G.R. No. 221513 . December 05, 2016
SPOUSES LUISITO PONTIGON AND LEODEGARIA SANCHEZ-PONTIGON, PETITIONERS, vs. HEIRS OF MELITON SANCHEZ, RESPONDENTS.

FACTS

The case involves a dispute over a parcel of land. Respondents, the Heirs of Meliton Sanchez, filed a complaint seeking the nullification of an Extrajudicial Settlement with Sale and a Transfer Certificate of Title (TCT) issued in favor of petitioners, the Spouses Pontigon. The Regional Trial Court (RTC) and the Court of Appeals (CA) found the issuance of the TCT and the underlying settlement to be riddled with irregularities. These included the issuance of the TCT based solely on an owner’s duplicate copy of an Original Certificate of Title (OCT) that lacked a cancellation annotation, despite the original OCT being lost from the Register of Deeds’ custody. Furthermore, the Petition for Approval of the Extrajudicial Settlement was dated earlier than the settlement document itself, and key supporting documents were mere unsigned or photocopied records.
The majority of the Supreme Court granted the petition, ruling that the respondents’ action for reconveyance had prescribed. It held that since the complaint did not allege possession of the property by the respondents, the action was one for reconveyance based on an implied trust, which prescribes in ten years from the issuance of the TCT in 1980. The complaint filed in 2000 was therefore time-barred. Justice Peralta dissented from this conclusion.

ISSUE

Whether the respondents’ action for the nullification of the Extrajudicial Settlement with Sale and the consequent TCT has prescribed.

RULING

In his dissenting opinion, Justice Peralta argued that the action had not prescribed. He emphasized that the factual findings of the RTC and CA, which detailed grave irregularities in the issuance of the TCT, are generally binding and conclusive. Based on these findings, he concluded that the Extrajudicial Settlement with Sale was void ab initio and could not have validly conveyed title. Critically, he distinguished the nature of the action. An action for reconveyance based on an implied trust prescribes in ten years. However, an action for reconveyance predicated on a void or inexistent contract, such as one tainted by forgery or procedural invalidity, does not prescribe. The defense of the inexistence of a contract is imprescriptible.
Justice Peralta found the respondents’ case to fall under the latter category. The irregularities—including the use of an uncanceled duplicate OCT, the lack of a prior judicial reconstitution of the lost original title, and the reliance on defective and unauthenticated documents—rendered the entire process null and void. Therefore, the prescriptive period for an implied trust was inapplicable. The action was essentially one to declare the nullity of a void transaction and title, which is imprescriptible. Consequently, he voted to deny the petition and affirm the CA’s decision nullifying the TCT and the Extrajudicial Settlement with Sale.