G.R. No. 108952 January 26, 1995 about the purchase of the property.
Her brother responded telling
NILO A. MERCADO, petitioner,
vs.
THE COURT OF APPEALS AND AUREA A. MERCADO,
respondents.
PUNO, J.:
This is a petition for certiorari to review the Decision of the
respondent Court of Appeals dated August 30, 1991 declaring
private respondent a co-owner of the lot covered by TCT No. 123560
of the Register of Deeds of Quezon City.
The facts are well established in the disputed Decision, viz:
Plaintiff Aurea A. Mercado seeks the partition and reconveyance to
her of one-half of a real property located at No. 181 Esteban Abada
Street, Quezon City, described as Lot 17-A, Block 40 in Transfer
Certificate of Title No. 123560 of the Registry of Deeds of Quezon
City, containing an area of P1,000 square meters, more or less and
registered in the name of defendant Nilo A. Mercado.
Plaintiff Aurea A. Mercado is 69 years old, still single, a professor,
holder of a degree in Ph. D. Data of Philosophy, Research, Statistics
and Measurement from the University of Maryland, U.S.A and used
to work in the United States. She is a legitimate sister of Nilo A.
Mercado.
Before she left for the United States in 1964 where she stayed up to
1984, she gave her brother University of the Philippines. She wanted
a property near U.P because she planned to teach in the said
university when she comes back. She was not given any receipt for
the money handed to her brother.
Sometime in 1967, she was informed through letters received from
the Philippines coming from her mother and sister that her brother
Nilo had already purchased a property located at No. 181 Esteban
Abada Street, Quezon City. She never saw the title of the property
covered by TCT No. 123560.
In 1972, her brother went to the United States and visited her in
her house at Jersey City. On this occasion, she asked her brother
her not to worry for he would give her a paper with respect to that
property. In 1978, her brother Nilo sent through their mother an
affidavit (Exh. A) wherein Nilo admitted the existence of co-
ownership over the property.
Through letters, she communicated with her brother Nilo regarding
the subject property. In one of those letters (Exh. B), she told her
brother to pay her for the lot. In two other letters (Exh. C & D), the
same property was the subject matter. She did not receive any reply
so she started calling him through the telephone, insisting on the
partition of the property because she committed the land as
payment to the contractor, Mr. Escora, who constructed her school
building in Davao City.
Nilo A. Medina (sic), defendant herein, is 57 years old, a graduate
of law UP class 1957 and a businessman by occupation. He testified
that the plaintiff is his sister.
In 1967, he decided to buy a house and lot worth P95,000.00
located at 181 Esteban Abada Street, Quezon City from the spouses
Francisco Vargas and Teresita Vargas. Out of his personal savings,
money borrowed from his mother and sister Esmeralda and
P20,000.00 borrowed from his sister Aurea, he was able to pay the
downpayment of P38,000.00 to spouses Vargas. It was only upon
his tender of the downpayment that the spouses executed a Deed
of Conditional Sale (Exh. 5). He applied for a housing loan with the
Social Security System (System for short) and upon its approval by
the System, a Deed of Absolute Sale was executed between him and
the spouse Vargas (Exhs. 1, 2, 3, 4 & 6).
He paid the amortization for the loan (Exh. 11). However, due to
financial reverses, the property was foreclosed by the System (Exh.
9). Fortunately, he was able to redeem the property from the
System in 1980 out of the insurance proceeds of his burned property
in Davao. A certificate of redemption (Exh. 10) was issued to him
and he caused the cancellation of the mortgage with the System.
As proof of his ownership, he has the tax declaration (Exh. 8),
Transfer Certificate of Title No. 123560 in his name (Exh. 7) and real
property tax bill receipts evidencing payment of real estate taxes on
the property (Exhs. 13, 13-a).
The petition for certiorari was initially denied by this Court in its
Resolution on May 17, 1993 for non-compliance with our Revised
Circular 1-88, for raising factual issues and for lack of reversible
error committed by the respondent Court of Appeals. The Court also
denied with finality petitioner's Motion for Reconsideration in a
Resolution dated July 14, 1993. The motion raised no substantial
argument and the Court found no compelling reason to grant it.
On August 23, 1993, however, petitioner filed a Motion for Leave to
file a Second Motion for Reconsideration. He argued, among others,
that even assuming the correctness of the factual findings of the
respondent Court of Appeals, still, there could not be any co-
ownership of the subject property. The Court required private
respondent to comment and, in its Resolution of August 22, 1994,
granted the Motion "in the interest of justice and considering the
crucial importance of the issue of extinguishment of co-ownership"
and gave due course to the petition. Extensive memoranda were
then filed by the petition.
