Ocampo v. Ocampo
REITERATIONFacts
The Antecedents: Petitioner Jose S. Ocampo and respondent Ricardo S. Ocampo are brothers. Respondent filed a complaint for partition and annulment of Transfer Certificate of Title (TCT) No. 102822 over a property originally registered in their parents' names. Respondent alleged that his signature on an Extra-Judicial Settlement with Waiver (ESW) dated September 1970 was falsified, leading to the transfer of the property to petitioner under TCT No. 102822. An NBI report found respondent's signature to be forged. Petitioner claimed the property was donated to him and his wife, and that he paid for it through loans and a subsequent Deed of Absolute Sale from their father. Procedural History: The Regional Trial Court (RTC) initially dismissed the complaint on the ground of prescription. The Court of Appeals (CA) declared the RTC's dismissal order void. The RTC subsequently denied a motion for writ of execution, stating the case should be tried on the merits. After an amended answer was filed by petitioner, trial proceeded. The RTC ruled in favor of respondent, ordering partition and annulment of TCT No. 102822. The CA affirmed the RTC's decision. Petitioner's motion for reconsideration was denied. The Petition: Petitioner argues that the CA erred in finding the ESW forged, in sustaining that it is a void contract, and in ruling that the action is not barred by laches. He contends that the ESW, being notarized, enjoys a prima facie presumption of authenticity, and that respondent's action is barred by estoppel by laches due to unreasonable delay.
Issue(s)
Whether the CA erred in finding that the preponderance of evidence lies in favor of the view that the signature of the respondent is not genuine. Whether the CA erred in sustaining that the ESW is a void or inexistent contract. Whether the CA erred in ruling that the action to declare the nullity of the ESW is not barred by laches.
Ruling
The petition is denied. The Decision of the Court of Appeals affirming the Regional Trial Court's Decision ordering the partition of the property and the annulment of TCT No. 102822 is affirmed. The Regional Trial Court is ordered to proceed with the partition of the subject lot with dispatch.
Ratio Decidendi
On the issue of whether the CA erred in finding that the preponderance of evidence lies in favor of the view that the signature of the respondent is not genuine: The Court held that questions of fact are not reviewable under Rule 45 of the Rules of Court, and the factual findings of the lower courts, if supported by substantial evidence, are accorded great respect and finality. In this case, the records showed that preponderant evidence established the falsity of the ESW and the fraudulent registration of the subject property in petitioner's name. The NBI report, coupled with the testimonies of respondent and his wife, and petitioner's admission on cross-examination that he was not present during the ESW's execution, sufficiently supported the finding of forgery. Therefore, the Court saw no reason to overturn the factual findings of the trial court as affirmed by the CA. On the issue of whether the CA erred in sustaining that the ESW is a void or inexistent contract: The Court affirmed the CA's ruling that the action to annul the ESW is imprescriptible because it is a void or inexistent contract. The Court reiterated that the Torrens system was not designed to shield fraud or misrepresentation. When property is acquired through mistake or fraud, the person obtaining it is considered a trustee of an implied trust for the benefit of the person from whom the property comes, as provided by Article 1456 of the New Civil Code. A forged document is considered void and inexistent from the beginning, and an action to declare its nullity does not prescribe. On the issue of whether the CA erred in ruling that the action to declare the nullity of the ESW is not barred by laches: The Court found no merit in petitioner's argument of laches. Laches is defined as the failure or neglect for an unreasonable and unexplained length of time to do that which by the exercise of due diligence could or should have been done earlier. The Court noted that respondent had filed several cases, including criminal complaints for falsification, estafa, and forgery, to assert his rights over the property. The filing of these cases at different times negated the claim of laches. The Court emphasized that courts, under the principle of equity, will not be strictly bound by the statute of limitations or laches when doing so would result in manifest wrong or injustice. Furthermore, the Court clarified that an action for reconveyance based on an implied or constructive trust generally prescribes in ten years, but if the plaintiff remains in possession of the property, the prescriptive period does not run against him, and the action is deemed in the nature of a quieting of title, which is imprescriptible. Since respondent was in actual possession of the subject property at the time of the filing of the complaint, the case was treated as an action for quieting of title.
Main Doctrine
An action for reconveyance based on an implied or constructive trust generally prescribes in ten years, but if the plaintiff remains in possession of the property, the prescriptive period to recover title of possession does not run against him, converting the action into one for quieting of title, which is imprescriptible.