Case Summary (G.R. No. 226065)
Relevant Dates and Procedural History
OCT issued to Alido by free patent: March 17, 1975. Alleged oral sale and respondent’s possession: 1978. Alido’s death: September 18, 1996. Heirs’ Deed of Adjudication and attempt to register property: September 8, 2009. Verified petition before RTC for surrender of owner’s duplicate title: filed thereafter. RTC decision (September 24, 2012) ordered respondent to surrender owner’s duplicate. RTC denied reconsideration (January 23, 2013). Court of Appeals reversed and dismissed petition (January 20, 2016) and denied reconsideration (May 31, 2016). Present petition seeks reversal of the CA decisions.
Material Facts
Alido registered the land under OCT No. F‑16558 via free patent (1975). Respondent Campano allegedly took possession of the land and custody of the owner’s duplicate title in 1978, paid realty taxes, and treated the property as her own. Petitioners (Alido’s heirs) later executed a Deed of Adjudication (2009) and sought the owner’s duplicate title for registration in their names; respondent refused to surrender the duplicate, prompting the verified petition.
Issues Presented
I. Whether there was a valid sale of the real property between Alido and respondent despite lack of a public instrument.
II. Whether petitioners’ action is barred by laches.
RTC Holding
The RTC ruled for petitioners, ordering respondent to surrender the owner’s duplicate. The trial court held that (1) as the registered owner under Torrens, Alido’s title could not be defeated by prescription or adverse possession; (2) the alleged sale was oral and therefore invalid because the sale of real property must appear in a public instrument under Article 1358; and (3) delivery of the certificate of title did not validate the transaction.
Court of Appeals Holding
The CA reversed, holding that (1) an oral sale of real property is not void but unenforceable under the Statute of Frauds only where executory; however, when the sale has been executed (partially or completely), it is binding among the parties; (2) respondent’s long possession since 1978, custody of the owner’s duplicate title, and payment of realty taxes evidenced an executed sale; (3) while the sale violated the five‑year prohibition on alienation of lands acquired by free patent (hence void as against public policy), petitioners’ claim was barred by laches because they waited many years (from 1978 to 2010) before asserting their rights.
Petitioners’ Contentions
Petitioners argued the Torrens title is indefeasible and cannot be defeated by adverse possession or prescription; respondent presented no documentary deed of sale; as registered owners they were entitled to the title’s owner’s duplicate; and laches should not be applied because it would perpetrate injustice and a certificate of title is conclusive evidence of ownership.
Respondent’s Contentions
Respondent contended petitioners were barred by laches after more than three decades of her possession in the concept of owner with apparent knowledge by Alido and heirs; she maintained the oral sale had been executed; petitioners ceased paying taxes after the sale; and absence of a public deed does not render an executed oral sale void.
Court’s Legal Framework on Torrens Title
The Supreme Court reaffirmed that a Torrens title is indefeasible in that it cannot be collaterally assailed and ownership supported by a certificate of title generally cannot be defeated by adverse possession or prescription. However, the Court emphasized that in this case the validity of OCT No. F‑16558 itself was not directly challenged; respondent did not claim title by acquisitive prescription but claimed transmission of rights from Alido by virtue of an oral sale. Thus, the dispute centered on whether the sale occurred and, if so, its legal effect.
Oral Sale and the Statute of Frauds
The Court applied well‑established principles: Article 1358 and the Statute of Frauds (Article 1403(2)) require certain contracts affecting real rights to be in a public instrument for evidentiary enforceability, but failure to conform to the formal requirement does not render the contract void. The Statute’s main effect is to render unenforceable executory oral contracts absent the required writing; it does not invalidate contracts that have been executed in whole or in part. Jurisprudence recognizes that an oral sale that has been executed—manifested by acts such as possession, payment of taxes, improvements, and custody of the title—produces legal effects between the parties.
