Aliño v. Lorenzo
REITERATIONFacts
The Antecedents: Lucia Carlos Aliño (Lucia) sold a parcel of land to her daughter, Angelica A. Lorenzo (Angelica), for P10,000.00. A Deed of Absolute Sale was executed, and the title was transferred to Angelica's name. Lucia continued to pay the real estate taxes from 1980 to 1987 and designated a caretaker who built a house and resided on the property. Angelica died in 1985, and her heirs, after an extra-judicial settlement, obtained a new title in the names of three minor heirs. Lucia later authorized someone to look for a buyer for her lots, including the subject lot registered in Angelica's name, and offered to sell the lots to the Central Bank. When Angelica's husband refused to return the lot, Lucia filed a complaint for declaration of nullity of the deed of sale, annulment of the extra-judicial settlement, and reconveyance of title, alleging the sale was simulated. Procedural History: The Regional Trial Court (RTC) dismissed Lucia's complaint, holding that the sale was not simulated based on Lucia's recognition of Angelica's ownership through tax payments, offers to sell, and authority to look for a buyer. The RTC also noted Lucia's failure to take concrete steps to recover the property for 10 years. The Court of Appeals (CA) affirmed the RTC's findings, emphasizing the notarized deed of sale and Lucia's subsequent acts. The CA deleted the award for attorney's fees. Lucia's heirs appealed to the Supreme Court. The Petition: Petitioners contend that the sale was simulated due to the absence of any attempt by Angelica or her husband to assert ownership, Lucia's continuous possession and payment of taxes, the disproportionate purchase price, non-payment of consideration, and the sale being made only in Angelica's name. Respondents argue the sale was genuine, evidenced by Lucia's subsequent acts and her failure to recover the property sooner.
Issue(s)
Whether the Deed of Absolute Sale dated April 2, 1979, executed by Lucia in favor of Angelica is valid and binding. Whether Lucia's action for reconveyance has prescribed.
Ruling
The Supreme Court granted the petition, reversed and set aside the decision of the Court of Appeals, declared the Deed of Absolute Sale dated April 2, 1979, null and void ab initio, and ordered the respondent heirs to reconvey the subject lot to the petitioners. The Register of Deeds was ordered to cancel the existing title and issue a new one in the petitioners' name.
Ratio Decidendi
On the validity of the Deed of Absolute Sale: The Court found that the Deed of Absolute Sale was simulated. The most prominent index of simulation is the complete absence of any attempt by the vendee (Angelica or her husband) to assert rights of ownership over the property. In this case, neither Angelica nor her husband took possession of the lot or exercised any act of dominion. Conversely, Lucia remained in actual possession, designating a caretaker who resided on the property and managed its fruits. Furthermore, Lucia religiously paid the real estate taxes from 1980 to 1987, which, when coupled with actual possession, serves as strong evidence of a claim of title and possession in the concept of an owner. The tax payments made by the respondent heirs were belated and made after the complaint was filed, indicating they were made as an afterthought to support their claim. The lower courts erred in considering Lucia's offers to sell and authority to look for a buyer as recognition of Angelica's ownership; these acts, in fact, further indicated the simulation, as Lucia was offering to sell a property that was supposedly no longer hers. The Court reiterated that the intention of the parties is paramount and is determined by their express agreement and their contemporaneous and subsequent acts. When parties do not intend to be bound at all, the contract is absolutely simulated. On the prescription of the action for reconveyance: The Court held that Lucia's action for reconveyance had not prescribed because she was in actual possession of the property. While an action for reconveyance generally prescribes in 10 years from the registration of the deed or issuance of the title, the Supreme Court has consistently ruled that this prescriptive period does not apply if the claimant is in actual possession of the land. A person in actual possession claiming ownership may wait until their possession is disturbed or their title is attacked before seeking to vindicate their right. Lucia's continuous and undisturbed possession of the subject lot gave her the continuing right to seek judicial aid to clarify the nature of the adverse claim against her title, a right that is not barred by the statute of limitations. The lower courts' reliance on the 10-year period was misplaced, as they failed to consider the exception for actual possession.
Main Doctrine
A deed of absolute sale is declared null and void ab initio if the evidence clearly shows that the parties did not intend to be bound by the contract, particularly when the vendee did not assert any act of dominion over the property and the vendor remained in actual possession and continued to pay real property taxes. An action for reconveyance based on a simulated sale does not prescribe if the claimant is in actual possession of the property.