Void Contracts When Signatures Are Forged and Owners Are Deceased

In a 2021 ruling, the Supreme Court settled an important question in property and contract law: what happens when a deed of sale is signed by people who were already dead at the time of signing? The answer is clear — the contract is void from the beginning, and no amount of time can cure it. The case of City of Tanauan v. Millonte (G.R. No. 219292, June 28, 2021) reaffirms that forged documents, especially those involving deceased parties, cannot transfer ownership, no matter how many years have passed.

The Facts of the Case

The disputed property in Tanauan, Batangas was originally registered under Original Certificate of Title No. 3243 in the names of the Gonzaga siblings: Marcelo, Eleuteria, Pantaleona, Ambrosio, and Lucio. In 1970, a Deed of Absolute Sale supposedly showed these siblings selling the lot to the Municipality of Tanauan for P30,000.00. The property was later transferred to the City of Tanauan, and a new title (TCT No. T-42198) was issued in 1993.

The problem? All five Gonzaga siblings were already dead when the deed was executed in 1970. Ambrosio died on December 29, 1959, as confirmed by civil registrar records. The other siblings died between 1938 and 1944, though their death certificates were lost when civil registrar records were burned during World War II.

Gloria Millonte, a granddaughter of Lucio Gonzaga, filed a complaint to declare the deed and the resulting title null and void. The City of Tanauan argued that her action had prescribed — more than 34 years had passed since the deed was executed.

The Issue

The central question was whether a Deed of Absolute Sale executed by persons who were already deceased at the time of signing is valid. The City also raised defenses of prescription and laches, arguing that Millonte waited too long to challenge the sale.

The Ruling: A Contract With a Deceased Party Is Void

The Supreme Court denied the City's petition and affirmed the rulings of the lower courts. The deed was declared null and void.

The Court cited settled jurisprudence: if any party to a supposed contract was already dead at the time of its execution, the contract is undoubtedly simulated and false, and therefore null and void. Death terminates a person's contractual capacity. A deceased person cannot consent to a contract, and without consent, there is no valid agreement.

The Court emphasized that forgery cannot be presumed — it must be proved by clear, positive, and convincing evidence. Millonte successfully proved this by showing that the alleged vendors were deceased before the deed was signed. Since the original death certificates of some siblings were destroyed by fire during the war, the Court allowed secondary evidence, such as testimonies of relatives and certifications from the civil registrar.

The Presumption of Regularity Is Not Absolute

The City argued that the deed was notarized and therefore carried a presumption of regularity. The Court disagreed. While notarized documents enjoy evidentiary weight, this presumption is not absolute and can be rebutted by clear and convincing evidence.

Here, the City failed to present the notary public who notarized the deed. It also did not submit sample signatures of the Gonzagas for comparison, nor did it prove that the siblings were alive at the time of signing. Notably, the City's own witnesses admitted they did not personally know the Gonzagas and were not present during the signing.

Imprescriptibility of Actions for Void Contracts

One of the most important takeaways from this case is the rule on prescription. Article 1410 of the Civil Code states that the action or defense for the declaration of the inexistence of a contract does not prescribe. An action based on a contract that is void ab initio (void from the beginning) is imprescriptible.

This means that a void contract can be attacked at any time, regardless of how many years have passed. The City's defense of laches also failed because laches cannot be invoked when the action is imprescriptible.

Practical Takeaways

• A contract signed by a deceased person is void, not merely voidable. It produces no legal effect and transmits no rights whatsoever.
• Actions to declare a void contract do not prescribe. Even if decades have passed, a void deed can still be challenged in court.
• The presumption of regularity of notarized documents is not absolute. It can be rebutted with clear and convincing evidence, such as proof that the alleged signatories were already dead.
• A void deed cannot be the basis of a valid title. Any certificate of title issued pursuant to a forged or simulated document is likewise null and void.
• Buyers should verify the identities and capacity of sellers. The City lost because it failed to diligently check whether the Gonzagas were alive and whether the signatures were genuine.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.