G.R. No. 182537 . June 01, 2016
MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY, PETITIONER, VS. RICHARD E. UNCHUAN, RESPONDENT.

FACTS

Respondent Richard Unchuan filed a complaint against petitioner Mactan-Cebu International Airport Authority (MCIAA) for declaration of nullity of a deed of absolute sale, quieting of title, and/or payment of just compensation. Unchuan claimed ownership over two lots (Lot Nos. 4810-A and 4810-B) in Lapu-Lapu City, which he purchased in 1998 from the surviving heirs of the registered owners named in Original Certificate of Title No. R0-1173. He alleged that a prior 1958 Deed of Absolute Sale, wherein Atanacio Godinez purportedly sold the same lots to the Civil Aeronautics Administration (CAA, MCIAA’s predecessor), was void. Unchuan contended Atanacio lacked a special power of attorney from his co-heirs to sell their undivided shares, no consideration was paid to the heirs, and the deed lacked necessary government signatures.
MCIAA, in defense, asserted the 1958 sale was valid and that CAA had taken possession upon payment. It presented a 1969 deed of partition signed by several heirs, including Atanacio, which acknowledged the prior sale to the government. MCIAA argued it acquired ownership through the 1958 sale and had since possessed and declared the property for taxation. The Regional Trial Court ruled in favor of Unchuan, declaring the 1958 sale void and recognizing his ownership. The Court of Appeals affirmed this decision.

ISSUE

The core issue is whether the 1958 Deed of Absolute Sale executed by Atanacio Godinez in favor of the CAA is valid, thereby vesting ownership in the government and subsequently in MCIAA.

RULING

The Supreme Court reversed the lower courts’ decisions and upheld the validity of the 1958 sale. The legal logic centers on the principle of prescription and the nature of a voidable contract, not a void one. The Court found that Atanacio Godinez acted as an agent for his co-heirs in the 1958 sale. While the authority of an agent to sell real property must be conferred in writing, the absence of such written authority does not automatically render the contract void, but merely voidable. A voidable contract remains valid until annulled in a proper action.
Crucially, an action for annulment based on lack of authority prescribes in four years from the execution of the contract. The 1958 sale was executed on April 3, 1958. Unchuan’s action, filed in 2004, was brought 46 years later, far beyond the prescriptive period. Consequently, the right to challenge the sale’s validity had long prescribed. Furthermore, the Court noted the 1969 deed of partition, signed by other heirs, constituted a ratification of the 1958 sale, curing any initial defect in Atanacio’s authority. Therefore, title to the subject lots was validly transferred to the Republic of the Philippines through CAA in 1958, and subsequently to MCIAA by operation of law. Unchuan’s claim, derived from a 1998 sale, could not prevail over this established government title.