Macababbad v. Masirag
REITERATIONFacts
The Antecedents: Respondents Fernando, Faustina, Corazon, Leonor, and Leoncio Masirag filed a complaint for quieting of title, nullity of titles, reconveyance, damages, and attorney's fees. They alleged that the deceased spouses Pedro and Pantaleona Masirag were the registered owners of Lot No. 4144. The respondents, as heirs of some of the children of the original owners, claimed that their shares in the property were fraudulently deprived from them through a falsified "Extra-judicial Settlement with Simultaneous Sale of Portion of Registered Land (Lot 4144)" dated December 3, 1967. This document purportedly bore their signatures, making them appear to have participated in the transaction when they had no knowledge of it. The document conveyed the property to Perfecto Macababbad, Jr., leading to the cancellation of the original certificate of title and the issuance of new titles, including one in the name of Chua Seng Lin and Say Un Ay for a portion of the land. Procedural History: The respondents filed their amended complaint on May 10, 1999. Macababbad, Chua, and Say filed motions to dismiss. The Regional Trial Court (RTC), Branch 4, Tuguegarao City, Cagayan, initially denied the motions but later reconsidered and dismissed the complaint on May 29, 2000. The RTC found that the action had prescribed, having been filed 32 years after the property was partitioned and sold, and that indispensable parties were not impleaded. The respondents appealed this dismissal to the Court of Appeals (CA). The CA reversed the RTC's dismissal, ruling that the complaint stated a valid cause of action and that the action had not prescribed because the alleged fraud rendered the extra-judicial settlement void and imprescriptible. The CA remanded the case for further trial. The Petition: Petitioners Perfecto Macababbad, Jr. (substituted by his heirs) and spouses Chua Seng Lin and Say Un Ay filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to nullify the CA's decision. They argued that the CA lacked jurisdiction to entertain the appeal, as it involved pure questions of law that should have been filed directly with the Supreme Court. Alternatively, they contended that the CA erred in finding that the complaint stated a cause of action, in ruling that the action was imprescriptible, and in disregarding the RTC's finding of failure to implead indispensable parties. The petitioners also argued that the RTC's dismissal on the ground of non-joinder of indispensable parties had become final and executory because the CA did not rule on this specific issue. The respondents countered that the appeal involved mixed questions of fact and law, that the non-inclusion of indispensable parties was not a ground for dismissal, and that their action was for the annulment of a void instrument, which is imprescriptible, or alternatively, an action for reconveyance based on fraud discovered in 1999, thus timely filed.
Issue(s)
Whether the Court of Appeals had jurisdiction to pass upon and rule on the appeal. Whether the RTC erred in dismissing the case on the ground of prescription and whether laches applies. Whether the RTC erred in dismissing the case on the ground of failure to implead indispensable parties. Whether the CA erred in its interpretation of the nature of the cause of action and its prescriptive period (addressed implicitly in the discussion of prescription).
Ruling
The Supreme Court denied the petition for review for lack of merit. It affirmed the Court of Appeals' decision, finding that the CA had jurisdiction to hear the appeal as it involved mixed questions of fact and law. The Court held that the action to declare the nullity of the extrajudicial settlement and sale was imprescriptible and that laches had not set in. The Court also ruled that the non-joinder of parties is not a ground for dismissal of an action.
Ratio Decidendi
On the jurisdiction of the Court of Appeals: The Court held that the appeal raised mixed questions of fact and law, which fall within the appellate jurisdiction of the CA through an ordinary appeal. The nature of the issues, particularly regarding prescription, required an analysis of the truth or falsity of alleged facts, necessitating a review of evidence, thus making it a question of fact. The Court cited Crisostomo v. Garcia and Ingjug-Tiro v. Casals to support the view that prescription and related issues often involve factual matters requiring trial on the merits, making summary dismissal improper and ordinary appeal to the CA the correct procedural recourse. On prescription and laches: The Court ruled that the respondents' action to declare the nullity of the extrajudicial settlement and sale was imprescriptible, as it falls under Article 1410 of the Civil Code concerning actions to declare the inexistence of a contract. The Court emphasized that even with the issuance of Transfer Certificates of Title (TCTs), the action remains imprescriptible if the original conveyance was void ab initio. The Court also found that laches could not be invoked as the case had not reached the evidentiary stage and laches is evidentiary in nature. The Court reiterated the principle from Ingjug-Tiro and Heirs of Rosa Dumaliang v. Serban that an action for the declaration of the inexistence of a contract does not prescribe and that laches cannot be set up against an imprescriptible legal right. On the non-joinder of indispensable parties: The Court found the RTC's dismissal on the ground of non-joinder of indispensable parties to be erroneous. Citing Rule 3, Section 11 of the Rules of Court, the Court stated that neither misjoinder nor non-joinder of parties is a ground for dismissal of an action. The proper remedy is to implead the indispensable party at any stage of the action, either by court order or motion. The Court noted that the RTC never issued an order directing the inclusion of parties, thus there was no basis for immediate dismissal. The Court also dismissed the petitioners' argument that the RTC's ruling on this ground had become final and executory due to the CA's alleged failure to rule on it, stating that an appellate court need not rule on every issue if it does not alter the ultimate ruling. The Court's ruling on prescription implicitly addresses the CA's interpretation of the nature of the cause of action and its prescriptive period, as the Court determined the action was imprescriptible.
Main Doctrine
An action to declare the nullity of an extrajudicial settlement of estate and sale, based on allegations of forgery and fraud, is imprescriptible pursuant to Article 1410 of the Civil Code, and the issuance of certificates of title does not validate a void contract or convert the action into one of reconveyance that prescribes. Furthermore, the non-joinder of parties is not a ground for dismissal of an action under Rule 3, Section 11 of the Rules of Court.