G.R. No. 211425 - Heirs of Arao vs. Heirs of Eclipse

The case is a Petition for Review on Certiorari filed under Rule 45 of the Rules of Court, challenging prior decisions from the RTC and the CA.
The dispute concerns the ownership and possession of a 5,587‑square‑meter lot (Lot No. 1667) in Ugac Sur, Tuguegarao City, Cagayan.
The petitioners are the heirs of Tomas Arao (represented by Proceso Arao, Eulalia Arao-Maggay, Gabriel Arao, and Felipa A. Delelis) while the respondents are the heirs of Pedro Eclipse, Eufemia Eclipse-Apagulayán, Honorato Eclipse, and Maria Eclipse-Dayag.

The property was originally owned by Policarpio Eclipse and his wife Cecilia Errera, being evidenced by Original Certificate of Title (OCT) No. 1546.
In 1969, a Deed of Absolute Sale dated September 5, 1969 allegedly executed by Policarpio (with the consent of his wife Cecilia) purportedly sold the lot to Tomas Arao.
The registration of this deed resulted in the cancellation of OCT No. 1546 and the issuance of Transfer Certificate of Title (TCT) No. T-13798 in Tomas’ name.
Subsequently, on June 30, 1977, Tomas executed another Deed of Absolute Sale transferring the property to his children, leading to the registration of TCT No. T-39071 in the names of Eulalia and Felipa Arao.
Additional transactions include:

A Deed of Sale dated June 25, 1940 executed by the heirs of Policarpio in favor of Paulino Arao, which by operation of law transmitted the property to Tomas.
A Deed of Sale dated November 14, 1949 executed by Gavino Arao, later identified as the son of Paulino, in favor of Tomas.

Respondents allege that the 1969 Deed of Absolute Sale is a forgery since Policarpio and Cecilia were already deceased (Policarpio died in 1936 and Cecilia in 1925) at the time of its purported execution.
As a consequence, respondents argue that the subsequent title transfers, including that to Tomas and his heirs, are based on a void instrument and should be nullified.
Petitioners, however, contend that their title is derived not solely from the fraudulent 1969 deed but is substantiated by the valid 1940 transaction and further supported by the deed executed by Gavino Arao.
Furthermore, petitioners raised the issue of prescription, arguing that actions for annulment of title and reconveyance prescribe in 10 years; however, this defense was denied by the lower court.

The RTC, in its decision dated April 23, 2009, found the 1969 Deed of Sale to be a forgery yet dismissed the complaint on the ground of laches—holding that the plaintiffs delayed their claim for over 32 years.
On appeal, the Court of Appeals (CA) ruled on June 7, 2013 that laches is not applicable since an action based on the nullity of a void contract is imprescriptible under Article 1410 of the Civil Code.
The CA reaffirmed that the 1969 deed was forged and thus null and void, compelling the reconveyance of the property to the rightful heirs of Pedro Eclipse by declaring the subsequent titles null and void.
The petitioners’ motion for reconsideration of the CA Decision was denied in a Resolution dated January 30, 2014, prompting the filing of the present petition before the Supreme Court.

Whether or not the Court of Appeals erred in finding that laches is not applicable in light of Article 1410, which renders actions to declare a void contract imprescriptible.
Whether or not the CA committed error in disregarding the validity of the June 25, 1940 Deed of Sale executed by the heirs of Policarpio in favor of Paulino Arao.
Whether or not the CA erred by not declaring petitioners as buyers in good faith and for value despite their reliance on a series of transactions, including the allegedly valid deed despite the taint of the forged 1969 instrument.