G.R. No. 95305 - Lindain vs. Court of Appeals

The petitioners—Elena, Oscar, Celia, Teresita, and Virgilio, all surnamed Lindain—were minors and the registered owners of a parcel of land evidenced by Transfer Certificate of Title (TCT) No. NT-63540 (Exhibit D-1).
Their mother, Dolores Luluquisin, acted as their legal guardian and administrator of the property upon being widowed.

On November 7, 1966, while still the guardian of her minor children, Dolores Luluquisin executed a Deed of Absolute Sale of Registered Land (Exhibit 2) selling the property for P2,000 to the respondents, spouses Apolonia Valiente and Federico Ila.
The Deed of Absolute Sale was duly notarized and later registered in the Register of Deeds for the Province of Nueva Ecija, resulting in the issuance of TCT No. NT-66311 to the vendees.
Both parties admitted the sale fact; however, there was initial reluctance by the defendants due to the legal irregularity—the property belonged to minors and thus required judicial authority for its alienation.

Counsel for both parties (the late Atty. Arturo B. Pascual for the defense and Atty. Eustaquio Ramos for the vendor) advised that the sale could proceed without judicial approval since the property's value was below P2,000.
Despite the advice, the petitioners later contested the validity of the sale, arguing that the proper judicial authority was not obtained when disposing of the minors’ property.

The Regional Trial Court of San Jose City, on May 25, 1989, ruled in favor of the petitioners by:

Declaring the deed of sale null and void.
Ordering the cancellation of TCT No. NT-66311 and the issuance of a new certificate in the names of the minors.
Directing the respondents to surrender possession of the property while acknowledging certain rights as buyers in good faith.

On appeal, the Court of Appeals reversed the trial court’s ruling, holding that the sale was valid since the property’s value was less than P2,000 and that the minors’ right to rescind had prescribed, given their ages.

The petitioners elevated the case on certiorari to the Supreme Court, contending that the decision of the Court of Appeals erred in reversing the trial court’s findings.
The principal dispute centered on whether judicial approval was necessary for the sale of the minors’ property by their mother as their legal administrator.

Whether the sale of the property belonging to minors by their mother—acting as legal administrator—required prior judicial approval.
Whether the provisions of Article 320 of the New Civil Code, which mandates a court bond and approval for transactions involving property valued over P2,000, extend to the sale of property even when the amount involved is less than P2,000, as it pertains to disposals by a guardian.

Whether the respondents can be considered bona fide purchasers given their awareness of the absence of the requisite judicial authority during the transaction.
Whether knowledge of the sale’s irregularity disqualifies the respondents from claiming the protection of good faith under relevant jurisprudence.

Whether the minors’ action for reconveyance of the property, initiated in 1987 despite the sale having occurred in 1966, was within the prescriptive period for real actions over immovables under Article 1141 of the Civil Code.