Spouses Viovicente vs. Spouses Viovicente

An action for reconveyance based on a void or spurious deed of sale is imprescriptible, as it is virtually an action for the declaration of nullity of a contract, which does not prescribe under Article 1410 of the Civil Code; a forged or simulated deed cannot serve as the source of ownership, and the resulting Torrens title is likewise void.

Petitioners Spouses Teodorico and Dominga Viovicente are the parents of respondent Danilo Viovicente. Teodorico was the registered owner of a property in Pacita Complex II, San Pedro, Laguna, covered by TCT No. T-264547, which he acquired through a GSIS real estate loan and fully paid through salary deductions over fifteen years. Danilo, the eldest son, allegedly proposed an arrangement whereby Teodorico would obtain the GSIS loan for the downpayment while Danilo would pay the amortizations, after which Teodorico would convey the property to him. The dispute arose from two deeds of sale—one dated June 24, 1993 and another dated December 14, 1995—both of which petitioners claimed were void, prompting them to file a complaint for reconveyance and nullity of sale.

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Teodorico Viovicente was the registered owner of a property located at Pacita Complex II, Phase I, Blk 17, Lot 12, San Pedro, Laguna, covered by TCT No. T-264547. He acquired it through a GSIS real estate loan costing P111,180.00 and paid it through salary deductions over fifteen years, with the loan fully paid on December 8, 1992. He was married to Dominga, and respondent Danilo Viovicente was their eldest son.

According to petitioners, on June 24, 1993, Danilo went to their house in Tacloban City and demanded that they sign a Deed of Absolute Sale. They initially refused because the property was intended for Danilo's siblings for their eventual study in Manila. Danilo angrily shouted and threw a briefcase at Teodorico, missing him. Out of fear, both Teodorico and Dominga signed the deed without reading its contents and without receiving any payment as consideration. When Teodorico later secured a copy of the deed in 2002, he noted that the acknowledgment portion falsely stated that he personally appeared before a notary in Makati City on July 14, 1993, which was physically impossible since he reported for work at GSIS-Tacloban City that day.

Respondent Danilo presented a different version. He testified that sometime in 1983, Teodorico suggested applying for a loan to cover the downpayment for a house in Manila while Danilo would pay the amortizations, with the understanding that Teodorico would eventually convey the property to him. Danilo claimed that Teodorico reluctantly signed the Deed of Sale dated June 24, 1993 after being assured the property could still be used by his siblings. To facilitate the transfer, Danilo gave the deed to his brother Phio, who executed an identical deed but with a different date—December 14, 1995—supposedly to avoid paying surcharges and penalties for late processing. Danilo denied using force or intimidation.

In 2002, petitioners learned that the property had been transferred to the names of Danilo and his wife Alice and that TCT No. T-356656 had been issued. Petitioners denied ever signing the Deed of Sale dated December 14, 1995 and denied personally appearing before a notary public in Makati for its notarization. The GSIS-Tacloban City certified that Teodorico reported for work on December 14, 1995. NBI Senior Document Examiner Noel Cruz testified that Teodorico's signatures on the Deed of Sale dated December 14, 1995 and other documents were written by the same person, but he noted "snopaked" entries in the deed, with the figure "5" superimposed on "3," concluding that the deed was actually executed in 1993, not 1995. The trial court found petitioners' testimonies credible, ruling that the Deed of Sale dated June 24, 1993 was void for lack of consideration and that the Deed of Sale dated December 14, 1995 was actually the same document with altered entries.

• Single Document: Petitioners argued that there was actually only one document signed in 1993 for which they did not receive any consideration, and that the Deed of Sale dated December 14, 1995 was merely the same 1993 deed with altered entries.
• Presumption of Due Execution: Petitioners maintained that the Court of Appeals erred in ruling that the notarized Deed of Sale dated December 14, 1995 enjoyed the presumption of due execution, since that instrument was not even formally offered in evidence by respondents, and the presumption was sufficiently overturned by the apparent alterations on the face of the instrument itself.
• Presumption of Validity of Torrens Title: Petitioners contended that the presumption of validity of Torrens Title does not apply to the simulated Deed of Sale dated December 14, 1995, which was intended to evade payment of taxes, and that respondents' own witness testified that the 1995 deed and the 1993 deed were one and the same, with a superimposed number "5" over "3," thereby establishing forgery.
• Prescription: Petitioners argued that the Court of Appeals erred in holding that the action for reconveyance had prescribed, because the action was based on the nullity of a spurious deed, which is imprescriptible under Article 1410 of the Civil Code.

