Spouses Ty v. Heirs of Spouses Palermo and Doloritos

 

Spouses Ty v. Heirs of Spouses Palermo and Doloritos

G.R. No. 240863

October 6, 2021

 

FACTS:

Rufino Corpin owned a parcel of land in Buug, Zamboanga Sibugay, which was leased to Ty Wan Yong, the father of petitioner Jose Ty. During the lease term, Corpin sold the land to Spouses Leonardo Z. Palermo and Petronia Doloritas Palermo through a Deed of Absolute Sale. Yong acknowledged Leonardo's ownership and paid his rentals to him. When Yong discovered that the land was still owned by the Republic of the Philippines, he stopped paying his rentals. Leonardo sent demand letters to Yong, but they were unheeded. Leonardo filed an ejectment case against Yong, which was resolved in favor of Leonardo. Yong appealed the case to the Court of Appeals (CA), but he died during the proceedings and was substituted by Jose Ty. The CA dismissed the appeal, and an entry of judgment was issued. Jose and his wife Estrella applied for a free patent over the land and were able to register it under their names. The heirs of Leonardo and Petronia filed a complaint for declaration of nullity of the affidavit of confirmation of sale and rights and improvements, cancellation of the original certificate of title, reconveyance, and damages. The trial court dismissed the case on the grounds of lack of cause of action and prescription. The CA reversed the trial court's decision and ruled in favor of the heirs of Leonardo and Petronia. Jose and Estrella filed a petition for review on certiorari before the Supreme Court.

ISSUE:

Whether or not the Court of Appeals correctly interpreted the law regarding prescription based on the established facts.

HELD:

Yes. The Court of Appeals correctly applied the law on prescription based on the undisputed facts of the case. In this case, the respondents' action for reconveyance was not subject to prescription because they were in possession of the property and had alleged fraud in the registration of the title. The action filed by the heirs of Leonardo and Petronia is not an action for reversion, but for the declaration of nullity of the affidavit of confirmation of sale and rights and improvements, cancellation of the original certificate of title, and reconveyance. The real party in interest in this case is the heirs of Leonardo and Petronia, not the State, as they claim a right of ownership over the property even before the issuance of the title in favor of Jose Ty. The Court rejected the petitioners' argument that the respondents did not have the authority to institute the action, as the complaint sought to transfer the title registered in the petitioner's name to the respondents. The Court affirmed the CA's decision and ordered the petitioners to surrender the certificate of title to the heirs of Leonardo and Petronia.