G.R. No. 134718 ; August 20, 2001
HEIRS OF ROMANA INGJUG-TIRO; BEDESA, PEDRO, RITA all surnamed TIRO, and BARBARA TIRO (deceased) represented by NORMA SARAMOSING, HEIRS OF FRANCISCO INGJUG: LEONARDO, LILIA, FERNANDA, ZENAIDA, PACITA and ANTONIO, all surnamed INGJUG; and HEIRS OF FRANCISCA INGJUG-FUENTES: ULDARICO and GUILLERMA, all surnamed FUENTES, and PAULINA INGJUG-FUENTES (deceased) represented by VICTOR, ELENA, SERGIA and DESIDERIO, all surnamed MUÑEZ, petitioners,

vs.
SPOUSES LEON V. CASALS and LILIA C. CASALS, SPOUSES CARLOS L. CLIMACO and LYDIA R. CLIMACO, SPOUSES JOSE L. CLIMACO, JR. and BLANQUITA C. CLIMACO, and CONSUELO L. CLIMACO, respondents.

FACTS

The case involves a 5,354-square meter parcel of land in Marigondon, Lapu-Lapu City, originally titled under Original Certificate of Title No. RO-0376 in the name of Mamerto Ingjug. Upon his death, the property devolved to his five children: Romana, Francisco, Francisca, Luisa, and Maria, all surnamed Ingjug. On July 9, 1965, Luisa, Maria, one Eufemio Ingjug, and Guillerma Ingjug-Fuentes-Pagubo (daughter of Francisca) sold the land to the respondents. The vendors represented themselves as the only surviving heirs of Mamerto Ingjug. The sale was evidenced by a Deed of Sale of Unregistered Land and an Extrajudicial Settlement and Confirmation of Sale. The original certificate of title, lost during the war, was reconstituted, and on its basis, Transfer Certificate of Title No. T-1150 was issued in the names of the respondents.
On August 10, 1992, the petitioners, who are the heirs of Romana, Francisco, and Francisca Ingjug, filed a complaint for Partition, Recovery of Ownership and Possession, and Declaration of Nullity of the Deed of Sale and Extrajudicial Settlement. They alleged they only discovered the sale in 1990, and that respondents refused to deliver their shares. They sought to nullify the deeds to the extent of their shares, alleging that Eufemio Ingjug (real name Eufemio Tiro) was not a direct heir but a son-in-law, and that Francisco Ingjug, who was named as a party to the 1967 Extrajudicial Settlement, had died in 1963.
The trial court dismissed the complaint on grounds of prescription and laches, noting that from 1965 (the sale) or 1967 (the title transfer) to 1992 (the filing of the complaint) was 25-27 years, and that an action for reconveyance based on implied trust prescribes in ten years. The Court of Appeals affirmed the dismissal.

ISSUE

Whether petitioners’ right to institute a complaint for partition and reconveyance is effectively barred by prescription and laches.

RULING

No. The Supreme Court GRANTED the petition, REVERSED and SET ASIDE the Decision of the Court of Appeals, and REMANDED the case to the trial court for trial on the merits.
The Court held that the trial and appellate courts erred in dismissing the complaint solely on prescription and laches without considering the petitioners’ core allegations attacking the very validity of the transactions. The complaint was premised on the nullity ab initio of the Deed of Sale and the Extrajudicial Settlement, alleging that: (1) the petitioners’ shares were sold without their knowledge and consent; (2) one vendor, Eufemio Tiro, was not a direct compulsory heir; and (3) the Extrajudicial Settlement was simulated as it included the signature of Francisco Ingjug who had died years earlier. An action for the declaration of the inexistence of a contract does not prescribe. Furthermore, the Court noted several factual matters requiring evidence, such as whether the property remained in the name of Mamerto Ingjug for tax purposes, whether respondents took possession or made improvements, and whether they were innocent purchasers for value. Therefore, a full-blown trial is necessary to substantiate the respective claims and defenses of the parties on all issues presented.