ESTOPPEL BY LACHES

Sanchez v. Sanchez
G. R. No. 187661, December 4, 2013

The instant controversy was brought to fore because of the Deed of

Absolute Sale, dated November 25, 1981, which expressly states that the parcel
of land registered in the name of Andrew has been conveyed to his brother,
Modesto through a sale. Andrew assailed the said document as sham and
replete with falsehood and fraudulent misrepresentation. In 2000, Modesto,
through Yap, his live-in partner allegedly offered again to buy the said property,
but Andrew refused. Andrew later discovered that his certificate of title was
missing. He filed an Affidavit of Loss with the Registry of Deeds of Manila.
Subsequently, he learned that a Petition for Reconstitution of TCT No. 143744
was filed by Modesto on the basis of the said deed of sale, which already
appeared to have been notarized in 1981. Thus, Andrew filed the case to seek
for the annulment of the said document. During the pendency of the case,
Andrews certificate of title was cancelled and a new one in the bane of Modesto
was issued. The RTC issued an order dismissing the complaint on the grounds
of prescription and laches. The Court of Appeals reversed and remanded the
case.
ISSUE: Whether or not the prescription already applies on the pleadings.
In the case at bar, by merely basing analysis on the pleadings submitted,
in particular, the complaint, it would be an impossibility to deduce the truth as
to whether the price stated in the deed was in fact paid. The only way to prove
this is by going to trial. On the other hand, a different analysis of the statement
transaction did not push through since defendant did not have the financial
wherewithal to purchase the subject property may yield another
interpretation. One can also deduce that what actually transpired was a simple
non- payment of purchase price, which will not invalidate a contract and could
only give rise to the other legal remedies such as rescission or specific
performance. In this scenario, the contract remains valid and therefore subject
to prescription.
It is also apparent from the pleadings that both parties denied each
others allegations. It is then but logical to review more evidence on disputed

matters. On this score alone, it is apparent that the complaint on its face does
not readily show that the action has already prescribed. We emphasize once
more that a summary or outright dismissal of an action is not proper where
there are factual matters in dispute, which require presentation and
appreciation of evidence.
Furthermore, well settled is the rule that the elements of laches must be
proven positively. Laches is evidentiary in nature, a fact that cannot be
established by mere allegations in the pleadings and cannot be resolved in a
motion to dismiss. At this stage therefore, the dismissal of the complaint on the
ground of laches is premature. Those issues must be resolved at the trial of the
case on merits, wherein both parties will be given ample opportunity to prove
their respective claims and defenses.

ESTOPPEL BY LACHES
Citibank N.A and Citigroup Private Bank v. Ester H. Tanco- Gabaldon,
Arsenio Tanco and the Heirs of Ku Tiong Lam
G. R. No. 198444, September 4, 2013

Sometime in March 2000, the respondents met with petitioner Lim, who
induced them into signing a subscription agreement for the purchase of USD
2, 000,000.00 worth of Ceres II Finance Ltd. Income Notes. In September, they
met again with Lim for another investment proposal for the purchase of USD
500, 000.00 worth aeries Finance II Ltd. Senior Subordinated Income Notes. In
a January 2003 statements issued by the Citigroup, the respondents learned
that their investments declined, until their account was totally wiped out. Upon
verification with the SEC, they learned that the Ceres II finance Ltd. And the
petitioners, among others, are not duly-registered security issuers , brokers,
dealers or agents. Hence, they filed a complaint.
In an order dated December 8, 2008, the SEC-EPD terminated its
investigation on the ground that the respondents action has already
prescribed. According to the SEC-EPD, the aforesaid complaint was filed
before (SEC-EPD) on 21 September 2007 while a similar complaint was lodged
before the (DOJ) on October 2005. Seven (7) years had lapsed before the filing
of the action before the SEC while the complaint instituted before the DOJ was
filed one month after the expiration of the allowable period. It appears that on
October 24, 2005 the respondents had already filed with the Mandaluyong City
Prosecutors Office a complaint for violation of the RSA and SRC but it was
referred to the SEC pursuant to Baviera v. Prosecutor Paglinawan.
ISSUE: 1. Whether the criminal action for offenses punished under the SRC
filed by the respondents against the petitioners has already prescribed.
2. Whether the filing of the action for the petitioners administrative
liability is barred by laches.
1. No. Hand in hand with Section 1, Section 2 of Act No. 3326 states that
prescription shall begin to run from the day of the commission of the violation
of the law, and if the same be not known at the time, from the discovery thereof
and the institution of judicial proceedings for its investigation and