We find no merit in the petition.
We sustain the finding of the respondent court that the subject
property is co-owned by petitioner and private respondent. This
finding is based on the admission made by petitioner himself in his
Affidavit (Exh. "A") dated March 2, 1973, which states:
AFFIDAVIT
That I, NILO A. MERCADO, of legal age, married, Filipino and a
resident of Davao City, Philippines, after having been duly sworn to
in accordance with law, depose and say the following:
That I am the co-owner of a residential land, including all
the improvements existing thereon, located at 81 E.
Abada, Loyola Heights, Quezon City, with my sister Aurea
A.Mercado;
That being co-owners, we share equally over the above-
mentioned properties, including all the encumbrances and
its obligations and liabilities to the Social Security System
and other governmental agencies;
That I am executing this affidavit to inform the proper
authorities concerned that the parcel of residential land,
including the residential house, together with all its
liabilities, is owned by me in co-ownership with Aurea A.
Mercado.
That I am executing this affidavit freely and voluntarily
without any force or intimidation imposed upon me.
IN WITNESS WHEREOF, I have hereunto set my hand this 2(nd)
day of March, 1973, at the City of Davao City, Philippines.
(Sgd.) NILO A. MERCADO
Affiant
This affidavit is high quality evidence. It contains admission against
interest on the part of petitioner. As a lawyer, petitioner cannot
pretend that the plain meaning of his admission eluded his mind.
We now come to the issue of whether the mortgage of the subject
property to the SSS, its foreclosure and subsequent redemption by
the petitioner extinguished private respondent's co-ownership. The
applicable law is Article 493 of the New Civil Code which spells out
the rights of co-owners over a co-owned property, viz:
Art. 493. Each co-owner shall have the full ownership of
his part and of the fruits and benefits pertaining thereto,
and he may therefore alienate, assign or mortgage it and
even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the
alienation or mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him
in the division upon the termination of the co-ownership.
(emphasis ours)
Pursuant to this law, a co-owner has the right to alienate his pro-
indiviso share in the co-owned property even without the consent of
the other co-owners. Nevertheless, as a mere part owner, he cannot
alienate the shares of the other co-owners. The prohibition is
premised on the elementary rule that "no one can give what he does
not have" (Nemo dat guod non habet). Thus, we held in Bailon-
Casilao vs. Court of Appeals, viz:
. . . since a co-owner is entitled to sell his undivided share, a sale of
the entire property by one-co-owner without the consent of the
other co-owners is not null and void. However, only the rights of the
co-owner-seller are transferred, thereby making the buyer a co-
owner of the property.
The proper action in cases like this is not for the nullification of the
sale or for the recovery of possession of the thing owned in common
from the third person who substituted the co-owner or co-owners
who alienated their shares, but the DIVISION of the common
property of the co-owners who possessed and administered it.
In the case at bench, it is established that petitioner, for his own
benefit, borrowed money from the SSS and mortgaged the subject
property to the SSS on June 5, 1967 without the knowledge and
consent of his co-owner, herein private respondent. Necessarily,
private respondent could not have helped in the payment of the SSS
loan nor could she have redeemed the subject property from the
SSS. Under these circumstances, it will not accord with the letter
and intent of Article 493 of the Civil Code to rule private respondent
lost her part ownership of the subject property finds no warrant both
in law and in equity. It will be the height of absurdity to reward
petitioner for his illegal act of appropriating the share of private
respondent in the subject property.
Prescinding from these premises, petitioner's reliance in the case
of Tan vs. Court of Appeals is misplaced.
In Tan, the disputed property was mortgaged by spouses Tan Tiong
Tick and Tan Ong Hun to China Bank. Tan Tiong Tick died. He was
survived by his widow and six children, including D. Annie Tan.
Meanwhile, China Bank foreclosed the mortgage. It was the highest
bidder at the public auction. Thereafter, the heirs of Tan Tiong Tick
sought to nullify the real estate mortgage and the foreclosure sale
before the defunct CFI of Manila. The widow, Tan Ong Hun, died.
