Land Titles and Forgery

The Torrens System

The simplified system of titling lands was introduced by Sir Richard Robert Torrens in South Australia in 1857, known as
the Torrens system. The system, also known as title by registration replaced the system of title by deeds (also known
as deeds system), an old, expensive and complicated system of tracing deeds.[1] Stated differently, the Torrens system
involves registration of title while the deeds system involves registration of instruments. Under the Torrens system, the
certificate is guaranteed by the law, and, with certain exceptions, constitutes indefeasible title to the land mentioned
therein[2]; unlike the deeds system which proof of ownership to the land is traced through a series of instruments
affecting the land (also known as chain of title), hence, title to the land is often uncertain and unreliable.

The Torrens system therefore does away the need for a chain of title and instead puts a stop forever to any question of
the legality of the title, except claims which were noted on the certificate itself at the time of registration or those that
arose subsequent thereto. Once the title is registered, the owners can rest secure on their ownership and possession.[3]
This principle of the Torrens system is also known as the curtain principle one does not need to look behind the
certificate of title and that ownership need not be proved by backtracking a series of documents.

Act No. 496, or the Land Registration Act of 1903 enacted by the Philippine Commission placed all public and private
lands in the Philippines under the Torrens system.[4] The principles of the Torrens system are recognized to the fullest
extent in our registration law which is now the 1978 Property Registration Decree, which has codified all laws relative to
land registration.[5]

However, the system does not furnish a shield for fraud, nor permit one to enrich himself at the expense of others. The
indefeasibility of a title does not attach to titles secured by fraud and misrepresentation. While registration operates as a
notice of the deed, contract or instrument to others, it does not add to its validity nor converts an invalid instrument into
a valid one. The registration under the Torrens system is not an impediment to a declaration by the Courts of its
invalidity.[6]

Forgery involving land titles and real properties

The following discussion will tackle on the legal principles governing falsification of land titles, deeds and other
instruments affecting transfers of real property and other interests thereto.

1. Forged deed

Generally, a forged or fraudulent deed or any instrument effecting transfer of ownership is a nullity and conveys no title.
[7] When the instrument presented to the Registry of Deeds for registration is forged, even if accompanied by the
owners duplicate certificate of title, the registered owner does not thereby lose his title, and neither does the assignee
or the mortgagee, for that matter, acquire any right or title to the property.[8] Accordingly, an innocent purchaser for
value protected by law is one who purchases a titled land by virtue of a deed executed by the registered owner himself,
not by a forged deed.[9] This principle is expressed under the third paragraph of Section 53 of P.D. 1529, otherwise
known as the Property Registration Decree which reads:

Section 53. x x x.

x x x. After the entry of the decree of registration on the original petition or application, any subsequent registration
procured by the presentation of a forged duplicate certificate of title, or a forged deed or other instrument, shall be null
and void.

Hence, a forged deed conveys no title and any transaction that has transpired by virtue of the same document is an
absolute nullity. Since no ownership was conveyed, the issued Transfer Certificate of Title by reason of the forged
instrument has no basis at all. Consequently, the person who buys the real property in question cannot take refuge in the
protection accorded by the Torrens system on titled lands.[10]
Furthermore, while one who buys from the registered owner does not need to look behind the certificate of title, one
who buys from one who is not the registered owner is expected to examine not only the certificate of title but all factual
circumstances necessary for him to determine if there are any flaws in the title of the transferor, or in his capacity to
transfer the land. The Court has consistently applied the stricter rule when it comes to deciding the issue of good faith of
one who buys from one who is not the registered owner, but one who exhibits a certificate of title.[11]

2. Innocent purchaser (buyer in good faith)

An innocent purchaser for value is one who buys the property of another without notice that some other person has a
right to or interest therein and who then pays a full and fair price for it at the time of the purchase or before receiving a
notice of the claim or interest of some other persons in the property. Buyers in good faith buy a property with the belief
that the person from whom they receive the thing is the owner who can convey title to the property. Such buyers do not
close their eyes to facts that should put a reasonable person on guard and still claim that they are acting in good faith.
[12]

In order that the holder of a certificate for value issued by virtue of the registration of a voluntary instrument may be
considered a holder in good faith and for value, the instrument registered should not be forged.[13] As mentioned
earlier, an innocent purchaser for value is one who buys a titled land by virtue of a deed executed by the registered
owner himself and not by a forged deed. It is important to determine whether a purchaser of the land is an innocent
purchaser for value since the law protects them. The first sentence of the third paragraph of Section 53 of P.D. 1529
provides:

Section 53. x x x.

In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the
parties to such fraud without prejudice, however, to the rights of any innocent holder for value of a certificate of title. x x
x.

(Emphasis supplied)

However, the second sentence of the above-cited provision (earlier quoted provision) operates as a qualification of the
first sentence or rather a limitation to the concept of innocent purchaser[14] since it provides that if the subsequent
registration was effected by means of forgery, the same shall be null and void. This is the reason why there can be no
buyer in good faith when the instrument registered is forged. Thus, a purchaser who acquires a real property by virtue
of a falsified deed of sale has no right whatsoever as against the true owner of the property even if he is a holder for
value of a certificate of title. This usually happens when a person buys a property from a seller pretending to be the
registered owner or an agent of the owner acting on the latters behalf without corresponding authority.

3. Forged deed conveys no title, exception

In the case of Spouses Peralta v. Heirs of Abalon[15], departing from the rule that a forged or fraudulent deed is a nullity
and conveys no title, the Court applied the exception. The case involves a parcel of land registered under the name of
Bernardina Abalon and fraudulently transferred to Restituto Rellama and who, in turn, subdivided the subject property
and sold it separately to the Spouses Dominador and Ofelia Peralta; and Marissa, Leonil and Arnel, all surnamed Andal.
Thereafter, Spouses Peralta and the Andals individually registered the respective portions of the land they had bought
under their names. The heirs of Bernardina were claiming back the land, alleging that since it was sold under fraudulent
circumstances, no valid title passed to the buyers. On the other hand, the buyers, who were now title holders of the
subject parcel of land, averred that they were buyers in good faith and sought the protection accorded to them under
the law. The Court in affirming the decision of the Court of Appeals, held that despite the fraud that marred the sale
between Bernardina Abalon and Rellama, a fraudulent or forged document of sale may still 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 of the forger or to the
name indicated by the forger and remained as such, the land is considered to have been subsequently sold to an
innocent purchaser, whose title is thus considered valid. The Court also said:

The established rule is that a forged deed is generally null and cannot convey title, the exception thereto, pursuant to
Section 55 of the Land Registration Act, denotes the registration of titles from the forger to the innocent purchaser for
value. Thus, the qualifying point here is that there must be a complete chain of registered titles. This means that all the
transfers starting from the original rightful owner to the innocent holder for value and that includes the transfer to the
forger must be duly registered, and the title must be properly issued to the transferee. x x x.

(Emphasis supplied)

Likewise in an earlier case, the Court ruled in Obsequio v. Court of Appeals[16] that reconveyance of the property in
question in favor of the previous owner by reason of an alleged forged deed of sale is not proper. It held that the
subsequent buyers of the property are considered purchasers in good faith and there is no showing nor even an
allegation that they had any participation in the alleged forgery. Neither the buyers can be said negligent since at the
time of the sale, the land was already registered in the name of the seller including the tax declaration. There is no
annotation, defect or flaw in the title that would have aroused any suspicion as to its authenticity and such being the
case, the buyers have the right to rely on what appears on the face of the certificate of title.

The old case of Fule v. De Legare[17] however, holds a similar ruling but with a slightly different factual situation. While it
appears that at the time the petitioners bought the property from John Legare the property is not yet registered under
the latters name, the Court held that this fact alone does not strip the petitioners status as innocent purchasers for
value. Although the title was still under the name of respondent Emilia De Legare, the transfer certificate was already in
the possession of her adopted son, John Legare. The Court anchored its ruling from Section 55 of Act No. 496 (Section 53
of P.D. 1529) which provides that such possession and its subsequent production to the petitioners operated as a
conclusive authority from the registered owner to the Register of Deeds to enter a new certificate. Although the deed
of sale in favor of John Legare was fraudulent, the fact remains that he was able to secure a registered title to the house
and lot. It was this title which he subsequently conveyed to the petitioners.