Application of Oral Sale Principles to the Facts
The Court agreed with the CA that respondent’s continuous possession since 1978, custody of the owner’s duplicate title, and payment of realty taxes were indicia that the oral sale had been executed. Petitioners did not allege fraud or illegality in respondent’s acquisition; Alido did not protest the possession during her lifetime. Consequently, the mere absence of a written deed did not in itself invalidate the sale as between Alido and respondent.
Free Patent Five‑Year Prohibition and Voidness of the Sale
Because OCT No. F‑16558 was issued pursuant to a free patent, the sale in 1978 occurred within three years of issuance (the free patent was issued in 1975). The Court reiterated the settled rule that lands acquired by free patent or homestead cannot be alienated or encumbered within five years from issuance; any sale in violation of this prohibition is void and produces no legal effect, with the original grantee remaining the owner subject to state reversion/escheat proceedings. Thus, although the oral sale between Alido and respondent was executed, it was nonetheless void for violating the five‑year prohibition.
In Pari Delicto and Public Policy Exception
The Court analyzed the applicability of the in pari delicto doctrine (Article 1412(1)), which bars recovery when both contracting parties are equally at fault in an unlawful transaction. The Court explained that where the prohibition protects the grantee’s homestead/right (public policy), the in pari delicto rule is not applied to defeat the grantee’s right to recover the land; jurisprudence permits the grantee (or heirs) to reclaim property alienated in violation of the homestead/free patent restriction so as to advance public policy protecting the homestead grant. Accordingly, in pari delicto did not prevent petitioners from reclaiming the land.
Laches Analysis and Its Limits
The Court addressed laches as an equitable doctrine that may bar relief when a claimant unreasonably delays asserting a right to the prejudice of another. However, laches cannot be applied to defeat actions that are imprescriptible or to contest void transactions where the public policy underlying statutory protection precludes its application. Because
...continue readingCase Syllabus (G.R. No. 226065)
Title, Court, and Citation
- Supreme Court, Second Division, G.R. No. 226065, July 29, 2019.
- Decision penned by Justice Reyes, Jr., J.
- Case caption: Heirs of Soledad Alido, petitioners, vs. Flora Campano, or her representatives and the Register of Deeds, Province of Iloilo, respondents.
- The petition is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking reversal of the Court of Appeals (CA) Decision dated January 20, 2016 and Resolution dated May 31, 2016 in CA-G.R. CV No. 04983, which had reversed the Regional Trial Court (RTC), Branch 33, Iloilo City Decision dated September 24, 2012.
Factual Background
- The controversy concerns a parcel of land in Barangay Abang-Abang (also rendered "Abangabang" in parts of the rollo), Alimondian, Iloilo, covered by Original Certificate of Title (OCT) No. F-16558, registered in the name of Soledad Alido.
- On March 17, 1975, Soledad Alido registered the parcel of land under her name (free patent issued and OCT No. F-16558 issued).
- In 1978, Flora Campano (respondent) took possession of the land and obtained the owner’s duplicate of OCT No. F-16558, and paid the realty taxes on the property; it is alleged that Alido sold the property to respondent.
- Soledad Alido died on September 18, 1996, leaving children Reynaldo Almendral, Maggie Almendral-Sencil, and Rodrigo Almendral.
- On September 8, 2009, the heirs of Soledad Alido executed a Deed of Adjudication over the property and sought to register the property in their names; they attempted to retrieve OCT No. F-16558 but respondent refused to surrender the owner’s duplicate.
- The heirs (petitioners) filed a verified petition before the RTC seeking an order for respondent to surrender the owner’s duplicate of OCT No. F-16558.
RTC Proceedings and Decision (September 24, 2012)
- The RTC granted petitioners’ verified petition and ordered respondent to surrender the owner’s duplicate of OCT No. F-16558.
- RTC reasoning:
- Alido was the registered owner under the Torrens system; respondent could not assert any right over the registered land.
