St. Marys Farm, Inc. v. Prima Real Properties Nachura, J. July 31, 2008 Facts: St.

. Marys was the registered owner of an originally 25,598 sqm of land in Las Pinas under TCT S-1648. In compliance with a final court decision in another civil case, St. Marys passed and approved in 1988 a board resolution authorizing defendant Rodolfo Agana to cede to T.S. Cruz Subdivision 4,000 sqm of the abovementioned land. Agana did not return to plaintiff the said title. Instead, allegedly forged a board resolution of St. Marys authorizing Agana to sell the remaining 21,598 sqm of land. This board resolution was duly notarized. Agana was also with a Special Power of Attorney when it dealt with T.S. Cruz and Prima Real Properties. Eventually, a deed of absolute sale was signed by Agana and Prima Real Properties transferring ownership of the land from St. Marys to Prima. Prima effected the cancellation of TCT S-1648 in the name of St. Marys and another TCT T-6175 in its name was issued by the Registry of deeds, Villanueva. Prima purchased from T.S. Cruz Subdivision the 4,000 sqm portion of the land. St. Marys filed an action for rescission of the sale and the reconveyance of the property. According to St. Marys: 1. Sale of the realty entered into between Agana and Prima is null and void for lack of authority on the part of Agana to sell the property. 2. The board resolution allegedly granting Agana the authority to sell in behalf of the company, as certified by Corp. Secretary Agcaoili is a forgery as no board meeting was held on June 27, 1988; the said document was merely presented to the notary public for notarization without Atty. Agcaoili appearing before him. 3. Consequently, the deed of absolute sale was void for being a result of a fraudulent transaction. Prima contends: 1. It acted in good faith when it relied solely on the face of the authorization of Agana and paid in full the purchase price of P2,567,760.00 making it a buyer in good faitgh and for value. 2. Even assuming that the authorization of Agana was forged, St. Marys, through its president, accepted and received part of the purchase price knowing fully well the same to be the proceeds of the sale of the property, St. Marys is now estopped from asking for rescission. FIRST ISSUE: 1. Whether or not Prima was a buyer in bad faith HELD: No, Prima was a buyer in good faith and for value. On the basis of the board resolution, Prima had every reason to rely on Aganas authority to sell the land. A buyer for value and in good faith is one who buys property of another, without notice that some other person has a right or interest in such property and pays full and fair price for the same, at the same time of such purchase, or before he has notice of the said claim or interest. To prove good faith, a buyer of registered and titled land need only show that he relied on the face of the title of the property. Sufficient that the following conditions concur: a. The seller is the registered owner of the land b. Owner has possession of the land c. At the time of the sale, the buyer was not aware of any claim or interest of some other person in the property, or of any defect or restriction in the title of the seller or in his capacity to convey title to the property All the three conditions are present in the case. 1. Prima exerted efforts to verify the true background of the subject land

2. Agana presented to Prima the notarized board resolution, separate Certification by St. Marys president authorizing Agana to sell the land, and a TCT of the property SECOND ISSUE: Whether or not Agana was authorized to sell the subject property HELD: Yes, Agana had the authority to sell the subject property by virtue of the notarized board resolution and the Special Power of Attorney. RATIO: The document under scrutiny is a special power of attorney that is duly notarized. It is a public document where the notarial acknowledgement is prima facie evidence of the fact of its due execution. A buyer presented with such a document would have no choice between knowing and finding out whether a forger lurks beneath the signature on it. The notarial acknowledgment has removed that choice from him replacing it with a presumption sanctioned by law that the affiant appeared before the notary public and acknowledged that he executed the document, understood its import and signed it. The buyer is given the luxury to rely on the presumption of regularity of a duly notarized SPA. Prima also relied on the confirmation and certification of the Register of Deeds of Las Pinas and Mr. T.S. Cruz. When Agana first sold the 4,000 sqm portion to T.S. Cruz, he showed a similar authorization by the petitioner which was also signed by the corporate secretary, Atty. Agcaoili. Agana acted as St. Marys authorized agent and had full authority to bind the company in that first transaction with Cruz. The board resolution also negates the assertion by St. Marys that Aganas authority was only limited to negotiate and not to sell. The resolution further averred that Agana was authorized and empowered to sign any and all documents, instruments, papers or writings which may be required and necessary for this purpose to bind the corporation in this undertaking. The certification of St. Marys president also attests to this fact. With this, Agana, undeniably had the authority to cede the subject property, carrying with it all the concomitant powers necessary to implement said transaction. Hana R.