Simply put, while the forger or the person who acquired the property through forgery acquires no right or title over the
same, if he has successfully registered the property under his name, his subsequent transfer or encumbrance of the
property in favor of an innocent third person who had relied on the correctness of the issued certificate of title grants
the latter the right over the property and the court cannot disregard the same. This is a well recognized rule that a forged
deed or even a void title may still be a source of a valid title.

However, this doctrine has no application where the owner still holds a valid and existing certificate of title covering the
same interest in a realty; i.e., when the original owner retained possession of the title, but through fraud, another person
secured a court order for the issuance of a copy thereof. The proper application of the exception is where the forger, thru
insidious means, obtains the owners duplicate certificate of title, converts it in his name, and subsequently sells or
otherwise encumbers it to an innocent holder for value, for in such a case the new certificate is binding upon the owner
(Sec.55, Act 496; Sec. 53, P.D. No. 1529). So if the owner holds a valid and existing certificate of title, his would be
indefeasible as against the whole world, and not that of the innocent holders prior tempore potior jure (earlier in time,
priority in right).[18]

4. Who is NOT an innocent purchaser; Exception to exception

A person dealing with registered land has a right to rely on the Torrens certificate of title itself and to dispense with the
need of inquiring further EXCEPT: (1) when the party has actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry; or (2) when the purchaser has knowledge of a defect or the lack of title in
his vendor or of sufficient facts to induce a reasonably prudent man to inquire into the 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.[19]

A certificate of title issued to an innocent purchaser for value cannot be revoked on the ground that the deed of sale was
falsified, if he had no knowledge of the fraud committed.[20] Otherwise, the purchaser cannot be deemed as a
purchaser in good faith.

In the Peralta case, while the Court upheld the Andals as buyers in good faith, the other buyers, Spouses Peralta, were
not. In upholding also the appellate courts decision, the Court held that there is a factual finding that in purchasing the
subject property, the spouses merely relied on the photocopy of the title provided by Rellama. A mere photocopy of the
title should have made Spouses Peralta suspicious that there was some flaw in the title of Rellama, because he was not
in possession of the original copy.

Thus, the exception to the general rule that a forged deed conveys no right or title as discussed above have no
application when there is a showing that the purchaser (or even a mortgagee) of the property in question has actual
knowledge of the fraud or forgery, or was placed under the circumstances that would impel him to make further
inquiries about the property and its vendor (or mortgagor) but otherwise failed to do so. A purchaser in bad faith or a
negligent purchaser is considered an exception to the exception.

5. Rule on Special Power of Attorney (SPA)

Section 64 of P.D. 1529 provides that any person may, by power of attorney, convey or otherwise deal with registered
land and the same shall be registered with the Register of Deeds of the province or city where the land lies; and any
instrument revoking the same shall be registered in like manner. In relation to this, Article 1874 of the Civil Code provides
that when a sale of piece of land or any interest therein is through an agent, the authority of the latter shall be in writing;
otherwise, the sale shall be void.

A special power of attorney is a continuing one and absent a valid revocation duly furnished to a third person, the same
continues to have force and effect as against third persons who had no knowledge of such lack of authority.[21]

While the general rule is that every person dealing with registered land may safely rely on the correctness of the
certificate of title, a higher degree of prudence is required from one who buys from a person who is not the registered
owner, although the land object of the transaction is registered. In such a case, the buyer is expected to examine not
only the certificate of title but all factual circumstances necessary for him to determine if there are any flaws in the title
of the transferor. The buyer also has the duty to ascertain the identity of the person with whom he is dealing with and
the latters legal authority to convey the property.[22]

Settled is the rule that every person dealing with an agent or any person other than the registered owner of the property
is put upon inquiry and must discover upon his peril the authority of the agent, and this is especially true where the act
of the agent is of unusual nature. If a person makes no inquiry, he is chargeable with knowledge of the agents authority,
and his ignorance of that authority will not be any excuse.[23]

In the issue of whether or not the buyer of the property under a deed of sale executed in the name of the registered
owner by a fake agent or attorney-in-fact is deemed a purchaser in good faith, the Court in Solivel v. Francisco[24] laid
down the ruling based on two different scenarios.[25] In this case, the lower court upheld that the vendee is an innocent
purchaser for value despite the fact that the power-of-attorney is forged. It applied the case of Blondeau v. Nano[26]
which sustained foreclosure of a real estate mortgage under a deed which, though allegedly forged, had nonetheless
been duly registered because one of the two co-owners had given the alleged forger not only his power-of-attorney but
also possession of the title papers. However, the Supreme Court reversed the trial courts decision applying instead the
case of De Lara v. Ayroso[27] where it annulled a mortgage executed by an impostor who had, without authority, gained
possession of the certificate of title thru the owners daughter and simulated the owners name to the deed of mortgage.
The Court explained that in Blondeau, the owners negligence or acquiescence, if not actual connivance, had made
possible the commission of the fraud, while in De Lara, the title was still in the name of the real owner when the land
was mortgaged by the impostor. The mortgagee was defrauded not because they relied upon what appeared in a Torrens
certificate of title there was nothing wrong with the certificate but because they believed the words of the
impostor when he told them that he was the person named as owner in the certificate. Simply stated, a person cannot
be regarded as a purchaser/mortgagee in good faith if he himself was negligent in the real estate transaction he entered
into and failed to exercise the degree of prudence required from one who buys from a person who is not the registered
owner.

6. The rule on mortgagees

Section 32 of P.D. 1529 extends the protection given to an innocent purchaser for value to an innocent mortgagee. The
term innocent purchaser for value also includes an innocent lessee.[28] The said provision provides:

Section 32. x x x. Whenever the phrase innocent purchaser for value or an equivalent phrase occurs in this Decree, it
shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for value.

The rule on good faith equally applies to mortgagees and even in lessees and other encumbrancers for value of the real
property. So while a purchaser need not look behind the certificate of title and has the right to rely solely on what
appears on its face, the same rule applies to lessees and mortgagees.

Thus, despite the fact that the mortgagor is not the owner of the mortgaged property, his title being fraudulent, the
mortgage contract and any foreclosure sale arising therefrom are given effect by reason of public policy. This is the
doctrine of the mortgagee in good faith based on the rule that all persons dealing with property covered by a Torrens
Certificate of Title, as buyers or mortgagees, are not required to go beyond what appears on the face of the title. The
public interest in upholding the indefeasibility of a certificate of title, as evidence of the lawful ownership of the land or
of any encumbrance thereon, protects a buyer or mortgagee who, in good faith, relied upon what appears on the face of
the certificate of title.[29]

Where the certificate of title is in the name of the mortgagor when the land is mortgaged, the innocent mortgagee for
value has the right to rely on what appears on the certificate of title. In the absence of anything to excite suspicion, said
mortgagee is under no obligation to look beyond the certificate and investigate the title of the mortgagor appearing on
the face of said certificate. Although Article 2085 of the Civil Code provides that absolute ownership of the mortgaged
property by the mortgagor is essential, the subsequent declaration of a title as null and void is not a ground for nullifying
the mortgage right of a mortgagee in good faith.[30]

Likewise, the fact that the foreclosure of the mortgage and the subsequent auction sale were effected after the
annotation of the adverse claim is of no moment. The foreclosure sale retroacts to the date of registration of the
mortgage. The lien of the innocent mortgagee for value must be respected and protected.[31] As to third persons
therefore, a prior registration of a lien creates a preference and even a subsequent registration of a much earlier claim
will not diminish this preference.[32]

The mortgagees in the case of Llanto v. Alzona[33] entered into a contract of mortgage with the mortgagors pretending
to be the owners of the property. In this case, the mortgagees first conducted a credit investigation, inspected the
property and met the persons who represented themselves to be the owners of the property before they entered into
the transaction. The Court, in upholding the validity of the contract, said that the doctrine of mortgagee in good faith is
an exception to the rule enunciated under Article 2085 of the Civil Code which provides that one of the essential
requisites of the contract of mortgage is that the mortgagor should be the absolute owner of the property to be
mortgaged; otherwise, the mortgage is considered null and void.

However, this doctrine presupposes that the mortgagor, who is not the rightful owner of the property, has already
succeeded in obtaining Torrens title over the property in his name and that, after obtaining the said title, he succeeds in
mortgaging the property to another who relies on what appears on the title.[34] Hence, the doctrine of mortgagee in
good faith does not apply to a situation where the title is still in the name of the rightful owner and the mortgagor is a
different person pretending to be the owner. In such a case, the mortgagee is not an innocent mortgagee for value and
the registered owner will generally not lose his title.[35] In the same vein, the doctrine has no application where the
owner could not be charged with negligence in the keeping of its duplicate certificates of title or with any act which
could have brought about the issuance of another title relied upon by the purchaser or mortgagee for value, as the
innocent registered owner has a better right over the mortgagee in good faith. For the law protects and prefers the
lawful holder of registered title over the transferee of a vendor bereft of any transmissible rights.[36] These situations
are also the known exceptions to innocent purchasers in good faith as discussed above.

