G.R. No. 194366 ; October 10, 2012
NAPOLEON D. NERI, et al., Petitioners, vs. HEIRS OF HADJI YUSOP UY AND JULPHA IBRAHIM UY, Respondents.

FACTS

Anunciacion Neri died intestate in 1977, leaving several homestead properties acquired during her marriage to Enrique Neri. She was survived by her husband Enrique and seven children: Eutropia and Victoria from her first marriage, and Napoleon, Alicia, Visminda, Rosa, and Douglas from her second marriage with Enrique. In 1979, Enrique, acting for himself and as natural guardian of his minor children Rosa and Douglas, together with his adult children Napoleon, Alicia, and Visminda, executed an Extra-Judicial Settlement of the Estate with Absolute Deed of Sale, adjudicating the properties among themselves and immediately selling them to spouses Hadji Yusop Uy and Julpha Ibrahim Uy. Eutropia and Victoria were completely excluded from the settlement and sale.
In 1996, the children of Enrique filed a complaint to annul the sale, later amended to include Eutropia and Victoria as plaintiffs, arguing the sale was void for violating the prohibitory period on homesteads and for depriving the excluded heirs of their legitimes. The respondents, heirs of the Uy spouses, defended the sale as beyond the prohibitory period and raised prescription and laches.

ISSUE

The core issues were: (1) whether the extrajudicial settlement and sale were valid despite the exclusion of heirs Eutropia and Victoria; (2) whether the sale was valid as to the shares of the then-minor heirs Rosa and Douglas; and (3) whether the action was barred by laches or prescription.

RULING

The Supreme Court granted the petition, partially annulling the sale. The Court held that upon Anunciacion’s death, her estate was inherited in pro indiviso shares by all her compulsory heirs: her spouse Enrique and all seven children. Consequently, Enrique owned a 9/16 share (representing his conjugal half and his hereditary portion), while each child owned a 1/16 share. The extrajudicial settlement and sale were void with respect to the shares of the excluded heirs Eutropia and Victoria, as a co-owner cannot validly alienate the shares of other co-owners without their consent. The sale was also void as to the shares of the minors Rosa and Douglas. Enrique, as a mere natural guardian, lacked judicial authority to sell the property of his minor children; such alienation required court approval, which was not obtained. The Court rejected the application of laches, emphasizing that an action for reconveyance based on a void contract does not prescribe. However, the sale remained valid as to the shares of the consenting adult heirs (Enrique, Napoleon, Alicia, and Visminda). The Court ordered the respondents to reconvey the 3/16 aggregate shares belonging to Eutropia, Victoria, and Douglas, and for the consenting heirs to return the proportional purchase price for those shares to the buyers.