The one-year redemption period lapsed on July 6, 1973, but the
heirs of the spouses Tan failed to redeem the property. China Bank
then consolidated its ownership over the disputed property and a
new title was issued in its name. In the meantime, a compromise
agreement was forged between China Bank and the Tan heirs. The
Bank allowed the heirs to repurchase the property on or before
August 31, 1974, otherwise, it would dispose of the property to
another party. Within the agreed period, or on August 30, 1974,
only petitioner D. Annie Tan repurchased the entire property using
her own funds. The bank, however, insisted that the repurchase be
made for or in behalf of the other heirs as well. Left without any
choice, D. Annie Tan filed an action in court, asserting her exclusive
ownership over the property on the ground that the co-ownership
between her and her brothers and sisters had already been
extinguished. We sustained her contention and ruled:
The first question which arises is the correctness of the assumption
that there was a co-ownership among the children of Tan Tiong Tick
and Tan Ong Hun when the petitioner purchased and property.
Since the lot and its improvements were mortgaged by the deceased
parents, there can be no question that a co-ownership existed
amount the heirs during the period given by law to redeem the
foreclosed property. Redemption by one during this period would
have inured to the benefit of all . . .
The records show, however, that when petitioner purchased the
disputed property on August 30, 1974, any co-ownership among the
brothers and sisters no longer existed. The period to redeem had
expired more than one year earlier, on July 6, 1973. The respondent
China Bank consolidated its ownership and a new title was issued in
the bank's name. When the heirs allowed the one year period to
expire without redeeming their parent's former property and
permitted the consolidation of ownership and the issuance of a new
title, the co-ownership was extinguished. The challenged ruling of
the respondent court is, therefore, based on erroneous premises.
Under Section 63-B of Presidential Decree No. 1529, the Property
Registration Decree, in case of non-redemption, the purchaser at
the foreclosure sale, meaning the respondent Bank in case of non-
redemption, the purchaser at the foreclosure sale, meaning the
respondent Bank in this case, is entitled to a new certificate of title
in his name after filing the necessary papers with the Register of
Deeds. (Spouses Teofisto and Eulalia Verceles v. Court of First
Instance of Rizal, et al., G.R. No. 62219, February 28, 1989). It
becomes a ministerial duty to place the buyer in possession of the
property he now owns. (Banco Filipino v. Intermediate Appellate
court, G.R. No. 68878, 142 SCRA 44 [1986]. Ownership, therefore,
passed to China Bank and there was no more co-ownership among
the heirs.
In is thus obvious that the Tan ruling is propped on a different
factual setting and hence, is inapplicable to the case at bench.
In Tan, ". . . the heirs (i.e., the co-owners) allowed the one year
redemption period to expire without redeeming their parents' former
property and permitted the consolidation of ownership and the
issuance of a new title . . .
in favor of China Bank. By their knowing acts of omission, the heirs
in the Tan case allowed the extinction of their co-ownership. As
aforestated, private respondent did not know of the mortgage of
their co-owned property in favor of the SSS and the expiry date of
its period of redemption. In other words, private respondent did not
voluntary relinquish at any period of time her pro-indiviso share in
the subject property.
IN VIEW WHEREOF, the Decision of the respondent Court of
Appeals dated August 30, 1991 and its Resolution dated January 29,
1993, are AFFIRMED. Costs against petitioner.
SO ORDERED.
G.R. No. L-29320 September 19, 1988
FELIPE SEGURA, ANTONIA SEGURA, NICANORA SEGURA,
BERNANDINA SEGURA, ALIPIO SEGURA and MONSERRAT
SEGURA, plaintiffs-appellants,
vs.
NICOLAS SEGURA, SANTIAGO SEGURA, GAUDENCIO
SEGURA, EMILIANO AMOJIDO, MILDRED ELISON VDA. DE
JAVELOSA, ERNESTO AMOJIDO, EPIFANIA DE AMOJIDO,
IGMEDIO AMOJIDO, and THE RURAL BANK OF SANTA
BARBARA, defendants-appellees.
Robert B. Maroma for plaintiffs-appellants.
Estefano Caspe for defendants-appellees.
CRUZ, J.:
This is another distasteful case where kin is pitted against kin in a
bitter dispute over property inherited from a common ancestor who
probably would have been distressed to see her progeny quarreling
over it as if they were hostile strangers.
The land in question consists of 4,060 square meters and was
originally registered under Original Certificate of Title No. 1994 in
the Registry of Deeds of Iloilo in the name of Gertrudes Zamora. She
died intestate and without debts in 1936 and was survived by four
children, who never got around to dividing the property among
themselves. This controversy is not among the four brothers, who
are now also deceased. It is Gertrudes's grandchildren by three of
her sons (the fourth having died without issue) who are involved in
this complaint for recovery of ownership and possession of the
disputed inheritance, plus damages.