7. Banks as mortgagee

The rule is different however, with respect to banks and other financial institutions. The rule that persons dealing with
registered lands can rely solely on the certificate of title does not apply to banks.[37] Banks are enjoined to exercise a
higher degree of diligence, care, and prudence in handling real estate transactions, especially those involving registered
lands. Thus, a banking institution is expected to exercise due diligence before entering into a mortgage contract.[38]

Unlike private individuals, banks cannot rely merely on the certificate of title offered by the mortgagor in ascertaining the
status of mortgaged properties. Since its business is impressed with public interest, the mortgagee-bank is duty-bound to
be more cautious even in dealing with registered lands. Thus, before approving a loan application, it is a standard
operating practice for these institutions to conduct an ocular inspection of the property offered for mortgage and to
verify the genuineness of the title to determine the real owners thereof. The apparent purpose of an ocular inspection is
to protect the true owner of the property as well as innocent third parties with a right, interest or claim thereon from a
usurper who may have acquired a fraudulent certificate of title thereto.[39] If it did not conduct such examination and
investigation, it must be held guilty of gross negligence in granting the loans secured by the real property in question and
the bank cannot be considered as a mortgagee in good faith.[40]

The Court in Rural Bank of Compostela v. Court of Appeals[41] has once again stated the rule on mortgagee in good faith
with respect to banks, viz:

Banks, indeed, should exercise more care and prudence in dealing even with registered lands, than private individuals,
for their business is one affected with public interest, keeping in trust money belonging to their depositors, which they
should guard against loss by not committing any act of negligence which amounts to lack of good faith by which they
would be denied the protective mantle of the land registration statute, Act [No.] 496, extended only to purchasers for
value and in good faith, as well as to mortgagees of the same character and description.

Likewise, the due diligence required of banks extends even to persons regularly engaged in the business of lending
money secured by real estate mortgages.[42] Same degree of diligence is also required with respect to investment,
financing and realty corporations which because of the nature of their business, are expected to exercise a higher
standard of diligence in ascertaining the status of the property, not merely relying on what appears on the face of the
title.[43]

8. Double sale and forgery cannot co-exist

When a real property was sold to two different persons or more at the same time, the ownership of such immovable
property is governed by Article 1544 of the Civil Code, otherwise known as the rule on double sale (or which is more
appropriate as multiple sale). Said provision provides:

Art. 1544. If the same thing should have been sold to different vendees, x x x.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it
in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in possession; and,
in the absence thereof, to the person who presents the oldest title, provided there is good faith.
One example of a situation where the provision of the law could be properly applied is where the owner sold his
property to a person while at the same time, his agent or any person acting on the owners behalf sold the same to
another, the two sellers as well as the two different buyers being fully unaware of each others transaction, and all are
acting in good faith. Simply speaking, there are two valid sales and the question of who among the two buyers has the
right of ownership arises. In such a case, the law provides that the hierarchy of preference as to whom ownership shall
belong is as follows:

1. first registrant in good faith;

2. first possessor in good faith;
3. the person who in good faith presents the oldest title

It is worth noting that in every case, good faith is an indispensable requirement. The law does not apply however, if the
property is not registered under the Torrens system. The issue of buyers good faith or bad faith is relevant only where
the subject of the sale is registered land, and the purchaser is buying the same from the registered owner whose title to
the land is clean.[44] Moreover, the registration contemplated under Art. 1544 of the Code refers to registration under
P.D. 1529.[45]

Inasmuch as the rule on double sale is premised on the existence of two or more valid sales of the same property, there
is no double sale to speak of when there is fraud or forgery involved. Hence, Art. 1544 does not apply. In Fudot v.
Cattleya Land, Inc.[46], the Court ruled that Art. 1544 is not applicable in the instant case the second sale in favor of
petitioner is without the consent of the other spouse and the latters signature in the deed being forged. The Court also
cited the case of Remalante v. Tibe[47] where it ruled that the Civil Law provision on double sale is not applicable where
there is only one valid sale, the previous sale having been found to be fraudulent. Likewise, in Espiritu and Apostol v.
Valerio[48], where the same parcel of land was purportedly sold to two different parties, the Court held that despite the
fact that one deed of sale was registered ahead of the other, Art. 1544 of the Civil Code will not apply where said deed is
found to be a forgery, the result of this being that the right of the other vendee should prevail.

Remedy of the true owner or the aggrieved party

1. Direct attack on title

It is settled in this jurisdiction that the issue of the validity of title can only be assailed in an action expressly instituted for
such purpose. A certificate of title cannot be attacked collaterally. This rule is provided under Section 48 of PD 1529
which states that:[49]

Section 48. Certificate not subject to collateral attack. A certificate of title shall not be subject to collateral attack. It
cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.

In Lagrosa v. Court of Appeals[50], it was stated that it is a well-known doctrine that the issue as to whether title was
procured by falsification or fraud as advanced by petitioner can only be raised in an action expressly instituted for the
purpose. A Torrens title can be attacked only for fraud, within one year after the date of the issuance of the decree of
registration. Such attack must be direct, and not by a collateral proceeding. The title represented by the certificate
cannot be changed, altered, modified, enlarged, or diminished in a collateral proceeding. In Carvajal v. Court of
Appeals[51], it was ruled that an application for registration of an already titled land constitutes a collateral attack on the
existing title. The title may be challenged only in a proceeding for that purpose, not in an application for registration of a
land already registered in the name of another person. After one year from its registration, the title is incontrovertible
and is no longer open to review.[52]

2. Action for reconveyance

After the lapse of one year, a decree of registration is no longer open to review or attack, although its issuance is
attended with fraud.[53] This does not mean, however, that the aggrieved party is without remedy at law. If the property
has not as yet passed to an innocent purchaser for value, an action for reconveyance is still available. The sole remedy of
the land owner whose property has been wrongfully or erroneously registered in anothers name is, after one year from
the date of the decree, not to set aside the decree, but, respecting the decree as incontrovertible and no longer open to
review, to bring an ordinary action in the ordinary court of justice for reconveyance or, if the property has passed into the
hands of an innocent purchaser for value, for damages.[54]

It has been held that an original owner of registered land may seek annulment of the transfer thereof on the ground of
fraud and the proper remedy is reconveyance.[55] An action for reconveyance is a legal and equitable remedy that seeks
to transfer or reconvey property, wrongfully registered in another persons name, to its rightful owner. To warrant
reconveyance of the land, the plaintiff must allege and prove, among others, ownership of the land in dispute and the
defendants erroneous, fraudulent or wrongful registration of the property.[56] In the action for reconveyance, the
decree of registration is highly respected as incontrovertible; what is sought instead is the transfer of the property
wrongfully or erroneously registered in anothers name to its rightful owner or to the one with a better right.[57]

In New Regent Sources, Inc. v. Tanjuatco[58], the Court enumerated the four requisites that must concur for an action for
reconveyance to prosper, to wit:

To warrant a reconveyance of the land, the following requisites must concur: (1) the action must be brought in the
name of a person claiming ownership or dominical right over the land registered in the name of the defendant; (2) the
registration of the land in the name of the defendant was procured through fraud or other illegal means; (3) the property
has not yet passed to an innocent purchaser for value; and (4) the action is filed after the certificate of title had already
become final and incontrovertible but within four years from the discovery of the fraud or not later than 10 years in the
case of an implied trust. x x x.