- Payment of realty taxes does not prove ownership.
- As registered owner, Alido’s right could not be defeated by prescription.
- The purported sale between Alido and respondent was not valid because it was an oral sale.
- Article 1358 of the Civil Code requires that acts and contracts creating, transmitting, modifying or extinguishing real rights over immovable property must appear in a public instrument; hence the oral sale was invalid.
- Delivery of the certificate of title did not validate the oral sale.
- RTC disposition: Ordered respondent Flora Campano to surrender the owner’s duplicate of OCT No. F-16558 to the Register of Deeds of Iloilo; provided alternative directions for annulment and issuance of a new owner’s duplicate in the event respondent was not amenable to process.
- The RTC denied respondent’s motion for reconsideration in a Resolution dated January 23, 2013.
Court of Appeals Decision and Resolution (January 20, 2016; May 31, 2016)
- The CA granted respondent’s appeal and dismissed petitioners’ verified petition, reversing the RTC Decision.
- CA’s principal holdings and reasoning:
- An oral sale of real property is not void but is unenforceable under the Statute of Frauds when the Statute applies; however, the Statute of Frauds (Article 1403(2)) applies only to executory contracts, not to partially or completely executed contracts.
- The CA found the oral sale between Alido and respondent to have been executed because respondent possessed the owner’s duplicate of title, paid realty taxes, and was in peaceful possession of the land since 1978.
- The CA observed that the sale violated the five-year prohibition on alienation of lands subject of a free patent because the free patent was issued on March 17, 1975 and the sale occurred in 1978; thus the sale was void for violating the terms of the free patent.
- Despite the sale’s voidness under the free patent restriction, the CA held that petitioners’ claim was barred by laches because respondent had possessed the property and custody of OCT No. F-16558 since 1978 without being disturbed by Alido, and petitioners only filed their complaint in 2010 (the CA noted petitioners waited 14 more years before filing).
- CA disposition: Reversed the RTC and dismissed the complaint filed by the heirs of Soledad Alido.
- The CA denied petitioners’ motion for reconsideration in a Resolution dated May 31, 2016.
Issues Presented to the Supreme Court
- I. Whether there was a valid sale of real property between Alido and respondent (i.e., whether the oral sale was valid and/or enforceable).
- II. Whether petitioners’ action had been barred by laches.
Arguments of Petitioners (as presented in the record)
- A Torrens title is indefeasible, incontrovertible, and imprescriptible; Alido’s title could not be defeated by respondent’s adverse possession or prescription.
- Respondent had no documentary proof that Alido actually sold the parcel of land to her; absence of a deed of sale undermines respondent’s claim.
- As the legal owners of the parcel, petitioners are entitled to recover the owner’s duplicate of OCT No. F-16558.
- In the interest of higher justice, laches should not be applied because applying laches would perpetrate injustice by preventing return of the owner’s duplicate to the rightful owners; a certificate of title is proof of ownership that cannot be defeated by adverse possession or prescription.
Arguments of Respondent (as presented in the record)
- Laches barred petitioners from instituting the verified petition because respondent had possessed the land in the concept of an owner for more than three decades with the explicit knowledge of Alido and her heirs.
- It took 32 years (as respondent claimed) before petitioners acted on their rights; respondent emphasized long uninterrupted possession and payment of taxes under her name.
- Petitioners failed to produce proof disputing the sale between respondent and Alido; Alido and her heirs had stopped paying realty taxes after the alleged sale.
- The lack of a written public document did not render the sale void; the Statute of Frauds does not render executed oral sales invalid.
- Petitioners’ reliance on the indefeasibility of Torrens title is misplaced because respondent asserts she acquired the property by purchase from Alido.
Legal Principles Discussed by the Supreme Court
- Torrens title and indefeasibility:
- A Torrens title is indefeasible; it cannot be assailed collaterally and cannot be altered, modified, or cancelled except in a direct proceeding in accordance with l