• Validity of the Deed and Title: Respondents countered that the element of fraud was never proven because TCT No. T-356656 was issued by virtue of the Deed of Sale dated December 14, 1995 and petitioners' signatures thereon were genuine.
• Consideration: Respondents argued that the deed had a valid consideration of P111,180.00 and enjoyed the presumption of due execution of a public document, just as their Torrens title enjoyed the presumption of regularity in its issuance.
• Prescription: Respondents maintained that the Court of Appeals correctly held that petitioners' action for reconveyance had already prescribed, TCT No. T-356656 having been issued on January 16, 1996 while the action was filed only in 2003.

• Prescription: Whether petitioners' causes of action for reconveyance and nullity of sale are barred by prescription.
• Validity of Conveyance: Whether there was a valid conveyance of the subject property in favor of respondents.

• Prescription: No. The action for reconveyance based on a void or spurious deed of sale is imprescriptible, being virtually an action for the declaration of nullity of a contract under Article 1410 of the Civil Code.
• Validity of Conveyance: No. There was no valid conveyance because the Deed of Sale dated December 14, 1995 was a forged or spurious document—actually the 1993 deed with altered entries—and the Deed of Sale dated June 24, 1993 was void for total absence of consideration under Articles 1458 and 1471 of the Civil Code.

• Prescription: The allegations in the complaint determine the cause of action. Petitioners' complaint alleged that the sale was void for absence of consideration and that the deed was spurious. An action for reconveyance based on a fictitious or spurious deed of sale is virtually an action for the declaration of nullity of the contract, which does not prescribe under Article 1410 of the Civil Code. The Court of Appeals erred in applying the four-year prescriptive period for actions based on fraud under D.B.T. Mar-Bay Construction, Inc. vs. Panes, because that rule applies to actions for reconveyance based on fraud, not to actions seeking the declaration of nullity of a void deed. The distinction is critical: a void contract has no legal effect and cannot be ratified by prescription, whereas a voidable contract is susceptible to prescription. Since the complaint alleged nullity of a spurious deed, the action was imprescriptible. Additionally, the issue of whether the Deed of Sale dated December 14, 1995 was spurious was tried with the implied consent of the parties, as the trial court delved into it without objection from respondents, and thus under Rule 10, Section 5 of the 1997 Rules of Civil Procedure, the matter was treated as though raised in the pleadings.

• Validity of Conveyance: Three independent grounds established that the Deed of Sale dated December 14, 1995 was a forged or spurious document. First, NBI Senior Document Examiner Noel Cruz testified that the "snopaked" entries on the deed revealed the original figure "3" beneath the superimposed "5," confirming that the document was actually executed in 1993, not 1995. Second, respondents admitted in their Answer that the Deed of Sale dated December 14, 1995 was unilaterally executed by Danilo's brother Phio—not by the owners—to avoid surcharges and penalties, meaning there was no actual sale on that date by the real owners. Third, Teodorico categorically denied having signed the deed and proved through GSIS certification that he was in Tacloban City on December 14, 1995, making it physically impossible for him to have appeared before a notary public in Makati. These circumstances were sufficient to overthrow the presumption of genuineness and due execution of the notarized deed. Consequently, TCT No. T-356656, which emanated from the spurious deed, was also void. As for the Deed of Sale dated June 24, 1993, it was void for lack of consideration. Article 1458 of the Civil Code requires a price certain in money or its equivalent as an essential element of a valid contract of sale, and Article 1471 provides that if the price is simulated, the sale is void. Petitioners consistently testified that they did not receive any payment, and Danilo failed to present evidence of his supposed amortization payments or his agreement with Teodorico. GSIS certifications confirmed that Teodorico himself fully paid the housing loan. The trial court's factual findings on the credibility of petitioners' testimonies were affirmed, the appellate court having erred in disregarding them.

