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Court of Appeals

Before the Court is an appeal filed by the Sps. Frank and Isidra Espiritu ("appellants") from the Decision dated February 26, 2001 of the Regional Trial Court ("RTC") Branch 46, San Fernando City, Pampanga in Civil Case No. 11272 for recovery of possession with damages.

In the complaint filed before the trial court, Delfina Tan Vda. De Abriol, Estrella Tan Vda. De Mendoza, Felicidad Tan and Gloria Tan ("appellees") alleged that their paternal grandmother, Marciana Goco, and her children Guillermo, Pedro (father of the appellees), Hilario, Victoria, Ramon and Maria, all surnamed Tan-Chun-Bian,. co-owned a 1,017 square meter land in Arayat, Pampanga, covered by Original Certificate of Title ("OCT") No. 235 issued by the Register of Deeds of Pampanga on July 6, 1912. The parcel was denominated as Lot No. 126. Prior to 1933, a 126-square meter portion of the land was sold to Sps. Tomas and Teodora Perez ("Sps. Perez"), later denominated as Lot 126-B, with the remaining portion, measuring 878 square meters, denominated as Lot 126-A. On January 18, 1933, the Court of First Instance of Pampanga ordered the cancellation of OCT No. 235 and in lieu thereof, two new transfer certificates of title were issued for Lots 126-A and 126-B. Lot 126-A was changed to Lot No. 3927 while Lot 126-B was changed to Lot 3928. TCT No. 9346 was issued to Lot No. 3928 however TCT No. 9345 which is supposed to be issued for Lot 3927 was deleted from the registry book containing the said TCTs. Appellees alleged that Lot 3927 was declared for taxation purposes and they have been paying the same and that from time immemorial, their predecessors-in-interest had been occupying the said lot. They further explained that before the second world war, Isidra Espiritu's ("appellant's") mother, Librada Gatchalian, was allowed to construct a "barong-barong" in Lot No. 3927, with the tolerance of appellees' father, who was then administrator of the property. Upon the death of their grandmother and their father's siblings, appellees' father became the sole owner of the entire Lot 3927. Appellees' father died in 1976, thus they are now co-owners of the subject property. (Rollo, pp. 124-126).

Appellees further averred that they continued to tolerate the stay of the appellants on Lot 3927 without the latter paying anything to them. Later however, appellants house was improved using concrete materials without their knowledge or consent. Appellees wanted to use the property and so made several verbal and written demands on appellants to surrender possession of the 100 square meter portion they were occupying. Appellants however refused to do so. Appellees brought the matter to the barangay, to no avail and later to the Municipal Trial Court ("MTC") via an ejectment suit. The MTC however dismissed the case for lack of jurisdiction. (Rollo, p. 126).

Appellees thus filed before the RTC herein case for recovery of possession plus damages docketed as Civil Case No. 11272.

On February 26, 2001, the RTC rendered its Decision disposing as follows:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs [-appellees] and against the defendants[-appellants], by:

1. Ordering the defendants[-appellants] and all their successors in interest and all persons acting and claiming in their behalf to vacate the subject premises and turn over possession thereof to plaintiffs[-appellees];

1. Ordering the defendants[-appellants] to pay rent from November 23, 1993 at the rate of P3.000.00 per month until the property has been vacated;
   
   
2. Ordering defendants[-appellants], to pay to plaintiffs [-appellees] the amount of P50,000.00 as moral damages;
   
   
3. Ordering the defendants[-appellants] to pay to plaintiffs[-appellees] the amount of P25.000.00 as attorney's fees; and
   
   
4. Ordering defendants[-appellants] to pay the cost of suit.

SO ORDERED. (Rollo,pp. 129-120)

The trial court held that:

Section 47 of P.D. No. 1529 (Property Registration Decree) provides that "No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession."

The [appellees] with their documentary evidence have shown that their predecessors in interest, paternal grandmother Marciana Goco and her children, one of them Pedro [who] was [appellees'] father, are registered owners of Lot No. 3927 under TCT No. 9345, formerly Lot No. 127-A covered by OCT No. 235.

Lot No. 3927 covered by TCT No. 9345 having been registered in the name of [appellees'] predecessors in interest under the Torrens System, the right to recover possession of the same imprescriptible because possession is a mere consequence of ownership....

As held in several cases by our Supreme Court, adverse, notorious and continuous possession under a claim of ownership for a period fixed by law is ineffective against a Torrens title... (Rollo, pp. 128-129).