Reconveyance is based on Section 53 of P.D. 1529 which provides that in all cases of registration procured by fraud, the
owner may pursue all his legal and equitable remedies against the parties to such fraud without prejudice, however, to
the rights of any innocent holder for value of a certificate of title. In civil law, the basis of an action for reconveyance is
the trust created by virtue of Art. 1456 of the Civil Code which provides that a person acquiring property through fraud
becomes by operation of law a trustee of an implied trust for the benefit of the real owner of the property. The presence
of fraud creates an implied trust in favor of the plaintiffs, giving them the right to seek reconveyance of the property
from the private respondents. The aggrieved party may file an action for reconveyance based on implied or constructive
trust, which prescribes in ten years from the date of the issuance of the Certificate of Title over the property provided
that the property has not been acquired by an innocent purchaser for value.[59]

While it is true that an action for reconveyance can prescribe or can be barred by statute of limitations, an action for
reconveyance based on a void contract is imprescriptible.[60] Thus, the action based on a fictitious, fraudulent or forged
deed may be brought by the aggrieved party at any time.[61]

3. Action for damages

When the property has already passed into the hands of an innocent purchaser for value, an action for reconveyance is
no longer appropriate. This is so because as a rule, a purchaser in good faith is an exception to the general rule that a
forged deed conveys no title. Nonetheless, the true owner is not without recourse. He can still file an action for damages
against the person/s responsible for his loss of right or interest in his property.

A certificate of title issued to an innocent purchaser and for value cannot be revoked on the ground that the deed of sale
was falsified, if he had no knowledge of the fraud committed. The recourse of the person prejudiced is to bring an action
for damages against those who caused or employed the fraud.[62] The Court cannot disregard the rights of an innocent
purchaser for value and order the total cancellation of the certificate for that would impair public confidence in the
certificate of title.[63]

An action for damages should be brought within ten years from the date of issuance of the questioned certificate of title
pursuant to Article 1144 of the Civil Code.[64]
 4. Cancellation of title

An action for cancellation of title is applicable where there are two titles issued to different persons for the same lot.
Where the same parcel of land is covered by two titles, necessarily when one of the two titles is held to be superior over
the other, the latter should be declared null and void and should be cancelled.[65] In case of forgery, this rule
contemplates a situation where the true owner despite retaining possession of his duplicate certificate, through fraud,
another person succeeded in selling the property in his favor and another certificate of title was issued as a result
thereof.[66]

The general rule is that where two certificates of title are issued to different persons covering the same land in whole or
in part, the earlier date must prevail as between the original parties, and in case of successive registration where more
than one certificate is issued over the land, the person holding under the prior certificate is entitled to the land as against
the person who relies on the second certificate.[67] This principle is based on the maxim prior est in tempore, potior est
in jure (first in time, stronger in right) which is being followed in our jurisdiction in land registration matters.[68]

It should be noted also that an action for cancellation of title is not an attack on the title. An action or proceeding is
deemed an attack on a title when its objective is to nullify the title, thereby challenging the judgment pursuant to which
the title was decreed. The attack is direct when the objective is to annul or set aside such judgment, or enjoin its
enforcement. On the other hand, the attack is indirect or collateral when, in an action to obtain a different relief, an
attack on the judgment is nevertheless made as an incident thereof.[69]

With respect to the aggrieved party however, the Court ruled in Gatioan v. Gaffud[70] that the purchaser from the owner
of the later certificate and his successors, should resort to his vendor for redress, rather than molest the holder of the
first certificate and his successors, who should be permitted to rest secure their title.

5. Recovery from the Assurance Fund

The Assurance Fund is intended to relieve innocent persons from the harshness of the doctrine that a certificate of title is
conclusive evidence of an indefeasible title to the land.[71]

If the property has already passed into the hands of an innocent purchaser for value, the remedy is to file an action for
damages from the person who allegedly registered the property through fraud, or if he had become insolvent or if the
action is barred by prescription, to file an action for recovery against the Assurance Fund under Section 95 of P.D. 1529
within a period of six years from the time the right to bring such action accrues.[72]

Section 95 of P.D. 1529 provides:

Section 95. Action for compensation from funds. A person who, without negligence on his part, sustains loss or damage,
or is deprived of land or any estate or interest therein in consequence of the bringing of the land under the operation of
the Torrens system of arising after original registration of land, through fraud or in consequence of any error, omission,
mistake or misdescription in any certificate of title or in any entry or memorandum in the registration book, and who by
the provisions of this Decree is barred or otherwise precluded under the provision of any law from bringing an action for
the recovery of such land or the estate or interest therein, may bring an action in any court of competent jurisdiction for
the recovery of damages to be paid out of the Assurance Fund.

The foregoing provision states all the requisites and conditions necessary before a person may recover from the
Assurance Fund. In one case[73], the Court denied the petitioners claim against the Assurance Fund. The Court held in
this wise:

Petitioners claim against the Assurance Fund must necessarily fail. Its situation does not come within the ambit of the
cases protected by the Assurance Fund. It was not deprived of land in consequence of bringing it under the operation of
the Torrens system through fraud or in consequence of any error, omission, mistake or misdescription in the certificate of
title. It was simply a victim of unscrupulous individuals. More importantly, it is a condition sine qua non that the person
who brings the action for damages against the Assurance Fund be the registered owner and, as the holders of transfer
certificates of title, that they be innocent purchasers in good faith and for value. And we have already established that
petitioner does not qualify as such.

An action for compensation from the Assurance Fund must be filed against the Register of Deeds of the province or city
where the land is situated and the National Treasurer as defendants when such action is brought to recover for loss or
damage or for deprivation of land or any estate or interest therein arising wholly through fraud, negligence, omission,
mistake or misfeasance of the court personnel, Register of Deeds, his deputy, or other employees of the registry in the
performance of their respective duties. (Section 96, Presidential Decree No. 1529). If such action is brought to recover
for loss or damage or for deprivation of land or any interest therein arising through fraud, negligence, mistake or
misfeasance of persons other than court personnel, the Register of Deeds, his deputy or other employees of the
registry, the action must be brought against the Register of Deeds, the National Treasurer, as well as other persons as
co-defendants.[74]

The claim against the Assurance Fund must be brought within a period of six (6) years from the time the right to bring
such action first occurred.[75]

Criminal case

6.1 Falsification

Forgery is a crime defined and penalized under Chapter I, Title IV, Book II of the Revised Penal Code which is Crimes
Against Public Interest. Crimes categorized under this title are those involving fraud, deceit and falsity against the public
at large. Falsification is the term applied by the Code for forgery of documents, whether it is a public, private or
commercial document, although the Code did not specifically provide the definition of each.

A deed having been acknowledged before a Notary Public is considered a public document and an unnotarized deed is
considered a private document.

Article 171 of the Revised Penal Code punishes falsification of documents committed by a public officer taking advantage
of his official position while Article 172 of the same Code punishes falsification committed by a private individual and the
use of such falsified document to the damage of a third party or with the intent to cause such damage.

Falsification of deeds, power of attorneys or other instruments affecting real properties is punishable under Art. 171 or
Art. 172 of the RPC if committed by a public officer or a private individual, respectively. It should be noted however, that
with respect to private individuals, based from the reading of the said provisions, damage to third party or intent to
cause such damage is not an element of the crime of falsification of public or commercial documents, whereas the same
is material when it comes to private documents.

Stated differently, falsification in Article 171 by public officers, whether the document is private, public or commercial,
and falsification in the first paragraph of Article 172 by private individuals which pertains to public or commercial
documents, are committed by the mere performance of any of the acts specified therein (acts of falsification
enumerated in Article 171); while falsification in the second paragraph of Article 172 by private individuals which
pertains to private documents, is committed by the performance of the acts of falsification enumerated in Article 171
coupled with the damage to the third party or with intent to cause such damage even without actual damage. The
element of damage therefore is not necessary when the document involved is a public or commercial document.

The rationale for the distinction is provided by the Court in the case of People v. Pacana[76], citing the December 23,
1885 decision of the Supreme Court of Spain, to wit:

x x x[I]n the falsification of public or official documents, whether by public officials or by private persons, it is
unnecessary that there be present the idea of gain or the intent to injure a third person, for the reason that, in
contradiction to private documents, the principal thing punished is the violation of the public faith and the destruction of
the truth as therein solemnly proclaimed.
Aside from actions to redeem the property, the true owner of the property or any person aggrieved by reason of the
alleged forgery may pursue a criminal action against the wrongdoer and may file an information for Falsification of Public
Document under the RPC.

In Recebido v. People[77], while the petitioner admits that the deed of sale that was in his possession is a forged
document, he nonetheless, argues that the fact remains that there is no proof that he authored such falsification or that
the forgery was done under his direction. In rejecting this claim and affirming his conviction for Falsification of Public
Document, the Court held that the petitioner was in possession of the forged deed of sale which purports to sell the
subject land from the private complainant to him and given this factual backdrop, the petitioner is presumed to be the
author of the forged deed of sale, despite the absence of any direct evidence of his authorship of the forgery. Since the
petitioner is the only person who stood to benefit by the falsification of the document found in his possession, it is
presumed that he is the material author of the falsification.

