G.R. No. 161237 ; January 14, 2009
PERFECTO MACABABBAD, Jr., deceased, substituted by his heirs Sophia Macababbad, Glenn M. Macababbad, Perfecto Vener M. Macababbad III and Mary Grace Macababbad, and SPS. CHUA SENG LIN AND SAY UN AY, petitioners vs. FERNANDO G. MASIRAG, FAUSTINA G. MASIRAG, CORAZON G. MASIRAG, LEONOR G. MASIRAG, and LEONCIO M. GOYAGOY, respondents; FRANCISCA MASIRAG BACCAY, PURA MASIRAG FERRER-MELAD, AND SANTIAGO MASIRAG, Intervenors-Respondents.

FACTS

The respondents, heirs of the original registered owners (spouses Pedro Masirag and Pantaleona Tulauan) of Lot No. 4144, filed a complaint against petitioners Perfecto Macababbad, Jr. and spouses Chua Seng Lin and Say Un Ay. They alleged that a document titled “Extra-judicial Settlement with Simultaneous Sale of Portion of Registered Land (Lot 4144)” dated December 3, 1967, was falsified, making it appear that the respondents participated and sold their shares to Macababbad for P1,800.00 when they did not. Through this document, Macababbad acquired the property, portions of which were later registered in his name and sold to third parties, including Chua who obtained a Transfer Certificate of Title for a subdivided portion. The respondents sought the declaration of nullity of the document, reconveyance, damages, and attorney’s fees. The Regional Trial Court (RTC) dismissed the complaint on grounds of prescription (the action was filed 32 years after the purported sale) and failure to implead indispensable parties (other heirs and innocent purchasers). The Court of Appeals (CA) reversed the RTC, ruling that the complaint sufficiently alleged a cause of action based on fraud and that the action, being one to declare a void contract, is imprescriptible. Petitioners sought review, arguing that the CA had no jurisdiction as the appeal involved pure questions of law, and alternatively, that the RTC’s dismissal was correct.

ISSUE

1. Whether the Court of Appeals had jurisdiction over the appeal.
2. Whether the complaint stated a cause of action.
3. Whether the cause of action had prescribed or was barred by laches.
4. Whether the complaint was dismissible for failure to implead indispensable parties.

RULING

1. On Jurisdiction: The Supreme Court held that the Court of Appeals correctly exercised jurisdiction. The appeal involved mixed questions of fact and law, as it required a determination of whether the allegations of fraud in the complaint were sufficient to constitute a cause of action and whether prescription or laches had set in based on the pleaded facts. These issues necessitated an examination of the factual allegations, placing them within the CA’s appellate jurisdiction.
2. On Sufficiency of Cause of Action: The Supreme Court affirmed the CA’s finding that the complaint stated a cause of action. Stripped of verbiage, the ultimate factual allegation was that the petitioners, through fraud and falsification, deprived the respondents of their hereditary shares in the property. This positive allegation of fraud violating legal rights was sufficient to support a judicial adjudication.
3. On Prescription and Laches: The Supreme Court ruled that the action had not prescribed and laches did not apply. The respondents’ action was essentially to declare the extrajudicial settlement and sale void ab initio due to forgery. An action to declare a void contract does not prescribe. Furthermore, laches requires a neglect or omission to assert a right over an unreasonable period, but the respondents filed the action immediately upon discovering the fraud in 1999. The delay from 1967 was justified because the fraud was concealed, and the respondents only learned of it in 1999.
4. On Indispensable Parties: The Supreme Court held that the RTC erred in dismissing the complaint for non-joinder of indispensable parties. Failure to implead indispensable parties is not a ground for dismissal but for the joinder of the necessary parties. The court should order the inclusion of such parties. The other heirs and alleged innocent purchasers were not indispensable to the resolution of the validity of the document as it pertained to the respondents’ shares. Their rights could be determined in the same proceeding if joined.
The Supreme Court DENIED the petition, AFFIRMED the Court of Appeals’ decision, and REMANDED the case to the Regional Trial Court for further proceedings.