.

Having thus declared that appellee acquired no right whatsoever over the property in question, it follows
that the contract of sale he entered into with Camper was invalid and did not effectively transfer
ownership over the property.7cra1aw (underscoring supplied)

Thus the appellate court disposed:chanroblesvirtualawlibrary

WHEREFORE, the appealed Decision is hereby REVERSED and SET ASIDE, and judgment
rendered:chanroblesvirtualawlibrary

1. Declaring null and void and of no effect, the Deed of Absolute Sale dated March 28, 1974, and TCT No.
T- 43326;

2. Declaring null and void and of no effect, the Deed of Absolute Sale dated August 31, 1992 and TCT Nos.
T-185959 and T-195213;

3. Ordering the Register of Deeds for Davao City to cancel TCT No. T-185959 in the name of Augusto P.
Bajado and TCT No. T-195213 in the name of Camper Realty Corporation and to restore and/or reinstate
TCT No. T-41086 of the Register of Deeds of Bataan (sic) to its full force and effect;

4. Ordering defendant Rodolfo Pajo to pay appellant the following sums:chanroblesvirtualawlibrary

a. P50,000.00 as moral damages;

b. P25,000.00 as attorneys fees; and

c. P20,000.00 as exemplary damages.

5. Ordering defendant-appellee Augusto Bajado to return the amount of the purchase price and/or
consideration of sale of the disputed land he sold to his co-defendant Camper Realty Corporation within
ten (10) days from the finality of this decision with legal interest thereon from date of the sale;

6. Ordering Rodolfo Pajo to return to the heirs of Ligaya Bajado the amount of the purchase price of the
sale of the subject land within ten (10) days from the finality of this decision with legal interest from date
of the sale.8chanroblesvirtuallawlibrary

It appears that petitioners counsel of record, Atty. Raul C. Nengasca, died during the pendency of the
appeal, notice of which the appellate court was given. Petitioner, who opted not to retain the services of a
new counsel, claims not to have received a copy of the decision and that it was only informed of it by
Augustos counsel, hence, its filing of a Motion for Reconsideration on March 8, 2007 of the appellate
courts decision.

By Resolution of July 25, 2007, the Court of Appeals resolved to deny petitioners motion for review for
being filed out of time, it relying on the Postmasters certification that a copy of its decision was actually
received by petitioner on December 28, 2006.
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Hence, the present petition for review on certiorari.

The records show that service via registered mail of the copy of the decision addressed to petitioner was
made on December 28, 2006 on a certain Daisy Belleza (Daisy) who, petitioner avers, was not authorized
to receive the copy, she being a mere househelper of petitioners director Arturo F. Campo.

Although petitioners principal office and Campos residence are housed in the same building, Campos
househelper Daisy cannot be considered as a person-in-charge of petitioners office to consider her
receipt of copy of the decision on behalf of petitioner. 9cra1aw Neither can the househelpers receipt
suffice as service to Campo, even if he is a member of petitioners Board of Directors, absent a showing
that he had been authorized by petitioner to accept service.

On to the merits of the petition.

In sales involving real property or any interest therein, a written authority in favor of the agent is
necessary, otherwise the sale is void.10cra1aw Since the property was subjected to ensuing transfers, it is
necessary to establish the rights, if any, of the transferees vis-à -vis that of Nenas.

Respondent Augusto acquired the property as his share in his mother Ligayas estate. As compulsory heir,
he merely stepped into the shoes of Ligaya. Since Ligayas title was derived from Rodolfos sale to her on
the basis of a forged SPA, Augustos title must be cancelled. Nemo dat quod non habet. In fact, it appears
that Augusto did not interpose an appeal from the appellate courts decision divesting him of his title,
rendering it final and executory as to him.