6.2 Estafa through falsification

When the offender commits on a public, official or commercial document any of the acts of falsification enumerated in
Article 171 of the RPC as a necessary means to commit another crime like estafa, theft or malversation, the two crimes
form a complex crime. Under Article 48 of the Code, there are two classes of a complex crime. A complex crime may
refer to a single act which constitutes two or more grave or less grave felonies, or to an offense as a necessary means for
committing another.[78]

The falsification of a public, official, or commercial document may be a means of committing estafa, because before the
falsified document is actually utilized to defraud another, the crime of falsification has already been consummated,
damage or intent to cause damage not being an element of the crime of falsification of public, official or commercial
document. In other words, the crime of falsification has already existed. Actually utilizing that falsified public, official or
commercial document to defraud another is estafa. But the damage is caused by the commission of estafa, not by the
falsification of the document. Therefore, the falsification of the public, official or commercial document is only a
necessary means to commit estafa.[79]

In Milla v. People[80], the petitioner was held guilty of estafa through falsification of public documents because he
misrepresented himself to have the authority to sell the subject property, and it was precisely this misrepresentation
that prompted private respondent MPI to purchase it. Because of its reliance on his authority and on the falsified Deed
of Absolute Sale and TCT No. 218777, MPI parted with its money.

To be convicted of the complex crime of estafa through falsification of public document, all the elements of the two
crimes of estafa and falsification of public document must exist. To secure a conviction for estafa under Article 315, par.
2(a) (by means of false pretenses or fraudulent acts) of the Revised Penal Code, the following requisites must concur:

The accused made false pretenses or fraudulent representations as to his power, influence, qualifications, property,
credit, agency, business or imaginary transactions;

The false pretenses or fraudulent representations were made prior to or simultaneous with the commission of the fraud;

The false pretenses or fraudulent representations constitute the very cause which induced the offended party to part
with his money or property;

That as a result thereof, the offended party suffered damage.[81]

On the other hand, in order to sustain conviction for the crime of falsification of a public document under Articles 171
and 172 of the RPC, the following requisites must concur:

That the offender is a private individual or a public officer or employee who took advantage of his official position;

That he committed any of the acts of falsification enumerated in article 171 of the Revised Penal Code;
That the falsification was committed in a public or official or commercial document.[82]

Thus, in Ansaldo v. People[83] where the petitioner was charged with estafa through falsification of public document, the
Court held that not all the elements of the crime of falsification of a public document are present and consequently,
petitioner can only be found guilty of estafa. While it is undisputed that petitioner committed estafa by falsely
representing to the land owner that he (petitioner) and his wife had the influence and capability to cause the subdivision
of the lot which induced the land owner to part with the owners copy of her title, there is no evidence showing that
petitioner had any participation in the execution of the mortgage involving the subject title.

In another case, in Gonzaludo v. People[84], the petitioner was acquitted of the complex crime of estafa through
falsification of public document but held guilty of the crime of falsification of public document. In this case, petitioner
was convicted by the trial court of the said complex crime for allegedly having conspired with Rosemarie Gelogo, who
used the fictitious surname Villaflor for the purpose of giving her a semblance of authority to sell the house
purportedly owned by her paramour, Ulysses Villaflor, who was legally married to private complainant, Anita Villaflor. In
exonerating the petitioner of the crime of estafa as one of the component of the complex crime charged, the Court
agreed with the contention of the petitioner that the third element of the said offense is absent that such false
pretenses or fraudulent representations constitute the very cause which induced the offended party to part with his
money or property. While it may be said that there was fraud or deceit committed by Rosemarie in this case, when she
used the surname Villaflor to give her semblance of authority to sell the subject 2-storey house, such fraud or deceit
was employed upon the Canlas spouses who were the ones who parted with their money when they bought the house.
However, the Information charging Rosemarie of estafa in the present case, alleged damage or injury not upon the
Canlas spouses, but upon private complainant, Anita Manlangit. Since the deceit or fraud was not the efficient cause and
did not induce Anita Manlangit to part with her property in this case, Rosemarie cannot be held liable for estafa. With all
the more reason must this be for the petitioner. Nonetheless, he was convicted of falsification of public document
because of his conspiracy with Rosemarie in falsifying the deed of sale as sufficiently established by evidence during the
trial.

It bears stressing however, that there is no complex crime of estafa through falsification of private document because of
their common element of deceit or damage. If the falsification of a private document is committed as a means to commit
estafa, the proper crime to be charged is falsification. If the estafa can be committed without the necessity of falsifying a
document, the proper crime to be charged is estafa.[85]

6.3 Good faith defense in falsification

Settled is the rule that there is no crime absent criminal intent. In other words, the unlawful act must be coupled with an
evil desire for a crime to exist, save of course in cases of criminal negligence where the negligence itself is the crime.
Hence, it is settled in our jurisdiction that since falsification of document is not in itself evil by its nature, absence of any
malice or criminal intent on the part of the accused might absolve him of criminal liability. Good faith therefore might be
a good defense.

In Lecaroz v. Sandiganbayan[86], the Court acquitted the accused father and son, a Mayor and an outgoing chairman of
Kabataang Barangay (KB), respectively, of the charge of estafa through falsification. The Sandiganbayan convicted both
the accused of the said charge when the Mayor entered the name of his son in the payroll of the municipality during the
period when his son is on a hold-over capacity as a KB representative despite a new one has already been elected, the
private complainant. Likewise, the son signed the payroll and authorized another to sign all the payrolls for the
succeeding pay periods and claim the corresponding salaries in his behalf. Persuaded that both accused acted in good
faith and committed a mere error of judgment without evil intent, the Court held:

On the issue of criminal liability of petitioners, clearly the offenses of which petitioners were convicted, i.e., estafa
through falsification of public documents under Art. 171, par. 4, of The Revised Penal Code, are intentional felonies for
which liability attaches only when it is shown that the malefactors acted with criminal intent or malice. If what is proven
is mere judgmental error on the part of the person committing the act, no malice or criminal intent can be rightfully
imputed to him. x x x. Ordinarily, evil intent must unite with an unlawful act for a crime to exist. Actus non facit reum, nisi
mens sit rea. There can be no crime when the criminal mind is wanting. As a general rule, ignorance or mistake as to
particular facts, honest and real, will exempt the doer from felonious responsibility. The exception of course is neglect in
the discharge of a duty or indifference to consequences, which is equivalent to a criminal intent, for in this instance, the
element of malicious intent is supplied by the element of negligence and imprudence. In the instant case, there are clear
manifestations of good faith and lack of criminal intent on the part of petitioners.

However, in Office of the Ombudsman v. Torres[87], where the respondents who were working college students were
charged, among others, by Falsification of Official Document by making false entries in their Daily Time Records (DTR),
the Court reversed the decision of the Court of Appeals exonerating the respondents based on good faith and affirmed
the decision of the Office of the Ombudsman finding the respondents administratively guilty of the said charge.

The Court of Appeals in its decision, held that the false entries the respondents made in their DTRs have been made with
no malice or intent as to constitute falsification, as entries in the DTR is only a matter of administrative procedural
convenience or as a matter of practice but not for reason of strict legal obligation. Furthermore, they have not caused
any damage to the government or third person because under the facts obtaining, respondents may be said to have
rendered service in the interest of the public, with proper permission from their superior. The integrity of the daily time
record as an official document remains untarnished if the damage sought to be prevented has not been produced.

The Supreme Court on the other hand is not persuaded. In striking the respondents claim of good faith, the Court held
that falsification of DTRs amounts to dishonesty. The evident purpose of requiring government employees to keep a time
record is to show their attendance in office to work and to be paid accordingly. Closely adhering to the policy of no work-
no pay, a DTR is primarily, if not solely, intended to prevent damage or loss to the government as would result in
instances where it pays an employee for no work done. Explaining good faith, the Court stated:

Good faith, here understood, is an intangible and abstract quality with no technical meaning or statutory definition, and
it encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to
seek an unconscionable advantage. An individuals personal good faith is a concept of his own mind and, therefore, may
not conclusively be determined by his protestations alone. It implies honesty of intention, and freedom from knowledge
of circumstances which ought to put the holder upon inquiry. The essence of good faith lies in an honest belief in the
validity of ones right, ignorance of a superior claim, and absence of intention to overreach another.

