G.R. No. 146550 March 17, 2006
FELIPA DELFIN, GINA MAALAT, SHIRLEY TAMAYO, RECIO DAÑOS, and ROBERTO DELFIN, Petitioners, vs. PRESENTACION D. BILLONES, ROSARIO D. DEMONARCA, WENEFREDO DEGALA, RAMON DELA CRUZ, TERESITA DALIVA DEVIENTE, JOLLY DATAR and the COURT OF APPEALS, Respondents.

FACTS

Respondents, heirs of the original owners, filed an action for annulment, reconveyance, and recovery of ownership over two parcels of land. They alleged that a 1960 Deed of Absolute Sale for Lot No. 213 was fictitious, as three signatories had predeceased the sale. For Lot No. 3414, they claimed a 1965 Extra-Judicial Partition and Deed of Sale was a mortgage contract fraudulently procured from an ailing, illiterate vendor for a grossly inadequate price of P300. Petitioners, successors-in-interest of the buyer-spouses Delfin, defended the transactions as regular, supported by notarized deeds, and argued the action was barred by prescription and laches, asserting they were innocent purchasers for value.
The Regional Trial Court dismissed the complaint, upholding the presumption of regularity of the notarized deeds and finding the action prescribed and barred by laches. The Court of Appeals reversed, annulling the 1965 deed for Lot No. 3414 due to fraud, vitiated consent, and inadequacy of price. It also ruled the action had not prescribed, noting the plaintiffs were in possession and had filed a prior similar case. The appellate court, however, upheld the validity of the 1960 sale for Lot No. 213, finding insufficient proof of forgery.

ISSUE

Whether the Court of Appeals erred in annulling the 1965 Extra-Judicial Partition and Deed of Sale and in ruling that the action for reconveyance had not prescribed.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the RTC decision, dismissing the complaint. On prescription, the Court held that an action for reconveyance based on an implied or constructive trust prescribes in ten years from the date of registration of the deed or issuance of the title. Registration of the 1965 deed occurred in 1980, and the complaint was filed in 1994, well beyond the prescriptive period. The claim of continuous possession by respondents did not toll prescription, as their possession was merely tolerated by the registered owners, not in the concept of an owner. The prior dismissed case did not interrupt the running of prescription.
On the merits regarding Lot No. 3414, the Court found no clear and convincing evidence of fraud or vitiated consent. The deed was a notarized document enjoying the presumption of regularity. Mere allegations of the vendor’s old age, sickness, and illiteracy, unsupported by compelling proof, do not invalidate a contract. Inadequacy of price, unless shocking to the conscience, is not a sufficient ground to annul a contract, especially when the parties had an opportunity to question it for decades. The respondents failed to overcome the evidentiary weight of the notarized instrument and the defense of prescription.