G.R. No. 167320 ; January 30, 2007
HEIRS OF SALVADOR HERMOSILLA vs. SPOUSES JAIME REMOQUILLO AND LUZ REMOQUILLO

FACTS

The dispute involves a 65-square meter portion of Lot 19 in San Pedro, Laguna, originally part of a government homesite. Apolinario Hermosilla occupied the area and, before his death, assigned possession of Lot 19 to his grandson, respondent Jaime Remoquillo, in 1962. Jaime subsequently applied to purchase the lot from the Land Tenure Administration. In 1972, Jaime and his uncle, Salvador Hermosilla (petitioners’ predecessor), executed a “Kasunduan ng Paglipat Ng Karapatan” whereby Jaime transferred his rights over the 65-square meter portion to Salvador. The National Housing Authority later awarded Lot 19 to Jaime in 1986, and title was issued to him and his spouse in 1987.
Petitioners, as heirs of Salvador, filed an action for Annulment of Title in 1992, alleging fraud and seeking reconveyance of the 65-square meter portion based on the 1972 Kasunduan. The Regional Trial Court ruled in their favor, declaring the Kasunduan a perfected contract of sale. The Court of Appeals reversed, declaring the Kasunduan void and dismissing the complaint on grounds of prescription and absence of fraud.

ISSUE

Whether the Kasunduan executed in 1972 is valid and can support an action for reconveyance of the disputed property.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The Kasunduan is void. At the time of its execution in 1972, the Republic of the Philippines, through the National Housing Authority, was still the owner of Lot 19. Jaime had no ownership rights to convey, as he was merely an applicant. The principle of “nemo dat quod non habet” (no one can give what he does not have) applies. A contract of sale requires the seller to be the owner of the property at the time of delivery. Since Jaime had no title or ownership in 1972, the subsequent issuance of title in 1987 did not retroactively validate the void agreement.
The Court clarified that while the action for reconveyance based on an implied trust, which prescribes in ten years, was not time-barred (as petitioners remained in possession), the action must still fail on substantive grounds. The Kasunduan could not create an implied trust because the essential element of a lawful conveyance was absent from the beginning. Jaime’s eventual acquisition of title inured solely to his benefit and did not create an obligation to convey the property to Salvador’s heirs. The Kasunduan, being a nullity from its inception, produced no legal effects and could not serve as a basis for claiming ownership or for an action for reconveyance.