(Emphasis in the original)

The Court further said that the Court of Appeals gravely erred when it exonerated respondents from administrative guilt.
The Lecaroz case adopted by the appellate court in laying the legal basis for its ruling does not apply to the instant case
because said cases pertain to criminal liability for Falsification of Public Document under the Revised Penal Code. The
element of damage need not be proved to hold respondents administratively liable.

With respect to disputes involving conveyance of real property, the case of Spouses Villamar v. People[88] is one example
where the defense of good faith was invoked by the spouses accused, the alleged forgers of the Deed of Sale in question.
In this case, a parcel of land was sold by Elena Manantan to her nine children. Six of them later sold their respective
shares to one of their brother Simplicio who eventually sold his total share to his daughter, the one of the spouses herein
accused. The spouses registered with the Office of the Provincial Assessor of Lingayen, Pangasinan a signed and
notarized Deed of Sale. However, it was made to appear in the said deed that all of Elenitas children sold the property.
While the spouses admit that not all of Elenitas children were vendors in the said document, they insist that they could
not be held guilty of falsification but rather the Office of the Provincial Assessor who prepared the document without
their knowledge. The trial courts and the Court of Appeals convicted the accused of falsification of public document and
disregarded the defense of good faith. It was held that while the fact of forgery came to the knowledge of the accused
and it was not disputed, their inaction to inform the private complainant about the inclusion of her name in the said
deed negates their claim of innocence. It is well-settled that the person who stood to benefit by the forged document or
was in possession of it or makes use of the same is presumed to be the material author of the falsification.[89] Since the
Deed of Sale was executed in their favor, clearly, they are the ones who benefited from the falsified document.

It should be noted however, that the Supreme Court affirmed their conviction merely because petition for review on
certiorari under Rule 45 of the Rules of Court covers only questions of law. Questions of fact are not reviewable and
factual findings of the lower courts are binding on the Court. According to the Court, whether the spouses accused are
innocent of the existence of the falsified document is a question of fact which is not reviewable. Furthermore, they
failed to show that their case falls within the recognized exceptions to the rule.

Similarly, the good faith defense was not appreciated in the case of Del Prado v. People[90] which involves a Deed of
Succession, the alleged falsified document. By virtue of the said document, an Original Certificate of Title was cancelled
and several titles were issued in lieu thereof in favor of the several heirs. However, the heirs who executed and signed
the document inserted a clause which states: the parties hereto are the only heirs of the decedent which in effect,
excluded one co-heir, the private complainant. The accused heirs insist that they were innocent of and did not really
intend the exclusion of the complainant heir. They also anchored their defense on the several documents they previously
executed recognizing the complainants heirship. However, the Court rejected the absence of malice on the part of the
several accused in this wise:

There can be no good faith on the part of the petitioners since they knew of the untruthful character of statements
contained in their deed of succession.

xxx

The obligation of the petitioners to speak only the truth in their deed of succession is clear, taking into account the very
nature of the document falsified. The deed, which was transformed into a public document upon acknowledgement
before a notary public, required only truthful statements from the petitioners. It was a legal requirement to effect the
cancellation of the original certificate of title and the issuance of new titles by the Register of Deeds. The false statement
made in the deed greatly affected the indefeasibility normally accorded to titles over properties brought under the
coverage of land registration, to the injury of Corazon who was deprived of her right as a landowner, and the clear
prejudice of third persons who would rely on the land titles issued on the basis of the deed.

We cannot subscribe to the petitioners claim of good faith because several documents prove that they knew of the
untruthful character of their statement in the deed of succession. The petitioners alleged good faith is disputed by their
prior confirmation and recognition of Corazons right as an heir, because despite knowledge of said fact, they included in
the deed a statement to the contrary. The wrongful intent to injure Corazon is clear from their execution of the deed,
showing a desire to appropriate only unto themselves the subject parcel of land. Corazon was unduly deprived of what
was due her not only under the provisions of the law on succession, but also under contracts that she had previously
executed with the petitioners.

(Emphasis supplied)

Likewise, the Court rejected the claim of good faith by the petitioner in Lastrilla v. Granda[91]. Petitioner contends that
assuming he knew or had a hand in the falsification of the three (3) deeds of absolute sale and used the same to process
the issuance of the new TCTs, said act is not a punishable act of falsification as the same was authorized by the heirs of
Aurora (the land owner) including respondent. The Court held that such contention was belatedly raised on appeal and
as logically pointed out by respondent, he is an heir of Aurora and definitely, he did not authorize petitioner to falsify the
subject deeds and use the same to effect the transfer of the TCTs. Furthermore, the finding that there is probable cause
to believe that the signatures of both Aurora and Rafael were falsified and the dates of the instruments were antedated
lay serious doubt on the claim that the conveyance was indeed authorized by Aurora herself. To further sow doubt on the
claim of authority, respondents claim that in 1999, his grandmother Aurora was already too sickly and frail to execute
said documents, finds support in the evidence on record. A househelp in the residence of Aurora attested that in 1999,
she was one of those who took care of Aurora who was then very sickly, could hardly recognize faces, remember names
and events and very rarely talked and whose condition worsened starting January 1999. Also bolstering respondents
claim is the noticeable fact that Aurora signed the GPOA dated February 14, 1999 in favor of Silvina by affixing her
thumbmark instead of her customary signature.

Proving forgery

Section 1, Rule 131 of the Rules of Court provides that the burden of proof is the duty of a party to prove the truth of his
claim or defense, or any fact in issue by the amount of evidence required by law.[92] As a rule, forgery cannot be
presumed and must be proved by clear, positive and convincing evidence and the burden of proof lies on the party
alleging forgery. The best evidence of a forged signature in the instrument is the instrument itself reflecting the alleged
forged signature. The fact of forgery can only be established by comparison between the alleged forged signature and
the authentic and genuine signature of the person whose signature is theorized upon to have been forged.[93]

In proving the genuineness of a handwriting, Section 22, Rule 132 of the Rules of Court provides:

Section 22. How genuineness of handwriting proved. The handwriting of a person may be proved by any witness who
believes it to be the handwriting of such person because he has seen the person write, or has seen writing purporting to
be his upon which the witness has acted or been charged, or has thus acquired knowledge of the handwriting of such
person. Evidence respecting the handwriting may also be given by a comparison, made by the witness or the court, with
writings admitted or treated as genuine by the party against whom the evidence is offered, or proved to be genuine to
the satisfaction of the judge.

In Jimenez v. Commission on Ecumenical Mission, United Presbyterian Church, USA, the Court identified and explained
the factors involved in the examination and comparison of handwritings:

x x x [T]he authenticity of a questioned signature cannot be determined solely upon its general characteristics,
similarities or dissimilarities with the genuine signature. Dissimilarities as regards spontaneity, rhythm, pressure of the
pen, loops in the strokes, signs of stops, shades, etc., that may be found between the questioned signature and the
genuine one are not decisive on the question of the formers authenticity. The result of examinations of questioned
handwriting, even with the benefit of aid of experts and scientific instruments, is, at best, inconclusive. There are other
factors that must be taken into consideration. The position of the writer, the condition of the surface on which the paper
where the questioned signature is written is placed, his state of mind, feelings and nerves, and the kind of pen and/or
paper used, play an important role on the general appearance of the signature. Unless, therefore, there is, in a given
case, absolute absence, or manifest dearth, of direct or circumstantial competent evidence on the character of a
questioned handwriting, much weight should not be given to characteristic similarities, or dissimilarities, between that
questioned handwriting and an authentic one.[94]

In Bucton v. Go[95], despite the testimony of an expert witness from the National Bureau of Investigation who testified
that there are significant differences between the signatures on the standard documents from the one found in the SPA,
this testimony, however, was disregarded both by the RTC and the Court of Appeals which upheld the validity of the
same on the ground that it enjoys the presumption of regularity of a public document. The Court however, is not
convinced and held that while it is true that a notarized document carries the evidentiary weight conferred upon it with
respect to its due execution, and has in its favor the presumption of regularity, this presumption, however, is not
absolute. It may be rebutted by clear and convincing evidence to the contrary. The testimony of the expert witness and
the petitioner, had it been properly appreciated, is sufficient to overcome the presumption of regularity attached to
public documents and to meet the stringent requirements to prove forgery. In reversing the decision of the Court of
Appeals, the Court said:

In upholding the validity of the SPA, the Court of Appeals brushed aside the foregoing testimonial evidence of the
expert witness and made an independent examination of the questioned signatures, and based thereon, ruled that there
is no forgery. The appellate court attributed the variations to the passage of time and the persons increase in age and
dismissed the findings of the expert witness because it failed to comply with the rules set forth in jurisprudence that the
standard should embrace the time of origin of the document, so that one part comes from the time before the origin and
one part from the time after the origin. We are not unmindful of the principle that in order to bring about an accurate
comparison and analysis, the standard of comparison must be as close as possible in point of time to the suspected
signature. However, when the dissimilarity between the genuine and false specimens of writing is visible to the naked
eye and would not ordinarily escape notice or detection from an unpracticed observer, resort to technical rules is no
longer necessary and the instrument may be stricken off for being spurious. More so when, as in this case, the forgery
was testified to and thus established by evidence other than the writing itself. When so established and is conspicuously
evident from its appearance, the opinion of handwriting experts on the forged document is no longer necessary.