The conflict began when on April 6, 1941, three of these nine
grandchildren, namely, Nicolas, Santiago and Gaudencio Segura,
executed a deed of extrajudicial partition arrogating the entire
property to themselves alone as equal pro indiviso owners (thereby,
curiously, excluding Nicolas and Santiago's own brother and two
sisters, and Gaudencio's own sister, besides the other two co-heirs.)
This partition was not registered immediately, but only in 1946, or
five years later.
Before and after such registration, the following developments
transpired:
1. The land was sold for P50.00 to Emiliano Amojido, with
right to repurchase on or before February 15, 1942. This
right was not exercised.
2. On November 28, 1946, Amojido executed an affidavit
of consolidation of ownership and obtained TCT No.
28336, with a reservation of the rights of the other heirs
annotated therein.
3. On March 31, 1953, Amojido sold the land for P1,500.00
to Mirope Mascareias vda. de Elison, who obtained TCT
No. T-19396 in her name, which did not retain the
annotation.
 4. On May 28, 1956, the plaintiffs filed Civil Case No. 3941,
for recovery of possession and ownership of the subject
land from Nicolas, Santiago and Gaudencio Segura.
5. On February 14, 1957, Elison sold the land for
P1,000.00 to Mildred Elison vda. de Javelosa, who
obtained TCT No. 22074 in her name.
6. On January l5, 1958, Mildred sold the land for P1,500.00
to Ernesto and Igmedio Amojido, who obtained TCT No
24342 in their names.
7. On January 16,1958, Civil Case No. 3941 was dismissed
on motion of the plaintiffs' counsel.
8. On July 23, 1961, the land was mortgaged to the Rural
Bank of Sta. Barbara, which is one of the appellees
herein.
The complaint in the case at bar was filed on January 11, 1968, and
docketed as Civil Case No. 7477 in the Court of First Instance of
Iloilo. In it, the six excluded grandchildren alleged that the partition
and all subse quent transfers of the subject land were null and void
insofar as these transactions deprived them of their shares as co-
owners of the said property. The defendants moved to dismiss,
contending that the action was barred by prior judgment and that
in any event whatever rights might have pertained to the plaintiffs
had already prescribed under the Rules of Court and the Civil Code.
The plaintiffs opposed the motion. Thereafter, issues having been
joined, the trial courts issued its order of March 28, 1968, dismissing
the complaint on the ground of prescription. The motion for
reconsideration was denied in an order dated May 28, 1968, on the
further ground, as if it were an afterthought, of res judicata. The
plaintiffs then appealed to this Court and now ask that the said
orders be reversed and the complaint reinstated.
We hold at the outset that the present action is not barred by prior
judgment as the dismissal of the earlier complaint was without
prejudice to its refiling at a future date. It appears that when Civil
Case No. 3941 was called for hearing, the plaintiffs' counsel himself
moved for its dismissal on the ground that his clients had gone to
Mindanao and he did not know when they would be returning. There
is here no showing of failure to prosecute, such as an unreasonable
delay on the part of the complainants, and the appellees have not
so contended. It was clear that the plaintiffs' counsel had the
intention of reviving the case, and that must have been the
impression too of the trial judge because his order of dismissal did
not state that it was with prejudice to the refiling of the case. The
applicable rule is Rule 17, Section 2, of the Rules of Court reading
thus:
Dismissal by order of the court.-Except as provided in the preceding
section, an action shall not be dismissed at the plaintiffs instance
save upon order of the court and upon such terms and conditions as
the court deems proper. If a counterclaim has been pleaded by a
defendant prior to the service upon him of the plaintiffs motion to
dismiss, the action shall not be dismissed against the defendant's
objection unless the counterclaim can remain pending for
independent adjudication by the court. Unless otherwise specified in
the order, a dismissal under this paragraph shall be without
prejudice.
It follows that even, if, as noted by the trial court in its Order of May
28, 1968, "the same case Civil Case No. 3941 of this Court. Exh. 'A'
with the same subject matter, with the same plaintiffs, almost with
the same defendants, and the same theory, was dismissed by this
Court on January 16,1958," the present action is not barred by res
judicata.
The second ground is not as simple.
The claim of prescription is based first on the contention that under
the Rules of Court the deed of extrajudicial partition should have
been impugned within two years from the date of its execution in
1941. As the challenge in the instant case was made only in 1956,
when Civil Case No. 3941 was filed, that first case, and more so the
case at bar which was commenced in 1968, should be and were
properly dismissed for tardiness under Rule 74, Section 4, of the
Rules of Court.
