RE: Every Person Dealing with an Agent is Put Upon Inquiry, and Must Discover Upon His Peril the Authority of the Agent |
It has been consistently held that a forged deed can become a source of a valid title when the buyers are in good faith.(1)
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 in it, and who pays a full and fair price at the time of the purchase or before receiving any notice of another person’s claim. The burden of proving the status of a purchaser in good faith and for value lies upon one who asserts that status. This onus probandi cannot be discharged by mere invocation of the ordinary presumption of good faith.
As a [general rule], every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefore and the law will no way oblige him to go beyond the certificate to determine the condition of the property.(2) However, this principle admits [exceptions].
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x x x 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] of sufficient facts to induce a reasonably prudent man to inquire into the status of the title of the property in litigation. (Emphasis supplied).
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 the certificate. (Emphasis supplied).
One who falls within the exception can neither be denominated as innocent purchaser for value nor a purchaser in good faith; and hence does not merit the protection of the law.
While this Court protects the right of the innocent purchaser for value and does not require him to look beyond the certificate of title, this protection is not extended to a purchaser who is [not dealing] with the registered owner of the land. (Emphasis supplied).
In case the buyer does not deal with the registered owner of the real property, the law requires that a higher degree of prudence be exercised by the purchaser.
As succinctly pointed out in San Pedro v. Ong(3):
The Court has stressed time and again that every person dealing with an [agent] 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 agent’s authority, and his ignorance of that authority will [not] be any excuse. (Emphasis supplied).
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[G.R. No. 188395, November 20, 2013]
HEIRS OF THE LATE FELIX M. BUCTON, et al. vs.
SPOUSES GONZALO and TRINIDAD GO,
👨⚖️PEREZ, J.
Footnotes
(1) Rufloe v. Burgos, G.R. No. 143573, 30 January 2009, 577 SCRA 264, 273.
(2) Cayana v. Court of Appeals, 469 Phil. 830, 846 (2004).
(3) G.R. No. 177598, 17 October 2008, 569 SCRA 767, 785.
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