G.R. No. 157954 ; March 24, 2006
PAZ GALVEZ, CARLOS TAM, and TYCOON PROPERTIES, INC., Petitioners, vs. HON. COURT OF APPEALS and PORFIRIO GALVEZ, Respondents.

FACTS

Timotea Galvez died intestate in 1965, leaving a parcel of land. Her compulsory heirs were her daughter, Paz Galvez, and her grandson, Porfirio Galvez, who represented his predeceased father, Ulpiano. In 1970, Paz executed an Affidavit of Adjudication claiming sole ownership and obtained tax declarations in her name. Without Porfirio’s knowledge, Paz sold the property to Carlos Tam in 1992. Tam secured an original certificate of title and later sold the land to Tycoon Properties, Inc., which obtained a transfer certificate of title.
In 1994, Porfirio filed an action for legal redemption and cancellation of documents against Paz, Tam, and Tycoon. The Regional Trial Court declared Paz’s affidavit and the subsequent deeds of sale null and void, ordered the cancellation of the titles, and directed reconveyance of the property to Porfirio upon redemption. The Court of Appeals affirmed this decision.

ISSUE

Whether Porfirio’s action to recover his share is barred by prescription and laches, and whether Tam and Tycoon are buyers in good faith.

RULING

The Supreme Court denied the petition, ruling that Porfirio’s action is not barred. The legal relationship between Paz and Porfirio is one of co-ownership arising from intestate succession, not an implied trust. Under Article 494 of the Civil Code, prescription does not run between co-owners as long as the co-ownership is recognized. Paz’s execution of the affidavit and issuance of tax declarations in her name alone did not constitute a clear and unequivocal act of repudiation communicated to Porfirio. The ten-year prescriptive period for an action based on repudiation of co-ownership only begins from such clear repudiation.
Furthermore, Tam and Tycoon cannot be considered buyers in good faith. Tam purchased the property despite the evident defect in Paz’s title, as she was not the sole heir, and the consideration of Ten Thousand Pesos for a 4,304.5-square-meter lot was grossly inadequate, which should have prompted further inquiry. Tycoon, as Tam’s immediate successor, acquired no better right. The Torrens system does not protect purchasers who buy registered land with knowledge of facts that should put them on inquiry. The titles derived from a void transaction are likewise void.