This section provides in gist that a person who has been deprived of
his lawful participation in the estate of the decedent, whether as heir
or as creditor, must assert his claim within two years after the
extrajudicial or summary settlement of such estate under Sections
1 and 2 respectively of the same Rule 74. Thereafter, he will be
precluded from doing so as the right will have prescribed.
It is clear that Section 1 of Rule 74 does not apply to the partition
in question which was null and void as far as the plaintiffs were
concerned. The rule covers only valid partitions. The partition in the
present case was invalid because it excluded six of the nine heirs
who were entitled to equal shares in the partitioned property. Under
the rule, "no extrajudicial settlement shall be binding upon any
person who has not participated therein or had no notice thereof."
As the partition was a total nullity and did not affect the excluded
heirs, it was not correct for the trial court to hold that their right to
challenge the partition had prescribed after two years from its
execution in 1941.
The appellees invoke a second basis for their claim of prescription
and argue that even under the Civil Code the complaint should also
be deemed prescribed pursuant to the following provisions:
Art. 1134. Ownership and other real rights over immovable
property are acquired by ordinary prescription through
possession of ten years (1957a).
Art. 1144. The following actions must be brought within ten
years from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
It is recalled that following the execution of the deed of partition,
the owners named therein sold the entire land to Emiliano Amojido
who, after the vendors had failed to exercise their right of
repurchase, executed an affidavit of consolidation in his favor on
November 28, 1946. He subsequently obtained a transfer certificate
of title in his name, but this contained the following annotation:
This land is subject to any claim that may be presented by any heir
or any other person deprived of his lawful participation in the estate
of Gertrudes Zamora, within two years from date of the Extra-
judicial Settlement and distribution of the estate.
As a person can sell only what he owns or is authorized to sell, the
buyer can as a consequence acquire no more than what the seller
can legally transfer. The deed of partition being invalid as to the
other heirs, the vendors could dispose only of their respective shares
in the land, or one-third only of the property and not the other two-
thirds as well which did not belong to them.
Article 493 of the Civil Code reads as follows:
Each co-owner shall have the full ownership of his part and the fruits
and benefits pertaining thereto, and he may therefore alienate,
assign or mortgage it, and even substitute another person in its
enjoyment, except when personal rights are involved. But the effect
of the alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership.
Applying this provision, we have held in previous cases:
When a real property belongs pro indiviso to three persons, who
acquired it by inheritance from a common ancestor, the action for
recovery by the legal representative of one of the heirs can only
concern one-third of the property; and if the other co-owners have,
by sale to third person, disposed of one-third of the said pro
indiviso property, the plaintiff who sues for recovery is not entitled
to ask for the annulment of the sale, inasmuch as the latter merely
exercised their rights; such alienation does not affect the rights of
the heir who claims only one-third, which belongs to the other two
co-owners whose rights must be respected by the
plaintiff.
Every co-heir has the absolute ownership of his share in the
community property and may alienate, assign or mortgage the
same, except as to purely personal rights, but the effect of any such
transfer is limited to the portion which may be awarded to him upon
the partition of the property.
None of the other co-heirs who did not participate in the sale can
demand the nullification of the same, inasmuch as every co-owner
may alienate, transfer, or mortgage his share in the common thing,
and even substitute another person in the enjoyment thereof, unless
personal rights are in question; although the effect of the alienation
or mortgage, in relation to the co-owners shall be limited to the
portion that may be adjudicated to him when the community
ceased.
To repeat, the general rule is that no one can give what he does not
have nemo dat quod non habet. Hence, even if it be assumed that
Amojido had bought the land in good faith from the parties to the
extrajudicial partition, only so much of their share could be validly
acquired by him, with the rest of the property remaining under the
ownership of the six excluded co-heirs In other words, Amojido
became pro indiviso co-owner of the land with the other six heirs,
who retained title to their respective shares although he had
possession of the entire property. The portion pertaining to the
herein appellants should be deemed held by Amojido under an
implied trust for their benefit, conformably to the ruling in Bargayo
v. Camumot, thus:
In law it is understood that the co-owners or co-heir who is in
possession of an inheritance pro indivisofor himself and in
representation of his co-owners or co-heirs, if, as such owner, he
administers or takes care of the rest thereof with the obligation of
delivering it to his co-owners or co-heirs, is under the same situation
as a depository, a lessee, or a trustee.