• Imprescriptibility of Actions for Declaration of Nullity of Contracts — Under Article 1410 of the Civil Code, the action or defense for the declaration of the inexistence of a contract does not prescribe. An action for reconveyance based on a fictitious or spurious deed of sale is virtually an action for the declaration of nullity, which is imprescriptible. The four-year prescriptive period for actions based on fraud applies only to valid but voidable transactions, not to deeds that are void ab initio.
• Void Deed Cannot Be Source of Ownership — A forged or spurious deed cannot be the source of ownership. A Torrens title issued pursuant to a void deed is itself void. The registered owner does not lose title, and the assignee in the forged deed acquires no right or title to the property.
• Elements of a Valid Contract of Sale — Under Article 1458 of the Civil Code, the elements of a valid contract of sale are: (1) consent or meeting of the minds; (2) determinate subject matter; and (3) price certain in money or its equivalent. Absent any element, the sale is fictitious or void. Under Article 1471, if the price is simulated, the sale is void.
• Presumption of Genuineness and Due Execution of Notarized Documents — A notarized document enjoys the presumption of genuineness and due execution, but this presumption can be overturned by clear and convincing evidence of irregularities in execution and notarization, such as alterations, physical impossibility of personal appearance before the notary, and admission that the deed was unilaterally executed by a third party.

• "The action or defense for the declaration of the inexistence of a contract does not prescribe." — This is the text of Article 1410 of the Civil Code, cited as the controlling provision establishing that petitioners' action for reconveyance based on a void deed was imprescriptible, directly overturning the Court of Appeals' ruling on prescription.

• "title cannot be used to validate the forgery or cure a void sale. Verily, the registered owner does not thereby lose his title, and neither does the assignee in the forged deed acquire any right or title to the property." — This passage, drawn from Heirs of Arao vs. Heirs of Eclipse, articulates the doctrine that a Torrens title derived from a forged or void deed confers no rights, and the original registered owner retains title notwithstanding the issuance of a new certificate.

• "Where, as in this case, the deed of absolute sale states that the purchase price has been paid but in fact has never been paid, the deed of sale is null and void ab initio for lack of consideration." — This formulation, adopted from Spouses Lequin vs. Spouses Vizconde, states the rule applied to the Deed of Sale dated June 24, 1993, which stated a consideration of P111,180.00 that was never actually paid, rendering the deed void.

• Santos vs. Heirs of Lustre, 583 Phil. 118 (2008) — Followed. The Court ruled there that an action for reconveyance on the ground that the certificate of title was obtained by means of a fictitious deed of sale is virtually an action for the declaration of its nullity, which does not prescribe.
• D.B.T. Mar-Bay Construction, Inc. vs. Panes, 612 Phil. 93 (2009) — Distinguished. The Court of Appeals relied on this case for the four-year prescriptive period for actions based on fraud, but the Supreme Court held it inapplicable because petitioners' action was based on nullity of a void deed, not merely on fraud.
• Heirs of Arao vs. Heirs of Eclipse, G.R. No. 211425, November 19, 2018 — Followed. The Court held that title cannot be used to validate forgery or cure a void sale, and all TCTs issued by virtue of a spurious and forged document are null.
• Spouses Lequin vs. Spouses Vizconde, 618 Phil. 409 (2009) — Followed. The Court decreed that where the deed of sale states the purchase price has been paid but in fact has never been paid, the deed is null and void ab initio for lack of consideration.
• Labagala vs. Santiago, 422 Phil. 699 (2001) — Followed. The Court declared the sale void for want of consideration where the buyer admittedly did not pay any centavo, pursuant to Article 1471 of the Civil Code.

• Article 1410, Civil Code of the Philippines — Provides that the action or defense for the declaration of the inexistence of a contract does not prescribe. Applied to hold that petitioners' action for reconveyance based on a spurious and void deed was imprescriptible.
• Article 1458, Civil Code of the Philippines — Defines a contract of sale as one where a party obligates to transfer ownership and deliver a determinate thing, and the other to pay a price certain in money or its equivalent. Applied to identify the essential elements of a valid sale and to determine that the Deed of Sale dated June 24, 1993 lacked the element of price certain.
• Article 1471, Civil Code of the Philippines — Provides that if the price in a contract of sale is simulated, the sale is void. Applied to hold that the Deed of Sale dated June 24, 1993 was void because the stated consideration of P111,180.00 was never actually paid.
• Rule 10, Section 5, 1997 Rules of Civil Procedure — Provides that when issues not raised by the pleadings are tried with the express or implied consent of the parties, they shall be treated as if raised in the pleadings. Applied to allow treatment of the spuriousness of the Deed of Sale dated December 14, 1995 as a properly raised issue, since the trial court delved into it without objection from respondents.

Peralta, C.J. (Chairperson), Caguioa, J. Reyes, Jr., and Lopez, JJ., concurred.