G.R. No. 107432 July 4, 1994
ERLINDA B. CAUSAPIN and ALBERTO CAUSAPIN, petitioners, vs. COURT OF APPEALS, EUSEBIO CALUGAY, RENATO MANALO, LORENZA MANALO and BENJAMIN C. NADURATA, JR., and SPOUSES DOMINADOR S. DE GUZMAN and ANASTACIA BATAS, respondents.

FACTS

Petitioners Erlinda and Alberto Causapin are heirs of Agapito Causapin who died in 1954, leaving a 473-square meter lot in Laguna. They partitioned the land in 1963. Erlinda resided on the land until 1963, then moved to Manila, leaving the land in the care of her cousin, respondent Lorenza Manalo. In 1986, Erlinda discovered a building being constructed on the land and learned it was titled under Original Certificate of Title No. P-1796 in the name of respondent-spouses Dominador de Guzman and Anastacia Batas. On July 17, 1986, petitioners filed a complaint for rescission of deeds of sale and cancellation of OCT No. P-1796. Erlinda claimed she never sold her share and that her signature on a deed conveying her share to respondent Eusebio Calugay was forged. Alberto claimed he was intimidated into signing a deed of sale to the de Guzmans and never received payment. Respondents asserted a chain of transactions: Eusebio Calugay bought from Erlinda in 1963; Renato Manalo bought from Calugay in 1966; and the de Guzmans bought from Manalo in 1967. The de Guzmans also bought Alberto’s share in 1967, applied for a free patent, and were issued OCT No. P-1796 on April 28, 1977. The trial court found no valid transfer of Erlinda’s share, declaring the deed to Calugay spurious and noting Erlinda was a minor in 1963, but upheld the sale of Alberto’s share. It granted relief to Erlinda based on equity, finding the de Guzmans acted in bad faith. The Court of Appeals reversed, finding the duly notarized deeds of sale valid, noting the action was barred by prescription and laches, and that an original certificate of title based on a homestead patent becomes incontrovertible after one year. It also found no conclusive evidence of bad faith by the de Guzmans.

ISSUE

The primary issue is whether the Court of Appeals erred in reversing the trial court’s decision, specifically concerning the validity of the deeds of sale, the application of prescription and laches, the indefeasibility of the title issued to the de Guzmans, and the finding of good faith.

RULING

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. It held that the disputed deeds of sale were duly notarized and, in the absence of clear and convincing evidence of falsity, must be upheld. The Court found that petitioners’ action was barred by prescription and laches, as it was filed over twenty years after the alleged sale by Erlinda and nineteen years after the sale by Alberto. It also ruled that an original certificate of title issued on the strength of a homestead patent becomes indefeasible and incontrovertible after one year from its issuance, and an action for its annulment must be filed by the Solicitor General, which was not done here. The Court further held that equity cannot be applied against statutory law, and there was no evidence that the de Guzman spouses acted in bad faith.