There is no question that an action for reconveyance of property
held in implied trust is imprescriptible. However, this is true only as
long as the trustee continues to acknowledge the title of the cestui
que trust, or, otherwise stated, provided he does not repudiate such
title." The moment he does so, the prescriptive period will begin to
run and may eventually operate to divest the real owners of their
right to the property after the lapse of the applicable statutory
period. Under the provision above-quoted, that period is fixed at ten
years, whether the claim be based upon an obligation created by
law under Article 1144 or covered by Article 1134 on rights over
immovable property.
When did such prescriptive period start in the case at bar?
It is noted that when Amojido secured the registration of the land in
his name following the deed of sale executed in his favor by the
parties to the extrajudicial partition, his certificate of title carried an
express reservation of whatever rights might pertain to the other
heirs. This annotation constituted an acknowledgement of the
possibility that a portion of the land might not belong to him and the
commitment that he would be holding such part as impliedly
conveyed to him in trust by and for its true owners. However, when
Amojido himself sold the land to Mirope Mascareas vda. de Elison
on March 13, 1953, the transfer certificate of title issued in her name
no longer carried the said encumbrance. By the deletion of this
annotation, Mirope, as the new transferee, repudiated as of the date
of registration the claim of the other heirs to their shares in the
property. From then on her assertion of ownership over the whole
land became adverse even as against the appellants herein. And as
the certificate of title was notice to the whole world of her exclusive
title to the land, such rejection was binding on the said heirs and
started as against them the period of prescription.
The record does not show when TCT No. T-19396 in the name of
Mirope Mascareas vda. de Elison was issued, but it can be
conjectured that this was done before February 14, 1957, when she
sold the land to Mildred Elison vda. de Javelosa. On the assumption
that the land was registered in the name of Mirope in 1953 following
her purchase without acknowledgement of the co-heirs' rights, the
10-year prescriptive period would have started from that year.
Suspended on May 28, 1956, when the first complaint was filed, it
began running again on February 16, 1958, 30 days after it was
dismissed, and was completed after seven more years in 1965, two
years before the second complaint was filed in 1968. Hence, that
complaint was barred by prescription, as correctly held by the trial
court, although the different starting point it used, erroneously, was
1941, date of the extrajudicial partition.
The unavoidable consequence of all this is that whatever claims the
co-heirs could have validly asserted before can no longer be invoked
by them at this time. They have let the time inexorably pass while
they were slumbering on their rights, and now it is too late.
WHEREFORE, the appeal is DISMISSED, with costs against the
appellants.
It is SO ORDERED.
 [G.R. No. 108228. February 1, 2001]
SPOUSES MANUEL and SALVACION DEL CAMPO, petitioners,
vs. HON. COURT OF APPEALS and HEIRS OF JOSE
REGALADO, SR., respondents.
DECISION
QUISUMBING, J.:
This is a petition for review on certiorari of a decision of the Court
of Appeals which affirmed the judgment of the Regional Trial Court
of Roxas City, Branch 15 in Civil Case No. V-5369, ordering the
dismissal of the action for repartition, resurvey and reconveyance
filed by petitioners.
Pure questions of law are raised in this appeal as the following
factual antecedents are undisputed:
Salome, Consorcia, Alfredo, Maria, Rosalia, Jose, Quirico and Julita,
all surnamed Bornales, were the original co-owners of Lot 162 of the
Cadastral Survey of Pontevedra, Capiz under Original Certificate of
Title No. 18047. As appearing therein, the lot, which consisted of a
total area of 27,179 square meters was divided in aliquot shares
among the eight (8) co-owners as follows:
Salome Bornales 4/16
Consorcia Bornales 4/16
Alfredo Bornales 2/16
Maria Bornales 2/16
Jose Bornales 1/16
Quirico Bornales 1/16
Rosalia Bornales 1/16
Julita Bornales 1/16
On July 14, 1940, Salome sold part of her 4/16 share in Lot 162
for P200.00 to Soledad Daynolo. In the Deed of Absolute Sale signed
by Salome and two other co-owners, Consorcia and Alfredo, the
portion of Lot 162 sold to Soledad was described as having more or
less the following measurements:
63-1/2 meters from point 9 to 10, 35 meters from point 10 to point
11, 30 meters from point 11 to a certain point parallel to a line drawn
from points 9 to "10; and then from this Certain Point to point 9 and
as shown in the accompanying sketch, and made an integral part of
this deed, to SOLEDAD DAYNOLO, her heirs and assigns.