It is also worth stressing that a mere denial of a person whose signature was allegedly forged that he signed the
questioned deed of sale will not suffice to overcome the positive value of the subject deed, a notarized document. Mere
comparison of the alleged forged signature from the presented samples of genuine signatures to show its variance
therefrom cannot be considered as sufficient evidence of forgery. A claim of forgery cannot also be accepted absent
comparison of signatures and witness (save for the claimant himself) to testify on the same. Otherwise, the public
document must be upheld.[96]

The issue of the genuineness of a signature in a deed is a question of fact

The issue of the genuineness of a deed of sale is essentially a question of fact. It is settled that the Supreme Court is not
duty-bound to analyze and weigh again the evidence considered in the proceedings in the lower court. This is especially
true where the trial courts factual findings are adopted and affirmed by the Court of Appeals. Factual findings of the trial
court, affirmed by the CA, are final and conclusive and may not be reviewed on appeal. Conclusions and findings of fact
of the trial court are entitled to great weight and should not be disturbed on appeal, unless strong and cogent reasons
dictate otherwise. This is because the trial court is in a better position to examine the real evidence, as well as to observe
the demeanor of the witnesses while testifying in the case. [97]

Thus, in Gepulle-Garbo v. Garabato[98], when the Court was presented with the question of whether the signatures
appearing on the deed of sale were forged, it held:

The issue raised by petitioner is essentially factual in nature, the determination of which is best left to the courts below.
Well settled is the rule that the Supreme Court is not a trier of facts. The function of the Court in petitions for review on
certiorari is limited to reviewing errors of law that may have been committed by the lower courts. As a matter of sound
practice and procedure, the Court defers and accords finality to the factual findings of trial courts, more so, when as
here, such findings are undisturbed by the appellate court. Stated otherwise, the Court refrains from further scrutiny of
factual findings of trial courts, more so when those findings are affirmed by the CA. To do otherwise would defeat the
very essence of Rule 45 and would convert the Court into a trier of facts, which is not meant to be. Certainly the rule
admits exceptions. None, however, is applicable to the case at bar. Absent any application of any of the recognized
exceptions, this Court is bound by the findings of fact by the lower courts.

Opinion of the handwriting experts, not binding upon the courts

In the Gepulle-Garbo case, the Court also ruled that courts are not bound by expert testimonies especially that the
examination was upon the initiative of the party who had complete control on what documents and specimens to be
examined by the National Bureau of Investigation. Such person had the onus of showing that the signatures were forged.
The Court said in this wise:

The opinion of handwriting experts is not necessarily binding upon the court, the experts function being to place
before the court data upon which the court can form its own opinion. This principle holds true especially when the
question involved is mere handwriting similarity or dissimilarity, which can be determined by a visual comparison of
specimens of the questioned signatures with those of the currently existing ones. A finding of forgery does not depend
entirely on the testimonies of handwriting experts, because the judge must conduct an independent examination of the
questioned signature in order to arrive at a reasonable conclusion as to its authenticity.

Certificate of title vs. unregistered deed of sale

It is a fundamental principle in land registration that the certificate of title serves as evidence of an indefeasible and
incontrovertible title to the property in favor of the person whose name appears therein. It is conclusive evidence with
respect to the ownership of the land described therein. Moreover, the age-old rule is that the person who has a Torrens
title over a land is entitled to possession thereof.[99] Thus, even assuming that the deed of sale is genuine and valid, as
against the registered owners and the holder of such but unregistered deed of sale, it is the former who has a better
right to possess.[100]

Legal standing of informal settlers

It is settled that absence of title over the disputed property will not divest the courts of jurisdiction to resolve the issue
of possession and it is not a ground for the courts to withhold relief from the parties in an ejectment case.[101]

Possession in ejectment cases means nothing more than actual physical possession, not legal possession in the sense
contemplated in civil law. In a forcible entry case, prior physical possession is the primary consideration. A party who can
prove prior possession can recover such possession even against the owner himself. Whatever may be the character of
his possession, if he has in his favor prior possession in time, he has the security that entitles him to remain on the
property until a person with a better right lawfully ejects him. The party in peaceable, quiet possession shall not be
thrown out by a strong hand, violence, or terror.[102]

In Pajuyo v. Court of Appeals[103] where the sole issue is possession, the Court brushed aside the ruling of the Court of
Appeals that both parties are in pari delicto or in equal fault being both squatting on the property hence should be left
where they are. The Court held that the principle of pari delicto was erroneously applied. The application of this principle
is not absolute, as there are exceptions one of which is where its application would violate well-established public policy.
Courts must resolve the issue of possession even if the parties to the ejectment suit are squatters. The determination of
priority and superiority of possession is a serious and urgent matter that cannot be left to the squatters to decide. To do
so would make squatters receive better treatment under the law. The law restrains property owners from taking the law
into their own hands. However, the principle of pari delicto as applied by the Court of Appeals would give squatters free
rein to dispossess fellow squatters or violently retake possession of properties usurped from them. Courts should not
leave squatters to their own devices in cases involving recovery of possession.

In Pitargue v. Sorilla[104], both the plaintiff and the defendant were in effect squatting on government property. Yet, the
court upheld its jurisdiction to resolve the issue of possession even if the plaintiff and the defendant in the ejectment
case did not have any title over the contested land.

Proposed amendment of Articles 171 and 172 of the Revised Penal Code

As of this writing, pending in the Senate is the Senate Bill No. 2251 introduced on May 28, 2014 by Senator Joseph
Ejercito which seeks to amend Arts. 171 and 172 of the RPC with respect to falsification involving land titles entitled:

AN ACT IMPOSING STIFFER PENALTIES FOR FALSIFICATION OF CERTIFICATES OF LAND TITLE OR ANY APPLICATION, DEED,
INSTRUMENT OR SUPPORTING DOCUMENT, REASONABLY CONNECTED WITH AND CALCULATED TO CAUSE THE ISSUANCE
OF A CERTIFICATE OF LAND TITLE, CLASSIFYING THE SAME AS A HEINOUS OFFENSE INVOLVING ECONOMIC SABOTAGE IF
THE VALUE OR AGGREGATE VALUE OF THE LAND IS AT LEAST TEN MILLION PESOS (P10,000,000.00), AMENDING FOR THE
PURPOSE ARTICLES 171 AND 172 OF ACT NO. 3815, AS AMENDED, OTHERWISE KNOWN AS THE REVISED PENAL CODE
AND FOR OTHER PURPOSES.

The proposed legislation was prompted by the increasing incidence of fake titles or issuance of valid titles but as a result
of fraudulent transactions which destroy the integrity of the Torrens system. According to the Senator, our present law
on land registration which is the Presidential Decree No. 1529 or the Property Registration Decree lacks teeth to
accomplish its goals and objectives as it failed to provide penal sanctions in case of violation thereof. Currently, a person
responsible for the issuance of a fake or falsified title may only be held criminally liable for perjury under Article 183 of
the Revised Penal Code, and/or Falsification of Public Documents under either Article 171 or Article 172 of the same
Code. The penalty for perjury is a mere arresto mayor in its maximum period to prision correccional in its minimum
period. On the other hand, the maximum penalty imposable for falsification is a mere prision mayor and a fine not to
exceed P 5,000.00.

