G.R. No. 156879 ; January 20, 2004
FLORDELIZA CALPATURA FLORA, DOMINADOR CALPATURA and TOMAS CALPATURA, JR., Heirs of TOMAS CALPATURA, SR., Petitioners, vs. ROBERTO, ERLINDA, DANIEL, GLORIA, PATRICIO, JR. and EDNA, all surnamed PRADO and NARCISA PRADO, Respondents.

FACTS

The property in dispute is the northern half of a residential lot in Quezon City, covered by TCT No. 71344 in the names of respondent Narcisa Prado and her children by her first husband, Patricio Prado, Sr. After Patricio’s death in 1959, Narcisa married Bonifacio Calpatura. In 1968, needing funds to support her minor children, Narcisa and her brother-in-law, Tomas Calpatura, Sr., executed an Agreement of Purchase and Sale over the northern half for P10,500. A Deed of Absolute Sale followed in 1973. Petitioners, heirs of Tomas, took possession, built improvements, and paid realty taxes without objection from respondents for years.
In 1991, respondents filed a complaint to annul the sale. They alleged the 1968 agreement was an equitable mortgage, not a sale; that the 1973 deed was fraudulent; that Narcisa, as natural guardian, lacked authority to sell the children’s shares; and that the sale violated a 25-year no-sale condition annotated on the title. The Regional Trial Court dismissed the complaint, upholding the sale’s validity and finding respondents’ claims barred by laches and prescription.

ISSUE

The core issues are: (1) whether the transaction was a sale or an equitable mortgage; (2) whether Narcisa had the authority to sell the entire northern half; and (3) whether respondents’ action is barred by laches.

RULING

The Supreme Court affirmed the Court of Appeals’ modified decision. The transaction was correctly characterized as a sale, not a mortgage. The terms of the written agreements are clear and conclusive under the parole evidence rule. Respondents failed to present clear and convincing evidence of a loan intent or any right of redemption to justify recharacterizing the contract.
However, Narcisa could only validly convey her own share in the property. The title was issued in the names of Narcisa and her six children, establishing a co-ownership. Upon her first husband’s death, Narcisa inherited a 1/7 share as a co-heir with her six children. Her conjugal share was extinguished upon the dissolution of the conjugal partnership. Therefore, she owned only a 1/7 undivided interest. The sale is valid only with respect to this 1/7 share (78.8857 sq. m.). She had no authority to sell the shares of her then-minor children without court approval.
The defense of laches was not sustained. An action for reconveyance based on an implied trust, arising from the sale of property exceeding the seller’s share, prescribes in ten years. The counting began from the 1973 registration of the sale. Respondents filed suit in 1991, within the prescriptive period. Their long inaction, while a factor, did not conclusively establish laches given their minority status for a significant period and the ongoing co-ownership nature of the property.