Thereafter, Soledad Daynolo immediately took possession of the
land described above and built a house thereon. A few years later,
Soledad and her husband, Simplicio Distajo, mortgaged the subject
portion of Lot 162 as security for a P400.00 debt to Jose Regalado,
Sr. This transaction was evidenced by a Deed of Mortgage dated May
1, 1947.
On April 14, 1948, three of the eight co-owners of Lot 162,
specifically, Salome, Consorcia and Alfredo, sold 24,993 square
meters of said lot to Jose Regalado, Sr.
On May 4, 1951, Simplicio Distajo, heir of Soledad Daynolo who had
since died, paid the mortgage debt and redeemed the mortgaged
portion of Lot 162 from Jose Regalado, Sr. The latter, in turn,
executed a Deed of Discharge of Mortgage in favor of Soledads
heirs, namely: Simplicio Distajo, Rafael Distajo and Teresita Distajo-
Regalado. On same date, the said heirs sold the redeemed portion
of Lot 162 for P1,500.00 to herein petitioners, the spouses Manuel
Del Campo and Salvacion Quiachon.
Meanwhile, Jose Regalado, Sr. caused the reconstitution of Original
Certificate of Title No. 18047. The reconstituted OCT No. RO-4541
initially reflected the shares of the original co-owners in Lot
162. However, title was transferred later to Jose Regalado, Sr. who
subdivided the entire property into smaller lots, each covered by a
respective title in his name. One of these small lots is Lot No. 162-
C-6 with an area of 11,732 square meters which was registered on
February 24, 1977 under TCT No. 14566.
In 1987, petitioners Manuel and Salvacion del Campo brought this
complaint for repartition, resurvey and reconveyance against the
heirs of the now deceased Jose Regalado, Sr. Petitioners claimed
that they owned an area of 1,544 square meters located within Lot
162-C-6 which was erroneously included in TCT No. 14566 in the
name of Regalado. Petitioners alleged that they occupied the
disputed area as residential dwelling ever since they purchased the
property from the Distajos way back in 1951. They also declared the
land for taxation purposes and paid the corresponding taxes.
On April 1, 1987, summons were served on Regalados widow,
Josefina Buenvenida, and two of her children, Rosemarie and
Antonio. Josefina and Rosemarie were declared in default on May
10, 1989 because only Antonio filed an answer to the complaint.
During trial, petitioners presented the Deed of Absolute Sale
executed between Soledad Daynolo and Salome Bornales as well as
the Deed of Mortgage and Deed of Discharge signed by Jose
Regalado, Sr. The Deed of Absolute Sale showing the purchase by
the Del Campos of the property from the Distajos was likewise given
in evidence.
Despite the filing of an answer, Antonio failed to present any
evidence to refute the claim of petitioners. Thus, after considering
Antonio to have waived his opportunity to present evidence, the trial
court deemed the case submitted for decision.
On November 20, 1990, the trial court rendered judgment
dismissing the complaint. It held that while Salome could alienate
her pro-indiviso share in Lot 162, she could not validly sell an
undivided part thereof by metes and bounds to Soledad, from whom
petitioners derived their title. The trial court also reasoned that
petitioners could not have a better right to the property even if they
were in physical possession of the same and declared the property
for taxation purposes, because mere possession cannot defeat the
right of the Regalados who had a Torrens title over the land.
On appeal, the Court of Appeals affirmed the trial courts judgment,
with no pronouncement as to costs.
Petitioners now seek relief from this Court and maintain that:
I.
THE FACT THAT THE SALE OF THE SUBJECT PORTION CONSTITUTES
A SALE OF A CONCRETE OR DEFINITE PORTION OF LAND OWNED
IN COMMON DOES NOT ABSOLUTELY DEPRIVE HEREIN
PETITIONERS OF ANY RIGHT OR TITLE THERETO;
II.
IN ANY EVENT, HEREIN PRIVATE RESPONDENTS ARE ALL ESTOPPED
FROM DENYING THE RIGHT AND TITLE OF HEREIN PETITIONERS.
In resolving petitioners appeal, we must answer the following
questions: Would the sale by a co-owner of a physical portion of an
undivided property held in common be valid? Is respondent
estopped from denying petitioners right and title over the disputed
area? Under the facts and circumstances duly established by the
evidence, are petitioners entitled to repartition, resurvey and
reconveyance of the property in question?