punishment. In Republic v. Cojuangco, Jr. the Court ruled that Section

provides two rules for determining when the prescriptive period shall begin to
run: first, from the day of the commission of the violation of the law, if such
commission is known; and the second, from its discovery, if not known, and the
institution of judicial proceedins for its investigation and punishment.
The respondent alleged in their complaint that the transaction occurred
between September 2000, when they purchased the Subscription Agreement
for the purchase of USD 2, 000,000.00 worth Ceres II Finance Ltd. Income
Notes, and July 31, 2003, when their Ceres II Finance Ltd. Account was totally
wiped out. Nevertheless, it was only sometime in November 2004 that
respondents discovered that the securities they purchased were actually
worthless. Thereafter, the respondents filed on October 23, 2005 with the
Mandaluyong City Prosecutors Office a complaint for violation of the RSA and
SRC. In resolution dated July 18, 2007, however, the prosecutors office
referred the complaint to the SEC. Finally, respondents filed the complaint with
SEC on September 21, 2007. Based on the foregoing antecedents, only seven
(7) years lapsed since the respondents invested their funds with the petitioners,
and three (3) years since the respondents discovery of the alleged offenses,
that the complaint was correctly filed with the SEC for investigation. Hence, the
respondents complaint was filed well within the twelve (12) year prescriptive
period provided by Section 1of Act. No. 3326.
2. No. On this score, it is a well settled principle of law that laches is a
recourse inequity, which is, applied only in the absence of statutory law. And
though an ache applies even to imprescriptibly actions, its elements must be
proved positively. Ultimately, the question of laches is addressed to the sound
discretion of the Court and, being an equitable the doctrine, its application is
controlled by equitable considerations. In this case, records bear that
immediately thereafter the respondents discovered in 2004 that the securities
they invested in where actually worthless, they filed on October 23, 2005 a
complaint for violation of the RSA and SRC with the Mandaluyong City
Prosecutor Office. It took the prosecutor three years to resolve the complaint
and refer the case to the SEC in conformity with the courts pronouncement in
Baviera that all complaints for any violation of the SRC and its implementing
rules and regulations should be filed with the SEC. Clearly, the filing of the
complaint with the SEC on September 21, 2007 is not barred by laches as the
respondents judicious actions reveal otherwise.

ESTOPPEL BY LACHES
Bobby Tan v. Grace Andrade et.al
G.R. No. 171904, Aug 7, 2013

Rosario Vda. De Andrade owned four (4) parcels of land which she
mortgaged to and subsequently foreclosed by Simon. When redemption period
was about to expire, Rosario sought assistance of Bobby Tan. Thereafter,
Rosario sold the same to Bobby. On July 26, 1983, Proceso, Jr. executed a
Deed of Assignment, ceding unto Bobby his rights and interests over the
subject properties in consideration of P50, 000.00. The Deed of Assignment
was signed by, among others, Henry Andrade (Henry), one of Rosarios sons, as
instrumental witness. Notwithstanding the aforementioned Deed of
Assignment, Bobby extended an Option to Buy11 the subject properties in
favor of Proceso, Jr., giving the latter until 7:00 in the evening of July 31, 1984
to purchase the same for the sum of P310, 000.00. When Proceso, Jr. failed to
do so, Bobby consolidated his ownership over the subject properties, and the
TCTs12 therefore were issued in his name.
After fourteen years, Rosarios children challenged the transaction
between Rosario and Bobby. They alleged that the subject of transaction was
not of sale but was actually on equitable mortgaged. They also claimed that
since the subject properties were inherited by them from their father, Proceso
Andrade, Sr. (Proceso, Sr.), the subject properties were conjugal in nature, and
thus, Rosario had no right to dispose. Thus, a complaint for reconveyance and
annulment of deeds were filed.
In his defense, Bobby contended that the subject properties were solely
owned by Rosario per the TCTs issued in her name and that he had validly
acquired the same upon Proceso, Jr.s failure to exercise his option to buy back
the subject properties.15 He also interposed the defenses of prescription and
laches against the Andrades.16
The Regional Trial Court (RTC) dismissed the complaint. The Court of
Appeals, on the other hand uphold in part the RTCs ruling. Hence, this
petition.

ISSUE: Whether or not the defenses of prescription and laches against

Andrades will pursue.
Yes. The Court observes that laches had already set in, thereby
precluding the Andrades from pursuing their claim. Case law defines laches as
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.
Records disclose that the Andrades took 14 years before filing their
complaint for reconveyance in 1997. The argument that they did not know
about the subject transaction is clearly belied by the facts on record. It is
undisputed that Proceso, Jr. was a co-vendee in the subject deed of sale, while
Henry was an instrumental witness to the Deed of Assignment and Option to
Buy both dated July 26, 1983. Likewise, Rosarios sons, Proceso, Jr. and
Andrew, did not question the execution of the subject deed of sale made by
their mother to Bobby. These incidents can but only lead to the conclusion that
they were well-aware of the subject transaction and yet only pursued their
claim years after the sale was executed.

