G.R. No. 162934 - Heirs of Castillo vs. Lacuata-Gabriel

In 1922, Basilio (also known as Cecilio) Claudel acquired Lot No. 1230 of the Muntinlupa Estate Subdivision in the poblacion of Muntinlupa, Rizal, covering 10,107 square meters.
He secured Transfer Certificate of Title (TCT) No. 7471 from the Registry of Deeds in 1923 and duly declared the lot in his name, as evidenced by the latest Tax Declaration No. 5795.
Basilio consistently paid the real estate taxes on the property until his death in 1937, and thereafter his widow “Basilia” and later his son Jose, one of the petitioners, continued paying the taxes.

The property became the subject of prolonged litigation among two branches of the Claudel family:

The children of Cecilio (Heirs of Cecilio) – including Modesta, Loreta, Jose, Benjamin, Pacita, Carmelita, Roberto, Mario, Leonardo, Arsenia Villalon, and Felisa Claudel.
The brother and sisters of Cecilio (Siblings of Cecilio) – namely, Macario, Esperidiona, Raymunda, and Celestina, along with their descendants.

In 1972, the Heirs of Cecilio partitioned the lot among themselves and obtained corresponding Transfer Certificates of Title:

On December 7, 1976, the Siblings of Cecilio (private respondents) filed Civil Case No. 5276-P with the Court of First Instance of Rizal.
Their complaint was for cancellation of titles and reconveyance with damages, alleging that in or about 1930 their parents had purchased several portions of the property from the late Cecilio for the nominal sum of P30.00.
Evidence offered by the Siblings consisted solely of a subdivision plan dated March 25, 1930, purporting to show the portions sold to them.
The trial court dismissed the complaint on several grounds:

Failure to name the specific real parties in interest.
Absence of any documentary evidence proving the alleged sale.
The applicable Statute of Frauds precluded oral testimony to prove the sale.
Prescription of the action, considering the lapse of more than 30 years since the alleged sale.

That the trial court erred in dismissing their complaint despite purported conclusive evidence.
That a subdivision plan (Exhibit A) should have been given credence as proof of the alleged sale.
That the titles issued in the names of the Heirs of Cecilio should be declared null and void.

The Court of Appeals reversed the decision of the trial court on several grounds:

The omission of naming the real parties in interest was not fatal since the court could have allocated the lots to the Siblings, leaving them to settle partition issues amongst themselves.
The fact that the respondents were residing on the disputed properties was interpreted as a sign of toleration by the deceased Cecilio.
Oral evidence was admitted under the premise that the Statute of Frauds applies only to executory contracts and not to consummated sales.
The defense of prescription was rejected since the action was for cancellation of titles (issued in 1976) and not for the recovery of possession of the real property.

Cancellation of TCT Nos. 395391, 395392, 395393, and 395394 held by the Heirs of Cecilio.
Execution of deeds of reconveyance for designated portions:

Clarification that the remaining parts of the lot (1230-E and 1230-F) were to be adjudicated to Cecilio or his heirs, meaning the Heirs of Cecilio would receive nothing further.

The central issue before the Supreme Court was whether the appellate court committed a reversible error in addressing the true ownership and the evidentiary requirements.
The Supreme Court held that the factual findings of the trial court, including the conclusive weight of the Torrens titles and the prescriptive period, must prevail.
Ultimately, the petition for review on certiorari was granted, reversing the Court of Appeals and reinstating the trial court’s dismissal of the cancellation and reconveyance suit.

Whether a contract of sale of land may be proven solely by oral evidence despite the Statute of Frauds, especially in a dispute involving a third party.
Whether the prescriptive period for filing an action for cancellation of titles and reconveyance with damages should be counted from the alleged date of sale (circa 1930) or from the date when the contested titles were issued (1976).
Whether the failure to prosecute the action in the name of the actual and specific real party in interest is a fatal defect in the complaint.
Whether the possession of the property by the respondents (Siblings of Cecilio) and their payment of “taxes” can be interpreted as an acknowledgment of the petitioners’ (Heirs of Cecilio’s) ownership despite contrary oral agreements.
The extent to which the superiority of documentary evidence (the Torrens title and tax declarations) should outweigh a subdivision plan and oral testimony in proving title.