Appellees filed a motion for execution pending appeal (Records, pp. 247-248) which this Court granted on February 24, 2004. (Rollo, pp. 45-52). Appellants filed a Motion for Reconsideration but it was denied on May 13, 2004 (Rollo, pp. 53-58; 81-82).

The appellants are now before the Court claiming that:

I

THE TRIAL COURT ERRED IN NOT DECLARING THAT [APPELLEES] ARE GUILTY OF LACHES.

II

THE TRIAL COURT ERRED IN NOT HOLDING THAT PRESCRIPTION HAD SET IN TO BAR [APPELLEES] RIGHT OF ACTION AGAINST DEFENDANTS. (Rollo, 103).

Appellants aver that the appellees' right of action has already prescribed by virtue of appellants' possession of the land and their predecessors-in-interest for 80 years. While such defense was overruled by the RTC on the ground that the land was registered with a certificate of title, equitable laches should have been appreciated in appellants' favor. Laches is the failure or neglect, for an unreasonable length of time, to do that which by exercising due diligence, could or should have been done earlier. It is negligence or omission to assert a right within a reasonable time, warranting a presumption that a party entitled thereto either has abandoned it or declined to assert it. While appellants may not be considered as having acquired title by virtue of their predecessors' long continued possession for 80 years, the original owners' right to recover back the possession of the property has, by the long period of 80 years by the appellees and their predecessors' inaction and neglect, been converted to a state demand. Courts cannot look with favor at parties who, by their silence, delay and inaction, knowingly induced another to spend time, effort and expenses in cultivating the land, only to claim title thereto when the possessors' efforts and the land values offer an opportunity to make easy profit at the latter's expense. Appellants had long introduced major improvements on their house way back in 1964 and not a word of opposition was heard from the appellees. It was onfy when the value of the land has significantly increased due to the commercial stalls built thereon by appellants, did appellees suddenly claim possession thereof. (Rollo, pp. 109-113).

Appellants further assert that following the ruling in Cutanda v. Heirs of Cutanda (335 SCRA 418 [2000]), the remedies of accion publiciana or accion reinvidicatoria must be availed of within ten years from dispossession. In this case, appellants and their predecessors-in-interest have been in actual possession of the lot since 1936. Thus, the appellees' right of action to recover better possession thereof, under a claim of ownership pursuant to a purported decree, has prescribed for their apparent and unjustified failure to institute a formal action with the proper court within 10 years from dispossession thereof. Appellees demanded from appellants to vacate the premises starting in 1978 at which time, the appellees' cause of action had since then acrued against appellants. When the appellees filed their ejectment suit under the category of an accion publiciana on September 24, 1997, 19 years had already lapsed from 1978. (Rollo, pp. 113-116).

Appellees for their part argue that the appellant's possession of the property was merely by tolerance of appellees' predecessors-in-interest and not open, public, notorious that would ripen into ownership. It was only in the 1990s that the appellants put up a "no trespassing" sign and prevented the appellees from gathering fruits from the land. When confronted, appellants could not present any certificate of title, they also never paid taxes for the land. Appellees meanwhile, who were paying taxes on the land, filed an ejectment case against appellants in 1994. (Rollo, pp. 142-143).

The Court finds the appeal bereft of merit.

Appellants invoke both prescription and laches in support of their argument that appellees are already barred from asserting ownership over the subject property. Before going to the merits, a clarification must first be made.

Prescription is statutory, based on a fixed time and applies at law, while laches is based on equity. While prescription is concerned with the fact of delay laches is concerned with the effect of the delay, That is prescription is a matter of time while laches is principally a question of equity. (Cutanda v. Heirs of Cutanda, 335 SCRA 418, 425-426 [2000]).

Appellants admit that they could not have acquired the subject property through acquisitive prescription. They argue however that in view of their possession of the property for around 80 years, the appellees are now barred from claiming ownership of the same by virtue of prescription and laches.

The Court does not agree.

As correctly held by the trial court, no title to registered land in derogation of the title of the registered owner shall be acquired by acquisitive prescription or adverse possession. Indefeasibility and imprescriptibility are cornerstones of land registration proceedings. And absent any mistake or use of fraud in the procurement of the title, owners may rest secure on their ownership and possession once their title is registered under the protective mantle of the Torrens system. (Abadiano v. Martir, 560 SCRA 676, 693 [2008]).

