Heirs of Ingjug-Tiro vs. Spouses Casals

An action to declare the inexistence or nullity of a contract is imprescriptible and cannot be barred by laches, rendering a dismissal on such grounds premature when the validity of the underlying contract remains unresolved.

Mamerto Ingjug died during the Second World War, leaving a parcel of land titled in his name. His five children—Romana, Francisco, Francisca, Luisa, and Maria—succeeded to the ownership of the property in common. On July 9, 1965, Luisa, Maria, Guillerma (daughter of Francisca), and Eufemio Ingjug (husband of Romana) sold the entire property to respondents through a Deed of Sale of Unregistered Land, representing themselves as the sole surviving heirs. Upon the issuance of a reconstituted title, the vendors executed an Extrajudicial Settlement and Confirmation of Sale in 1967, which purportedly bore the thumbprint of Francisco Ingjug, who had died on August 17, 1963. A new title was subsequently issued in respondents' names.

• The Inheritance: Mamerto Ingjug died during the Second World War, leaving a 5,354-square meter parcel of land covered by Original Certificate of Title No. RO-0376. Ownership devolved upon his five children: Romana, Francisco, Francisca, Luisa, and Maria, all surnamed Ingjug, who owned the property in common prior to partition.
• The 1965 Sale: On July 9, 1965, Luisa, Maria, Guillerma (daughter of Francisca), and Eufemio Ingjug sold the entire property to respondents through a Deed of Sale of Unregistered Land. The vendors represented to the vendees that they were the only surviving heirs of Mamerto Ingjug.
• The 1967 Settlement: Following the reconstitution of the title, the vendors executed an Extrajudicial Settlement and Confirmation of Sale in 1967. The document purportedly bore the thumbprint of Francisco Ingjug, who had died on August 17, 1963. Eufemio Ingjug, a signatory to both deeds, was not a direct heir but a son-in-law (Eufemio Tiro, husband of Romana). Transfer Certificate of Title No. T-1150 was subsequently issued in respondents' names.
• The Action: On August 10, 1992, petitioners—representing the heirs of Romana, Francisco, and Francisca—filed a complaint for partition, recovery of ownership and possession, and declaration of nullity of the deeds. Petitioners alleged they only discovered the sale and the title transfer in 1990.
• Respondents' Position: Respondents spouses Carlos Climaco and Lydia Climaco, and spouses Jose Climaco Jr. and Blanquita Climaco moved to dismiss, arguing that the original title was lost during the war and they bought the property in good faith from the heirs pending reconstitution. They claimed ownership by prescription, asserting more than 25 years of adverse possession since the title transfer.

• Imprescriptibility of Registered Land: Petitioners argued that the litigated property was originally registered under the Torrens system and therefore cannot be acquired by prescription or adverse possession; this imprescriptibility extends to hereditary successors who step into the shoes of the registered owner by operation of law.
• Inapplicability of Laches: Petitioners maintained that laches cannot be a valid defense to claim ownership of Torrens-title land, arguing that when prescription does not lie, neither does laches.
• Void Contracts: Petitioners contended that the deeds were void ab initio because their hereditary shares were sold without their knowledge and consent by co-owners who could not validly dispose of the entire property, and because the signatories included a non-heir (Eufemio Tiro) and a deceased person (Francisco Ingjug).
• Implied Trust and Bad Faith: Petitioners asserted that respondents were not in possession in the concept of owners but were holding the property in trust for the excluded heirs, and that respondents' possession could not be characterized as adverse possession in good faith.

• Prescription and Laches: Respondents argued that the action was barred by prescription and laches, emphasizing that 27 years had lapsed from the 1965 sale and 25 years from the 1967 title transfer before the complaint was filed in 1992, far exceeding the 10-year prescriptive period for reconveyance based on an implied trust.
• Good Faith Purchase: Respondents maintained that they acquired the property for value and in good faith, believing the vendors were the sole surviving heirs of Mamerto Ingjug, and that the vendors executed the Extrajudicial Settlement and Confirmation of Sale upon the issuance of the reconstituted title.

• Prescription and Laches: Whether an action for partition and reconveyance seeking the declaration of nullity of simulated deeds is barred by prescription and laches.
• Premature Dismissal: Whether the trial court correctly dismissed the complaint on the ground of prescription and laches without first resolving the validity of the underlying contracts.

• Prescription and Laches: Prescription and laches do not bar an action seeking the declaration of nullity of a void contract. The action or defense for the declaration of the inexistence of a contract does not prescribe pursuant to Article 1410 of the Civil Code. Laches, being an equitable doctrine, cannot prevail over the positive mandate of statutory law conferring imprescriptibility.
• Premature Dismissal: The dismissal was premature and reversible error. The lower courts skirted the issue of the validity of the contracts, which is the basic hypothesis of the action. If the deeds are indeed void ab initio—due to the participation of a non-heir disposing of property he did not own, or the simulation involving a deceased person—the right to sue is imprescriptible. Factual matters regarding heirship, fraud, possession, and good faith require presentation and appreciation of evidence, necessitating a full-blown trial.

• Imprescriptibility of Actions to Declare Inexistence of Contracts — Actions or defenses for the declaration of the inexistence of a contract do not prescribe. Laches cannot be set up to resist the enforcement of an imprescriptible legal right, as equity (laches) should never contravene statutory law (Aequetas nunguam contravenit legis).
• Nemo Dat Quod Non Habet — No one can give what he does not have. Co-owners cannot validly dispose of the entire property to the exclusion of other co-owners without their knowledge and consent; any such sale is void insofar as it prejudices the shares of the excluded co-owners.
• Contractual Capacity of Deceased Persons — To form a valid and legal agreement, it is necessary that parties be juristic entities at the time of consummation. A contract is simulated, false, and void ab initio if a party appearing to have executed it was already dead at the time of its execution.

• "The action or defense for the declaration of the inexistence of a contract does not prescribe."
• "Nemo dat quod non habet. No one can give more than what he has. The sale of the realty to respondents is null and void insofar as it prejudiced petitioners' interests and participation therein."
• "Certainly, laches cannot be set up to resist the enforcement of an imprescriptible legal right, and petitioners can validly vindicate their inheritance despite the lapse of time."

• De Guzman v. Court of Appeals, 156 SCRA 701 (1987) — Followed. Cited for the principle that registration does not vest title but is merely evidence thereof; the holder of a certificate of title gets no better title than what he actually has.
• Coronel v. Ona, 33 Phil. 456 (1916) — Followed. Cited for the doctrine that a contract is simulated, false, and void if a party thereto was already dead at the time of its execution.
• Agne v. Director of Lands, 181 SCRA 793 (1990) — Followed. Cited for the rule that in actions for reconveyance predicated on the fact that the conveyance was void ab initio, a claim of prescription is unavailing.

• Article 1458, Civil Code — Defines the contract of sale, requiring the vendor to obligate himself to transfer ownership. Applied to emphasize that vendors cannot dispose of what does not belong to them.
• Article 1410, Civil Code — Provides that actions for the declaration of the inexistence of a contract do not prescribe. Applied as the positive mandate preempting the defense of laches and prescription.

Mendoza, Quisumbing, Buena, and De Leon, Jr.