Endnotes

[1] Sir Robert Richard Torrens, Encyclopaedia Britannica, available at

http://www.britannica.com/biography/Robert-Richard-Torrens (last accessed: August 6, 2015)

[2] Justice Oswaldo Agcaoili, Property Registration Decree and Related Laws 8 (2011 edition)

[3] Id. at 9 and 10, citing Legarda v. Saleeby, G.R. No. 8936, October 2, 1915 and SM Prime Holdings, Inc. v. Madayag, G.R.
No. 164687, February 12, 2009

[4] Id. at 8

[5] Id. at 9

[6] Id. at 10, citing Rodriguez v. Lim, G.R. No. 135817, November 30, 2006; Manlapat v. Court of Appeals, G.R. No.
125585, June 8, 2005; Baguio v. Republic, G.R. No. 119682, January 21, 1999; Pascua v. Court of Appeals, G.R. No.
140243, December 14, 2000; Fudot v. Cattleya Land, Inc., G.R. No. 171008, September 13, 2007

[7] Id. at 482

[8] Ibid. citing Bernales v. Sambaan, G.R. No. 163271, January 16, 2010

[9] Bernales, supra

[10] Ibid.

[11] Yu v. Pacleb, G.R. No. 172172, February 24, 2009

[12] Peralta v. Heirs of Abalon, G.R. No. 183448, June 30, 2014

[13] Bernales, supra

[14] Agcaoili, supra, at 482

[15] Peralta, supra

[16] G.R. No. 107967, March 1, 1994

[17] G.R. No. L-17951, February 28, 1963

[18] Peralta, supra, citing Torres v. Court of Appeals, 264 Phil. 1062 (1990)

[19] Peralta, supra

[20] Veloso v. Court of Appeals, G.R. No. 102737, August 21, 1996

[21] Agcaoili, supra, at 553

[22] Heirs of Victorino Sarili v. Lagrosa, G.R. No. 193517, January 15, 2014

[23] Heirs of the late Felix Bucton v. Go, G.R. No. 188395, November 20, 2013

[24] G.R. No. 51450, February 10, 1989

[25] Agcaoili, supra, at 489

[26] G.R. No. L-41377, July 26, 1935

[27] G.R. No. L-6122, May 31, 1954

[28] Agcaoili, supra, at 317 and 483, citing Crisostomo v. Court of Appeals, G.R. No. 91383, May 31, 1991 and Unchuan v.
Court of Appeals, G.R. No. 78775, May 31, 1988

[29] Spouses Vilbar v. Opinion, G.R. No. 176043, January 15, 2014, citing Cavite Development Bank v. Spouses Lim, 381
Phil. 355 (2000)

[30] Development Bank of the Philippines v. Court of Appeals and Cajes, G.R. No. 129471, April 28, 2000

[31] St. Dominic Corporation v. Intermediate Apellate Court, G.R. No. 70623, June 30, 1987

[32] See Cruz v. Bancom Finance Corporation, G.R. No. 147788, March 19, 2002

[33] G.R. No. 150730, January 31, 2005

[34] Bank of Commerce v. Spouses San Pablo, G.R. No. 167848, April 27, 2007

[35] Erea v. Qerrer-Kauffman, G.R. No. 165853, June 22, 2006

[36] Spouses Bautista v. Spouses Jalandoni and Manila Credit Corporation, G.R. No. 171464, November 27, 2013

[37] Philippine Trust Company v. Court of Appeals, G.R. No. 150318, November 22, 2010

[38] Arguelles v. Malarayat Rural Bank, Inc., G.R. No. 200468, March 19, 2014

[39] Ibid.

[40] Gatioan v. Gaffud, G.R. No. L-21953, March 28, 1969

[41] G.R. No. 122801, April 8, 1997

[42] Cruz v. Bancom Finance Corporation, G.R. No. 147788, March 19, 2002

[43] Agcaoili, supra, at 474, citing Sunshine Finance and Investment Corporation v. Intermediate Appellate Court, G.R.
Nos. 74070-71, October 28, 1991 and Eagle Realty Corporation v. Republic, G.R. No. 151424, July 31, 2009

[44] Spouses Sabitsana v. Muertegui, G.R. No. 181359, August 5, 2013

[45] Fudot v. Cattleya Land, Inc., G.R. No. 171008, September 13, 2007, citing Justice Jose Vitug, Compendium of Civil
Law and Jurisprudence 604 (1993)

[46] Fudot, supra

[47] G.R. No. L-59514, February 25, 1988

[48] G.R. No. L-18018, December 26, 1963

[49] Wee v. Mardo, G.R. No. 202414, June 4, 2014

[50] 371 Phil. 238 (1999)

[51] 345 Phil. 592 (1997)

[52] Wee, supra

[53] Section 32, P.D. 1529

[54] Armamento v. Guerrero, G.R. No. L-34228, February 21, 1980

[55] Heirs of Valentin Basbas, et. al. v. Basbas, G.R. No. 188773, September 10, 2014

[56] Chu v. Caparas, G.R. No. 175428, April 15, 2013

[57] Francisco v. Rojas, et. al. G.R. No. 167120, April 23, 2014

[58] G.R. No. 168800, April 16, 2009

[59] Heirs of Maximo Sanjorjo v. Heirs of Manuel Quijano, G.R. No. 140457, January 19, 2005

[60] Article 1410, Civil Code

[61] See Daclag v. Macahilig, G.R. No. 159578, February 18, 2009; Lacsamana v. Court of Appeals, G.R. No. 121658,
March 27, 1998; Bernales, supra

[62] Heirs of Julian Tiro v. Philippine Estates Corporation, G.R. No. 170528, August 26, 2008

[63] Duran v. Intermediate Appellate Court, G.R. No. L-64159, September 10, 1985

[64] Agcaoili, supra, at 353, citing Castillo v. Madrigal, G.R. No. 62650, June 27, 1991

[65] Iglesia Ni Cristo v. CFI of Nueva Ecija, G.R. No. L-35273, July 25, 1983

[66] See Torres v. Court of Appeals, G.R. No. L-63046, June 21, 1990

[67] Iglesia Ni Cristo, supra

[68] Garcia v. Court of Appeals, G.R. No. L-48971, January 22, 1980

[69] Oo v. Lim, G.R. No. 154270, March 9, 2010

[70] Gatioan, supra

[71] Agcaoili, supra, at 364

[72] Heirs of Roxas v. Garcia, G.R. No. 146208, August 12, 2004

[73] Eagle Realty Corporation v. Republic, G.R. No. 151424, July 4, 2008

[74] Reyes v. Solemar Development Corporation, G.R. No. 129247, March 3, 2006

[75] Section 102, P.D. 1529

[76] 47 Phil. 48 (1924)

[77] G.R. No. 141931, December 4, 2000

[78] Tanenggee v. People, G.R. No. 179448, June 26, 2013

[79] Ibid. citing Domingo v. People, G.R. No. 186101, October 12, 2009

[80] G.R. No. 188726, January 25, 2012

[81] Gonzaludo v. People, G.R. No. 150910, February 6, 2006

[82] Luis B. Reyes, The Revised Penal Code Book II, 232 (17th ed., 2008)

[83] G.R. No. 159381, March 26, 2010

[84] Gonzaludo, supra

[85] Batulanon v. People, G.R. No. 139857, September 15, 2006, (Italics in the original)

[86] G.R. No. 130872, March 25, 1999

[87] G.R. No. 168309, January 29, 2008

[88] G.R. No. 178652, December 8, 2010

[89] Nierva v. People, 503 SCRA 114

[90] G.R. No. 186030, March 21, 2012

[91] G.R. No. 160257, January 31, 2006

[92] Vitarich Corporation v. Locsin, G.R. No. 181560, November 15, 2010

[93] Bucton, supra

[94] Gepulle-Garbo v. Garabato, G.R. No. 200013, January 14, 2015

[95] Bucton, supra

[96] Ladignon v. Court of Appeals, G.R. No. 122973, July 18, 2000
[97] Villaceran v. De Guzman, G.R. No. 169055, February 22, 2012

[98] Gepulle-Garbo, supra

[99] Catindig v. De Meneses, G.R. No. 165851, February 2, 2011

[100] Ibid. citing Pascual v. Coronel, G.R. No. 159292, July 12, 2007

[101] Pajuyo v. Court of Appeals, G.R. No. 146364, June 3, 2004

[102] Rivera-Calingasan v. Rivera, G.R. No. 171555, April 17, 2013

[103] Pajuyo, supra

[104] 92 Phil. 5 (1952)

[105] 16th Congress Senate Bill No. 2251, Senate Of The Philippines, available at

http://www.senate.gov.ph/lis/bill_res.aspx?congress=16&q=SBN-2251 (last accessed: August 8, 2015)