The nullity of Augustos title notwithstanding, the Court finds petitioner, who acquired the bigger portion
of the property from Augusto, a purchaser in good faith. Cayana v. Court of Appeals reiterates a well-
ensconced doctrine:chanroblesvirtualawlibrary

. . . a person dealing with registered land has a right to rely on the Torrens certificate of title and to
dispense with the need of inquiring further except when the party has actual knowledge of facts and
circumstances that would impel a reasonably cautious man to make such inquiry or when the purchaser
has knowledge of a defect or the lack of title in his vendor or status of the title of the property in
litigation. The presence of anything which excites or arouses suspicion should then prompt the vendee to
look beyond the certificate and investigate the title of the vendor appearing on the face of said certificate.
One who falls within the exception can neither be denominated an innocent purchaser for value nor a
purchaser in good faith; and hence does not merit the protection of the law.11chanroblesvirtuallawlibrary

A forged deed can legally be the root of a valid title when an innocent purchaser for value
intervenes.12cra1aw For a prospective buyer of a property registered under the Torrens system need not
go beyond the title, especially when he has no notice of any badge of fraud or defect that would place him
on guard.13cra1aw His rights are thus entitled to full protection, for the law considers him an innocent
purchaser.

There was no duty on petitioners part to go beyond the face of Augustos title and conduct inquiries on its
veracity. Nena did not present proof of any circumstance that could serve as caveat for petitioner to
undertake a searching investigation respecting the title. Moreover, the property was registered in Ligayas
name in 1974 yet, and Augustos in 1986, and no encumbrance or lien was annotated either on Ligayas or
Augustos title. For 18 years or in 1992, there was no controversy or dispute hounding the property to
caution petitioner about Augustos title thereto.
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Contrary to Nenas assertion that the sale to petitioner was a mere subterfuge by Augusto to validate his
claim on the property, evidence shows that it was not. Augusto presented a certified true copy of a
Certificate Authorizing Registration issued by the Bureau of Internal Revenue on September 3,
199214cra1aw to show that capital gains tax had been duly paid on the transfer. The Court takes judicial
notice that said certificate is necessary for presentation to the Register of Deeds to register the transfer.

AT ALL EVENTS, factual findings of the trial court are accorded great respect and shall not be disturbed
on appeal, save for exceptional circumstances. It bears noting that despite the appellate courts reversal of
the trial courts decision, it did not disturb the trial courts findings respecting petitioners good faith.

In fine, the title in the name of Augusto is defeasible, he having acquired no better right from that of his
predecessor-in-interest Ligaya. His title becomes conclusive and indefeasible, however, in the hands of
petitioner, it being an innocent purchaser for value.

A word on the legal interest due on the reimbursement of the purchase price to Nena and her remaining
co-owner Godofredo, Jr. In accordance with Eastern Shipping Lines v. Court of Appeals, 15cra1aw since the
claim does not involve a loan or forbearance of money, imposition of interest rate of six percent (6%) per
annum from date of filing of the complaint is in order.

WHEREFORE, the assailed Court of Appeals Decision in CA-G.R. CV. 59600 is SET ASIDE and another
is rendered as follows:chanroblesvirtualawlibrary

1) The Deed of Absolute Sale dated March 28, 1974 executed by respondent Rodolfo Pajo in favor of
Ligaya Vda. De Bajado is declared NULL and VOID.

2) Transfer Certificate of Title No. 195213 in the name of petitioner, Camper Realty Corporation, is
declared VALID. The Register of Deeds of Davao City is accordingly ORDERED to RETAIN in the Registry
said Transfer Certificate of Title.

3) Respondent Rodolfo Pajo is ORDERED to pay respondent Maria Nena Pajo-Reyes the amounts
of P50,000.00 as moral damages, P25,000.00 as attorneys fees, and P20,000.00 as exemplary damages;
and

4) Respondent Augusto Bajado is ORDERED to return the purchase price paid by petitioner for the land
covered by Transfer Certificate of Title No. 195213 to respondents Maria Nena Pajo-Reyes and Godofredo
Pajo, Jr., the amount to bear legal interest of 6% per annum from the date of filing of the complaint.

The Register of Deeds of Davao City is FURTHER ORDERED to cancel Transfer Certificate of Title No. T-
185959 in the name of respondent Augusto Bajado and to issue in its stead a title in the names of
respondents Maria Nena Pajo-Reyes and Godofredo Pajo, Jr.

SO ORDERED.