G.R. No. 121658 March 27, 1998
NESTOR LACSAMANA, EL DORADO PLANTATION, INC., LBJ DEVELOPMENT CORPORATION and CONRAD C. LEVISTE, petitioners, vs. COURT OF APPEALS, ESTER GAITOS ROBLES, LEON GAITOS ROBLES and DULCE CLARA ROBLES, respondents

FACTS

Leon Robles and his niece Amparo Robles were registered co-owners in equal shares of Lot No. 13535 in Lipa City, covered by OCT No. 0-363-R. Amparo sold her half-share to petitioner El Dorado Plantation, Inc. (EL DORADO). On September 24, 1969, Leon Robles died in the USA, survived by his wife Ester and children Leon Jr. and Dulce Clara. Despite his death, a Deed of Absolute Sale dated July 22, 1971, purportedly executed by Leon Robles with his wife Ester’s marital consent, sold his half-share to Nestor Lacsamana. This deed was registered only on January 22, 1980, leading to the cancellation of the title in the names of EL DORADO and Leon Robles and the issuance of a new one in the names of EL DORADO and Lacsamana. On July 22, 1980, Lacsamana purportedly sold his share to petitioner LBJ Development Corporation, represented by its President Conrad C. Leviste. Subsequently, on January 26, 1982, LBJ acquired EL DORADO’s share, becoming the sole owner of the entire lot. On November 11, 1983, the heirs of Leon Robles filed a complaint for reconveyance and cancellation of titles, alleging that Leon’s signature on the 1971 deed was a forgery as he was already dead, that Nestor Lacsamana was a fictitious person, and that LBJ and EL DORADO (both controlled by the Leviste family) were not buyers in good faith. The trial court ruled in favor of the Robles heirs, ordering the cancellation of the subsequent titles and reinstatement of the original, or payment of the fair market value, plus attorney’s fees. The Court of Appeals affirmed the decision.

ISSUE

1. Whether the action for reconveyance had prescribed or was barred by laches.
2. Whether petitioner LBJ Development Corporation was a purchaser in good faith.

RULING

1. The action has not prescribed and is not barred by laches. The action for reconveyance, based on a void and fictitious deed of sale, is imprescriptible. The right to declare a void contract null does not prescribe. Laches does not apply because the private respondents acted promptly upon discovery. They filed the case on November 11, 1983, less than two months after the NBI reported on September 13, 1983, that Lacsamana was fictitious, and about three years and nine months after the fraudulent registration on January 22, 1980.
2. LBJ was not a purchaser in good faith. The factual findings of the lower courts, supported by evidence, are conclusive. Several circumstances militated against good faith: (a) Conrad Leviste’s claim that LBJ learned of the property through its driver’s “nephew” Nestor Lacsamana should have aroused curiosity, yet no inquiry was made into how Nestor acquired the property; (b) The only co-owner’s duplicate certificate of title for the title in the names of Lacsamana and EL DORADO was in the possession of EL DORADO, LBJ’s sister company; (c) The 1971 Deed of Absolute Sale was registered only after more than eight years. Given these facts, LBJ had actual knowledge of circumstances that should have impelled a reasonably cautious man to investigate further. The Torrens system does not protect one who acts in bad faith or with knowledge of facts that suggest an infirmity in the title.