Cunanan v. Antepasado
REITERATIONFacts
The Antecedents: Blas Cunanan purchased a portion of a registered lot from Luciano Antepasado. The deed of sale described the portion as approximately 197 square meters. After Luciano's death, his widow and children executed a "Ratification" document, admitting a mutual error in the area stated in the original deed, and asserting that the actual area sold was 322 square meters, which they intended to convey as a lump sum sale. Transfer Certificate of Title (TCT) No. 1481 was issued to Cunanan based on these documents. Procedural History: In 1951, Cunanan built a house, a portion of which encroached on land not explicitly covered by the original deed of sale but included in the TCT. The widow and heirs of Luciano Antepasado demanded rentals for this encroaching portion. Upon Cunanan's refusal, they filed an action in the Court of First Instance (CFI) of Davao seeking annulment of the "Ratification" document on grounds of fraud and misrepresentation, and collection of rentals. The CFI ruled in favor of Cunanan, finding no fraud or misrepresentation. The plaintiffs appealed to the Court of Appeals (CA). The Appeal: The Court of Appeals awarded the disputed 125 square meters to the respondents (widow and heirs). While acknowledging that Cunanan's house was built in good faith, the CA applied Articles 448, 546, and 548 of the Civil Code. The CA found no sufficient evidence of mutual error to validate the "Ratification" as a reformation of the original sale and held it invalid for lack of consideration, as no new consideration passed to the widow and heirs upon its execution. Cunanan then petitioned for review before the Supreme Court, primarily raising the issue of prescription.
Issue(s)
Whether the action to annul the "Ratification" document (Exhibit B) was barred by prescription. Whether the "Ratification" document (Exhibit B) was valid for lack of consideration. Whether ownership of land registered under the Torrens system can be acquired by prescription.
Ruling
The Supreme Court reversed the decision of the Court of Appeals. It held that the action to annul the "Ratification" document (Exhibit B) was barred by prescription, as it was filed more than eleven years after its execution and the commencement of possession. Consequently, the Court entered judgment dismissing the plaintiffs' complaint.
Ratio Decidendi
On the issue of prescription of the action to annul Exhibit B: The Court held that the action to annul Exhibit B, which was filed more than eleven years after its execution in 1940 and the commencement of Cunanan's possession, was clearly barred by prescription. The respondents' claim that Exhibit B was void for lack of consideration was raised for the first time on appeal, and even if considered, the action to annul it had prescribed. The Court emphasized that for the respondents to prevail, they must first annul Exhibit B, but their right to do so had lapsed due to the passage of time. The principle that ownership of registered lands cannot be acquired by prescription was acknowledged but deemed inapplicable to Cunanan's defense, as he was asserting his right based on a Torrens title and the "Ratification" document, not on adverse possession alone. His argument was that the respondents moved too late to invalidate the document upon which his title was partly based. On the validity of Exhibit B for lack of consideration: The Court noted that the respondents' contention in the lower court was based on deceit and misrepresentation, not lack of consideration. However, even if the issue of lack of consideration were to be considered, the Court found that the action to annul Exhibit B on this ground had prescribed. The Court also observed that if Exhibit A erroneously described the lot and Exhibit B was executed to correct this error, then Exhibit B could be considered a reformation of Exhibit A, with the original price paid to the deceased vendor serving as the consideration. Nevertheless, the resolution of this specific point was rendered unnecessary by the prescription of the action to annul. On the issue of acquiring ownership by prescription over registered land: The Court acknowledged the principle that ownership of lands registered under the Torrens system cannot be acquired by prescription or ten-year adverse possession. However, this principle was not the basis of Cunanan's claim. Cunanan's defense rested on his existing Torrens title and the "Ratification" document (Exhibit B), which the respondents sought to annul. The Court found that the respondents' action to annul Exhibit B was filed too late, thus preserving Cunanan's title and possession as evidenced by the certificate of title.
Main Doctrine
The Supreme Court reiterated that lands registered under the Torrens system are not subject to acquisitive prescription. Furthermore, any action to annul a contract, such as the "Ratification" document in this case, is subject to the prescriptive period for filing such actions. Failure to file the action within the prescribed period bars the claim, even if the contract were otherwise voidable.