ESTOPPEL BY LACHES
Far East Bank and Trust Company ( now Bank of the Philippine Islands)
and Rolando Borja, Deputy Sheriff v. Sps. Ernesto and Leoner C. Cayetano.
G.R. No. 179909, January 25, 2010

Respondent Leonor C. Cayetano (Cayetano) executed a special power of

attorney in favor of her daughter Teresita C. Tabing (Tabing) authorizing her to
contract a loan from petitioner in an amount not more than three hundred
thousand pesos (P300,000.00) and to mortgage her two (2) lots located in
Barangay Carolina, Naga City with Transfer Certificate of Title Nos. 12304 and
11621. For the approval of the loan, Cayetano also executed an affidavit of nontenancy. Petitioner loaned Tabing one hundred thousand pesos (P100,000.00)
secured by two (2) promissory notes and a real estate mortgage over Cayetanos
two (2) properties. The mortgage document was signed by Tabing and her
husband as mortgagors in their individual capacities, without stating that
Tabing was executing the mortgage contract for and in behalf of the owner
(Cayetano).
Petitioner foreclosed the mortgage for failure of the respondents and the
spouses Tabing to pay the loan. A notice of public auction sale, to be conducted
on September 18, 1991, was sent to respondents. The latters lawyer
responded with a letter to petitioner requesting that the public auction be
postponed. Respondents letter went unheeded and the public auction was held
as scheduled wherein the subject properties were sold to petitioner for one
hundred sixty thousand pesos (P160,000.00). Subsequently, petitioner
consolidated its title and obtained new titles in its name after the redemption
period lapsed without respondents taking any action. More than five (5) years
later, Tabing, on behalf of Cayetano, sent a letter dated September 10, 1996 to
petitioner expressing the intent to repurchase the properties for two hundred
fifty thousand pesos (P250,000.00) with proposed terms of payment. Petitioner
refused the offer stating that the minimum asking price for the properties was
five hundred thousand pesos (P500,000.00) and it was not amenable to the
proposed terms of payment. Petitioner nevertheless gave respondents the
chance to buy back the properties by joining a bidding to be set in some future
date. However, respondents filed on December 18, 1996 a complaint for
annulment of mortgage and extrajudicial foreclosure of the properties with
damages in the RTC of Naga City. Respondents sought nullification of the real

estate mortgage and extrajudicial foreclosure sale, as well as the cancellation of

petitioners title over the properties.
ISSUE: Whether or not the principle of laches is applicable in the case.
Yes. Notwithstanding the nullity of the real estate mortgage executed by
Tabing and her husband, we find that the equity principle of laches is
applicable in the instant case. Laches is negligence or omission to assert a
right within a reasonable time, warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert it. Its essential
elements are: (1) conduct on the part of the defendant, or of one under whom
he claims, giving rise to the situation complained of; (2) delay in asserting
complainants right after he had knowledge of the defendants conduct and
after he has an opportunity to sue; (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.
There is no absolute rule on what constitutes laches. It is a creation of
equity and applied not really to penalize neglect or sleeping upon ones rights
but rather to avoid recognizing a right when to do so would result in a clearly
inequitable situation. The question of laches, we said, is addressed to the
sound discretion of the court and each case must be decided according to its
particular circumstances. Verily, in a number of cases, it had been held that
laches, the essence of which is the neglect to assert a right over a long period of
time, may prevent recovery of a titled property.
In the present case, records clearly show that respondents could have
filed an action to annul the mortgage on their properties, but for unexplained
reasons, they failed to do so. They only questioned the loan and mortgage
transactions in December 1996, or after the lapse of more than five (5) years
from the date of the foreclosure sale. It bears noting that the real estate
mortgage was registered and annotated on the titles of respondents, and the
latter were even informed of the extrajudicial foreclosure and the scheduled
auction. Instead of impugning the real estate mortgage and opposing the
scheduled public auction, respondents lawyer wrote a letter to petitioner and
merely asked that the scheduled auction be postponed to a later date. Even
after five (5) years, respondents still failed to oppose the foreclosure and the
subsequent transfer of titles to petitioner when their agent, Tabing, acting in
behalf of Cayetano, sent a letter proposing to buy back the properties. It was

only when the negotiations failed that respondents filed the instant case.
Clearly, respondents slept on their rights.