In this case, appellees were able to present documentary evidence that the original certificate of title, OCT No. 235 covering the said property was in the name of their predecessor-in-interest, Marciana Goco. When a portion of the property was sold to Tomas Perez, the Court of First Instance of Pampanga ordered the issuance of two new transfer certificates of title, one in the name of Marciana Goco and Pedro, appellees' father , and Pedro siblings, and the other transfer certificate of title in the name of the Sps. Perez. (Exh. "A", "B" and -C").

Appellees also presented a Certification dated June 23, 1999 from the Registry of Deeds of Pampanga stating that the cancelled TCT No. 9346 in the name of Tomas Perez and TCT No. 9345 in the name of Marciana Goco, as well as OCT No. 235, are among those records destroyed by the flashfloods and lahar that inundated Pampanga in 1995. (Exh. "Z").

These documents were not controverted by appellants.

Appellees also presented Tax Declarations of the property in the name of Pedro Tan, appellees' father, for the years 1961 and 1985 (Exhs. "I" and "J") as well as tax receipts for the same property for the years 1960 to 1962 and 1994 to 1998 (Exhs. "I-A", "I-2", "I-3", "I-4"). Appellants however could not present any evidence that they paid any tax whatsoever for the property.

Appellants argue that following the ruling in Cutanda v. Heirs of Cutanda (supra) appellees' cause of action was barred by extinctive prescription, that is since more that 19 years have passed from the time appellees first demanded from appellants to vacate the premises in 1978 up to the time that appellees filed an ejectment suit in 1997, appellees' suit have already prescribed.

We are not persuaded.

In Cutanda, what was involved was an unregistered land, (supra, pp. 421-4427). Unlike in the present case where appellees were able to show that the subject property was originally covered by an Original Certificate of Title in the name of their grandmother, and later a Transfer Certificate of Title which unfortunately were destroyed by a fortuitous event.

The court recognizes that even if a Torrens title is indefeasible and imprescriptible, the registered landowner may lose his right to recover the possession of his registered property by reason of laches. (Abadiano v. Martir, supra, p. 693).

Indeed, laches applies even to imprescriptible actions. Its elements however must be proved positively. It is evidentiary in nature and cannot be established by mere allegations in the pleadings. (Abadiano v. Martir, supra, p. 695).

Laches, defined, is the failure to assert a right for an unreasonable and unexplained length of time, warranting a presumption that the party entitled to assert it has either abandoned or declined to assert it. Such equitable defense is based upon grounds of public policy, which requires the discouragement of state claims for the peace of society. (Heirs of Diaz v. Virata, 498 SCRA 141, 166-167 [2006]).

The four basic elements of laches are: (1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation of which complaint is made and for which the complaint seeks a remedy;  (2) delay in asserting the complainants' rights, the complainant having had knowledge or notice of the defendant's conduct and having been afforded an opportunity to institute suit; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and (4) injury or prejudice to the defendant in the event relief is accorded to the complainant or the suit is not held to be barred. (Abadiano v. Martir, supra, p. 694).

In this case, it cannot be said that appellees delayed in asserting their right over the property. Appellants' predecessor-in-interest was allowed by appellees' grandmother and father to build a shanty in the subject property. Apart from such occupation, there was no indication that appellants or their predecessor-in-interest exercised acts of ownership in an open, continuous, adverse, exclusive or notorious manner that would put appellees on guard. This was until the early 1990s when appellants put up a "no trespassing sign", after the appellees' relative Onofre Santos, left the property. (TSN, Edwin Abriol, October 21,. 1998, pp. 10-11). Appellees then filed an ejectment suit in 1994 which however was dismissed by the MTC and later the RTC in 1995 for lack of jurisdiction. (Records, pp. 191-193). After such dismissal, appellees instituted a case for recovery of possession, now subject of the present appeal.

Considering such circumstances, together with appellees' payment of realty taxes over the property throughout the years, it cannot be said that appellees slept on their rights that would give rise to laches.

WHEREAS, the appeal is denied for lack of merit. The Decision dated February 26, 2001 of the Regional Trial Court Branch 46, San Fernando City, Pampanga in Civil Case No. 11272 is hereby AFFIRMED.

SO ORDERED.

Villamor and Bueser,^* JJ., concur

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^* Acting Junior Member per Office Order No. 377-10-RSF dated December 8, 2010