G.R. No. L-7487 - Corpuz vs. Beltran

Plaintiffs and Appellants: Paulina Corpuz, et al., the legitimate heirs of Esteban Corpuz.
Defendants and Appellees: Leopoldo L. Beltran, et al., who are the vendees in the disputed transactions.

On June 22, 1932, Esteban Corpuz was granted homestead patent No. 19222 by the Governor General over a tract of agricultural land in San Jose, Nueva Ecija, measuring 13 hectares, 85 ares, and 34 centares.
On July 14, 1932, Original Certificate of Title No. 3842 was issued in favor of Esteban Corpuz by the Register of Deeds of Nueva Ecija.

On March 28, 1933, Esteban Corpuz executed a sale with option to repurchase in favor of spouses Leocadio L. Beltran and Maria del Rosario.
On July 11, 1935, Esteban Corpuz performed a direct sale of the same property to the same spouses, resulting in the issuance of Transfer Certificate of Title No. 9388 and the subsequent possession of the land by the vendees.

The plaintiffs instituted an action for the annulment of two deeds of sale (one containing a pacto de retro and another absolute) executed by their predecessor-in-interest.
The Court of First Instance of Nueva Ecija dismissed the complaint, basing its decision on the allegation that the action was time-barred by prescription, having been instituted more than 17 years after the sale of the land.
On appeal, the plaintiffs contended that in actions for annulment where the sales are alleged to be void ab initio due to violations of statutory provisions, the defense of prescription is inapplicable.

Whether the sales are void ab initio under Section 116 of Act No. 2874 because they were executed within five years from the issuance of the homestead patent.
Whether, in an action aimed at nullifying a contract that is void from its inception, the defense of prescription—which ordinarily bar claims after a certain period—can be properly invoked.
The applicable law for evaluating the validity of the sales: Should the determination be based on Act No. 926 under which the patent was issued or on Act No. 2874 which contains the restrictive provisions regarding the sale of homestead lands?

Whether the remedy of annulment for the deed of sale, purported to be void ab initio, is susceptible to the defense of prescription given the long lapse of time since the sale.
Whether the defense of prescription can operate when the annulment action targets a contract that is inherently void from its inception.
Which statutory regime governs the validity of the executed sales—the provisions of Act No. 926, under which the homestead patent was originally issued, or the limitations imposed by Section 116 of Act No. 2874?
Whether the established vested rights under Act No. 926 can be negated by subsequent restrictive provisions in Act No. 2874 in relation to the disposition of the homestead land.