G.R. No. 107069 July 21, 1994
HEIRS OF LEANDRO OLIVER, REPRESENTED BY PURITA OLIVER and REMOQUILLO, petitioners, vs. THE HONORABLE COURT OF APPEALS, JOSE SERADILLA, and NATIONAL HOUSING AUTHORITY, respondents.

FACTS

The case involves a dispute over Lots 26 and 30, Block 21 of the Tunasan Homesite. The government originally sold several lots, including Lot 22, Block 87, to Patricio Seradilla in 1955. In 1959, Patricio’s heirs, excluding Jose Seradilla, entered an agreement with their uncle, Leandro Oliver. They consolidated Oliver’s occupied Lot 24 with the Seradilla estate (including Lot 22) for equal partition. Oliver vacated Lot 24 and occupied a portion of old Lot 22, later designated as new Lot 26, Block 87. In 1961, Oliver sold half of this portion to Pedro Remoquillo. However, in 1963, the Seradilla heirs, including Jose, executed a new partition revoking the 1959 agreement, excluding Oliver, and allocating the lots among themselves. Years later, based on representations that these lots were included in the partition, the National Housing Authority sold Lots 26 and 30 (which originated from old Lot 22) to Jose Seradilla, who obtained titles in 1980.
In 1982, the heirs of Leandro Oliver and Pedro Remoquillo filed a complaint to annul the titles issued to Jose Seradilla. They asserted rights as Oliver’s heirs and vendee, claiming the 1959 agreement was valid and that Seradilla secured the titles through fraud. The Regional Trial Court ruled against the petitioners, a decision affirmed by the Court of Appeals.

ISSUE

The core issue is whether the Court of Appeals erred in affirming the dismissal of the complaint for annulment of title, thereby upholding Jose Seradilla’s ownership over the disputed lots.

RULING

The Supreme Court denied the petition and upheld the Court of Appeals’ decision. The legal logic rests on the nature of the government’s original contract with Patricio Seradilla and the principle of laches. The lots were part of a government homesite sold to Patricio Seradilla under an “Agreement to Sell,” which contained restrictive conditions, including prohibitions against assignment or subdivision without government consent. The 1959 agreement among the heirs and Leandro Oliver, which effectively subdivided and reassigned portions of the patented lots, violated these express conditions. Consequently, this private agreement was void ab initio for being expressly prohibited by law, granting no valid rights to Oliver or his successors.
Furthermore, the Court emphasized the factual findings of the lower courts, which are generally binding in a Rule 45 petition. These findings established that Leandro Oliver never filed a formal application to purchase the lots from the government, unlike Jose Seradilla who regularly paid amortizations. Critically, Oliver took no action to assert his claim from 1963, when the new partition excluding him was executed, until his death in 1976, and his heirs filed suit only in 1982. This prolonged inaction constituted laches, a failure to assert a right for an unreasonable length of time, which now bars their claim. Since Jose Seradilla derived his title from a valid administrative patent issued by the NHA, his registered ownership must be upheld.