G.R. No. 196517 , November 11, 2024
Heirs of Antonio Lopez namely Feliza Lopez-Julian, Maria Lopez-Udon, Pedro Lopez, Merilo Lopez, Sylvia Lopez-De Pana, Julio Lopez, Panfilo Lopez and Leotiquio Lopez, represented by Leotiquio Lopez, Petitioners, vs. Spouses Felix and Marita Empaynado, Respondents.

FACTS

Petitioners, the heirs of Antonio Lopez, filed a complaint for reconveyance and damages against respondents, Spouses Felix and Marita Empaynado. Antonio was the registered owner of a lot covered by TCT No. NT-148524. After Antonio’s death in 1986, his son Pedro borrowed PHP 15,000.00 from his aunt, respondent Marita (sister of Antonio’s widow, Lolita), and delivered the owner’s duplicate certificate of title as security. Later, Pedro asked for the title’s return to sell the property and pay the debt, but respondents instead persuaded him to let them facilitate the sale. Respondents convinced Pedro to sign Antonio’s signature on a blank sheet, purportedly as authority to sell. This sheet was later used to create a Deed of Absolute Sale dated November 9, 1989, in favor of respondents, who then caused the transfer of the title to their names (TCT No. NT-210220). Petitioners alleged fraud and sought reconveyance.
Respondents denied fraud, claiming Antonio and Lolita had earlier sold the property to Pedro in consideration for his payment of their PNB loan. As Pedro lacked funds to transfer the title, it remained in Antonio’s name. Pedro later borrowed PHP 120,000.00 from respondents and, unable to pay, offered the property as payment. Since Antonio was deceased, Pedro forged Antonio’s signature on the 1989 Deed of Sale, while Lolita voluntarily affixed her signature. Respondents argued prescription, noting the complaint was filed on November 7, 2002, about 12 years after the deed’s registration on November 16, 1989.
During trial, petitioner Leotiquio (sole witness) admitted Pedro affixed Antonio’s signature on the deed and that Lolita voluntarily signed it. He testified he only discovered the transfer after verifying with the Register of Deeds.
The RTC dismissed the complaint, finding petitioners failed to prove fraud, noting the judicial admissions regarding the signatures, and ruling the action had prescribed. The CA affirmed, holding that while Antonio’s signature was forged, the deed remained valid with respect to Lolita, who, as a co-owner of a 10/18th share of the conjugal property (half as her conjugal share and a 1/18th share from Antonio’s estate), could validly sell her share. The CA also ruled the action for reconveyance based on an implied trust had prescribed in 10 years from the registration of the deed, which constituted repudiation of the co-ownership.

ISSUE

Whether the Court of Appeals correctly upheld the dismissal of the action for reconveyance.

RULING

Yes, the Court of Appeals correctly upheld the dismissal. The petition was denied.
The Supreme Court, reiterating that it is not a trier of facts, found no compelling reason to disturb the factual findings of the lower courts. The RTC and CA correctly held that petitioners failed to substantiate their claim of fraud in the execution of the 1989 Deed of Sale. Petitioners’ own witness, Leotiquio, admitted that Pedro forged Antonio’s signature and that Lolita voluntarily signed the deed. Lolita’s undisputed signature manifested her consent to the sale of her pro-indiviso share in the property. Upon Antonio’s death, the conjugal partnership was dissolved. Lolita owned half of the property as her conjugal share, and the other half (Antonio’s estate) was divided equally among Lolita and their eight children, giving Lolita a 10/18th share and each child a 1/18th share. As a co-owner, Lolita had the right to freely sell and dispose of her 10/18th share to the respondents.
Furthermore, the action for reconveyance had prescribed. Registration of the deed and issuance of a new title in the respondents’ names on November 16, 1989, constituted an open and clear repudiation of the co-ownership, making respondents trustees of an implied trust over the shares of the other co-owners (petitioners). An action for reconveyance based on an implied trust prescribes in ten years from the date of the repudiation. Petitioners filed their complaint only on November 7, 2002, nearly 13 years later, thus their action was time-barred. The Court clarified that the imprescriptibility of an action to declare a void contract inexistent does not apply, as the deed was not void in its entirety but was valid with respect to Lolita’s share.