Gozo v. Philippine Union Mission Corp.
REITERATIONFacts
The Antecedents: The underlying dispute concerns a 5,000 square meter portion of a 236,638 square meter parcel of land in Lanao del Norte. Petitioners, as heirs of the original possessors, Spouses Rafael and Concepcion Gozo, claim ownership of the entire property. Respondents, the Philippine Union Mission Corporation of the Seventh Day Adventist Church (PUMCO-SDA) and related entities, assert ownership over the 5,000 square meter portion based on a February 28, 1937 Deed of Donation executed by the Spouses Gozo. Respondents took possession of this portion and constructed a church and elementary school. Procedural History: The Spouses Gozo were granted a Homestead Patent on August 22, 1953, and Original Certificate of Title (OCT) No. P-642 was issued in their names on October 5, 1953. Following Rafael Gozo's death, his heirs, including Concepcion, executed an extrajudicial partition, leading to Transfer Certificate of Title (TCT) No. (T-347)-292 in their names on January 13, 1954. In 1992, Concepcion had the entire property surveyed, revealing the donation was not annotated on the title. This led to a dispute, and on June 19, 2000, petitioners filed an action for Declaration of Nullity of Document, Recovery of Possession and Ownership with Damages. The Regional Trial Court (RTC) ruled in favor of the petitioners, declaring the Deed of Donation void for lack of acceptance and holding that an action for nullity of a contract does not prescribe. The Court of Appeals reversed the RTC decision, finding the action barred by laches, and this decision was later denied reconsideration. The Petition: Petitioners, the Heirs of Rafael Gozo, filed this Petition for Review on Certiorari under Rule 45 of the Rules of Court. They seek to reverse the Court of Appeals' decision and resolution, arguing that the appellate court erred in finding their action barred by laches. Petitioners contend that the Deed of Donation is void from the beginning because the Spouses Gozo had no proprietary right over the land at the time of its execution, as it was still part of the public domain. They assert that a void contract cannot be ratified and that an action to declare its nullity is imprescriptible, thus laches should not apply.
Issue(s)
Whether the Court of Appeals erred in reversing the RTC decision on the ground of laches. Whether the Deed of Donation dated February 28, 1937, is valid.
Ruling
The petition is GRANTED. The assailed Decision and Resolution of the Court of Appeals are REVERSED and SET ASIDE. The Deed of Donation is declared void ab initio.
Ratio Decidendi
On the issue of laches: The Court reiterated that a void contract produces no legal effect whatsoever (quod nullum est, nullum producit effectum). As a void contract, the Deed of Donation could not have transferred title to the respondents. Consequently, the respondents could not invoke acquisitive prescription to justify their occupation. Furthermore, the action for the declaration of absolute nullity of a void contract is imprescriptible. The Court found that the petitioners' assertion of their rights through the homestead application, the issuance of the title in their names, and the subsequent extrajudicial partition, all without objection from the respondents, demonstrated that it was the respondents who remained silent about their supposed rights, not the petitioners who slept on their rights. Thus, the doctrine of laches was inapplicable. On the issue of the validity of the Deed of Donation: The Supreme Court held that the Deed of Donation executed on February 28, 1937, is void ab initio. This is because, at the time of the donation, the subject property was part of the inalienable public domain and thus belonged to the State under the Regalian Doctrine. The Spouses Gozo, as mere possessors without a grant from the State, had no proprietary right to dispose of the land. Consequently, they could not validly donate a property they did not own. The Court emphasized that no one can give what one does not have (nemo dat quod non habet). The donation was only made possible after the State ceded its rights to the Spouses Gozo through a Homestead Patent on August 22, 1953, and the issuance of an Original Certificate of Title on October 5, 1953. Therefore, any disposition made prior to the vesting of ownership in the Spouses Gozo is null and void from the beginning.
Main Doctrine
A deed of donation involving a property that is part of the public domain at the time of its execution is void ab initio because the donor has no proprietary right to dispose of the land. Such a void contract produces no legal effect and cannot transfer title, and the action for its declaration of nullity is imprescriptible.