Due diligence

Dear Atty. Peachy,

After seven years of working, I was able to buy a small property in Laguna. I stayed there until I was assigned to the regional office of our company in California. I left the house and lot under the care of a longtime friend who just got a job in Laguna. We agreed that she does not need to pay rent but she will take care of the upkeep of the house and lot. Every year, I send money to my friend for the payment of the real property taxes of the house and lot.

A month ago, I received a friend request in Facebook from my neighbor in Laguna and had a short chat with her. I was surprised when she asked me why I sold my house and lot. She said that she thought that my stint here in California was only temporary and that I am going back to the Philippines. When I told her that I did not sell my house and lot, she informed me that a family moved in just about a week ago and she learned from them that they already bought the property.

Upon learning this, I immediately contacted my friend but could not reach her anymore. I then asked my brother in the Philippines to investigate. I learned from my brother that my friend stole the title of the property from my safe and forged a Deed of Absolute Sale, making it appear that I sold the property to her. My friend was able to have the title canceled and a new title issued in his name. She, thereafter, sold the property to the now occupants of my house and lot. The buyers told my brother that they conducted due diligence to verify the title of my friend and after finding out, during ocular inspection, that there is no other occupant in the property except my friend, they proceeded with buying the property from my friend and fully paid the purchase price to her.

My brother said that I can perhaps file an action of reconveyance, to compel the buyers to transfer or reconvey the property to me as it was wrongfully registered in the name of my friend which was the basis of the sale of the property to them. Is he correct? Can I still get the property from the buyer?



Dear Rita,

Unfortunately, you cannot go after the buyer who is an innocent purchaser for value in this case. Please note that only the encumbrances noted on the certificate of title shall bind every subsequent purchaser of registered land who buys the land in good faith. To be considered as a buyer in good faith, it is enough that: (1) he relied on the face of the certificate of title, (2) he does not have any knowledge that will put a reasonable man in inquiry of an existence of a prior right to the property and (3) he exercised due diligence. It appears that the buyer of the property in this case is a buyer in good faith.

Generally, a forged deed is null and cannot convey title. There are instances, however, when such a fraudulent document may become the root of a valid title. One such instance is where the certificate of title was already transferred from the name of the true owner to the forger and the land was subsequently sold to an innocent purchaser for value, just like in your case. The buyer, in such an instance, had the right to rely upon what appeared in the certificate of title.

This is why land owners should make sure that the titles to their property are safely kept. If a forger gets hold of the title to a registered land, it will be easier for him to have the property transferred to him by forging a deed of sale between him and the true owner of the land.


Atty. Peachy Selda-Gregorio

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