G.R. No. 226065. July 29, 2019.
HEIRS OF SOLEDAD ALIDO, Petitioners, vs. FLORA CAMPANO, or her representatives and THE REGISTER OF DEEDS, PROVINCE OF ILOILO, Respondents.

FACTS

Soledad Alido registered a parcel of land under her name via Original Certificate of Title (OCT) No. F-16558 on March 17, 1975. In 1978, respondent Flora Campano took possession of the land and the owner’s duplicate certificate of title, alleging an oral sale from Alido, and paid the realty taxes. Alido died in 1996. In 2009, her heirs (petitioners) executed a Deed of Adjudication and sought to register the property in their names. They filed a petition to compel Campano to surrender the owner’s duplicate title.
The Regional Trial Court (RTC) granted the petition, ruling Alido remained the registered owner, an oral sale was invalid, and her title was imprescriptible. The Court of Appeals (CA) reversed, holding the oral sale was executed and thus enforceable, but was void for violating the five-year prohibition on alienation of a free patent land. However, the CA dismissed the heirs’ petition, ruling their action was barred by laches due to their inaction for over three decades.

ISSUE

The core issues were: (1) the validity of the oral sale of the land; and (2) whether the heirs’ action to recover the title was barred by laches.

RULING

The Supreme Court reversed the CA and remanded the case. On the first issue, the Court held the oral sale was void, not merely unenforceable. The land was acquired by Alido through a free patent in 1975. The sale in 1978 violated the explicit five-year prohibition against alienation under Commonwealth Act No. 141, rendering the contract void from the beginning. A void contract produces no legal effect.
On the second issue, the Court ruled laches could not bar an action to recover property covered by a Torrens title, as such title is imprescriptible. The defense of laches is unavailing against the registered owner. Since the sale was void, Campano acquired no right to the land, and the heirs, as successors-in-interest, retained their right to recover it based on Alido’s indefeasible title.
However, applying the principle of equity, the Court held Campano may be entitled to reimbursement of the purchase price she paid to Alido under the void contract. The case was remanded to the RTC to determine the amount of the purchase price and whether the fruits she derived from the land equitably compensated her. The decision was without prejudice to any action the government might take against the heirs for the violation of the free patent terms.