Case Digest: Buenaventura vs Court of Appeals, G.R. No. 50837

Buenaventura vs Court of Appeals, GR No. 50837, December 28, 1992

Subject: Obligations and Contracts

FACTS

Julian Caiña, was the occupant and tenant of a parcel of land, owned by the Republic of the Philippines but administered at first by the then Rural Progress Administration and later by the Peoples Homesite and Housing Corporation (PHHC). The Republic of the Philippines acquired the aforesaid lot, together with other lots in the Gonzales Estate by Expropriation to be resold to qualified and bonafide tenants-occupants.

Julian Caiña had a brother, Justo Caiña. Justo has children, namely: Emeteria Caiña Buenaventura, Lorenzo Caiña and Francisca Caiña. Emeteria Caiña Buenaventura died as early as July 11, 1937, and was survived by Maria Buenaventura and Narciso Buenaventura, the private respondent in this case.

Before the subdivision of the property and the subdivision plan thereof could be approved and said lot transferred to Julian Caiña, the latter died in 1961. He was survived by his brother, Justo Caiña (who died in 1962) and his children.

In 1965, the PHHC executed a 'Deed of Absolutes Sale' over the said lot to Lorenzo Caiña and Francisca Caiña-Rivera. By virtue of the said sale, Lorenzo Caiña and Francisca Caiña-Rivera were issued TCT over the said lot. Then later on, executed a 'Deed of Absolutes Sale' over the said lot in favor of Francisco M. Custodio. In January 1966, Francisco Custodio executed a ‘Deed of Absolute Sale’ over the said lot in favor of the Petitioner.

In December 1976, Private Respondents [now petitioners] filed a complaint with the respondent court, National Housing Authority (formerly PHHC). Francisco M. Custodio. Manotok Realty, Inc.’ for Annulment of Titles, Contracts and/or Sales. Reconveyance and Damages (a copy of the aforesaid complaint attached hereto as Annex “G” hereof).

ISSUE

Whether or not the action for reconveyance is based both on the grounds of fraud and simulation of contracts, hence, it cannot be made subject to the rule on prescription of action.

RULING

No.

Under the law (Art. 1410, NCC), the action or defense for the declaration of the inexistence of a contract does not prescribe.

In the case of fraud in the transfer of the property alleged in petitioner’s complaint, Art 1410 of the Civil Code on imprescriptibly of actions cannot be deemed applicable. Verily, the principle on prescription of actions is designed to cover situations such as the case at bar, where there have been a series of transfers to innocent purchasers for value. To set aside these transactions only to accommodate a party who has slept on his rights is anathema to good order. Independently of the principal of prescription of actions working against petitioners, the doctrine of laches may further be counted against them, which latter tenet finds application even to imprescriptible actions. Thus, while it is true that, technically, the action to annul a void or inexistent contract does not prescribe; it may, nonetheless, be barred by laches.