On the first issue, it seems plain to us that the trial court concluded
that petitioners could not have acquired ownership of the subject
land which originally formed part of Lot 162, on the ground that their
alleged right springs from a void sale transaction between Salome
and Soledad. The mere fact that Salome purportedly transferred a
definite portion of the co-owned lot by metes and bounds to
Soledad, however, does not per se render the sale a nullity. This
much is evident under Article 493 of the Civil Code and pertinent
jurisprudence on the matter. More particularly in Lopez vs. Vda. De
Cuaycong, et.al. which we find relevant, the Court, speaking
through Mr. Justice Bocobo, held that:
The fact that the agreement in question purported to sell a concrete
portion of the hacienda does not render the sale void, for it is a well-
established principle that the binding force of a contract must be
recognized as far as it is legally possible to do so. Quando res non
valet ut ago, valeat quantum valere potest. (When a thing is of no
force as I do it, it shall have as much force as it can have.)
Applying this principle to the instant case, there can be no doubt
that the transaction entered into by Salome and Soledad could be
legally recognized in its entirety since the object of the sale did not
even exceed the ideal shares held by the former in the co-
ownership. As a matter of fact, the deed of sale executed between
the parties expressly stipulated that the portion of Lot 162 sold to
Soledad would be taken from Salomes 4/16 undivided interest in
said lot, which the latter could validly transfer in whole or in part
even without the consent of the other co-owners. Salomes right to
sell part of her undivided interest in the co-owned property is
absolute in accordance with the well-settled doctrine that a co-
owner has full ownership of his pro-indiviso share and has the right
to alienate, assign or mortgage it, and substitute another person in
its enjoyment. Since Salomes clear intention was to sell merely part
of her aliquot share in Lot 162, in our view no valid objection can be
made against it and the sale can be given effect to the full extent.
We are not unaware of the principle that a co-owner cannot rightfully
dispose of a particular portion of a co-owned property prior to
partition among all the co-owners. However, this should not signify
that the vendee does not acquire anything at all in case a physically
segregated area of the co-owned lot is in fact sold to him. Since the
co-owner/vendors undivided interest could properly be the object of
the contract of sale between the parties, what the vendee obtains
by virtue of such a sale are the same rights as the vendor had as
co-owner, in an ideal share equivalent to the consideration given
under their transaction. In other words, the vendee steps into the
shoes of the vendor as co-owner and acquires a proportionate
abstract share in the property held in common.
Resultantly, Soledad became a co-owner of Lot 162 as of the year
1940 when the sale was made in her favor. It follows that Salome,
Consorcia and Alfredo could not have sold the entire Lot 162 to Jose
Regalado, Sr. on April 14, 1948 because at that time, the ideal
shares held by the three co-owners/vendors were equivalent to only
10/16 of the undivided property less the aliquot share previously
sold by Salome to Soledad. Based on the principle that no one can
give what he does not have, Salome, Consorcia and Alfredo could
not legally sell the shares pertaining to Soledad since a co-owner
cannot alienate more than his share in the co-ownership. We have
ruled many times that even if a co-owner sells the whole property
as his, the sale will affect only his own share but not those of the
other co-owners who did not consent to the sale. Since a co-owner
is entitled to sell his undivided share, a sale of the entire property
by one co-owner will only transfer the rights of said co-owner to the
buyer, thereby making the buyer a co-owner of the property.
In this case, Regalado merely became a new co-owner of Lot 162 to
the extent of the shares which Salome, Consorcia and Alfredo could
validly convey. Soledad retained her rights as co-owner and could
validly transfer her share to petitioners in 1951. The logical effect of
the second disposition is to substitute petitioners in the rights of
Soledad as co-owner of the land. Needless to say, these rights are
preserved notwithstanding the issuance of TCT No. 14566 in
Regalados name in 1977.
Be that as it may, we find that the area subject matter of this
petition had already been effectively segregated from the mother lot
even before title was issued in favor of Regalado. It must be noted
that 26 years had lapsed from the time petitioners bought and took
possession of the property in 1951 until Regalado procured the
issuance of TCT No. 14566. Additionally, the intervening years
between the date of petitioners purchase of the property and 1987
when petitioners filed the instant complaint, comprise all of 36
years. However, at no instance during this time did respondents or
Regalado, for that matter, question petitioners right over the land
in dispute. In the case of Vda. de Cabrera vs. Court of Appeals, we
had occasion to hold that where the transferees of an undivided
portion of the land allowed a co-owner of the property to occupy a
definite portion thereof and had not disturbed the same for a period
too long to be ignored, the possessor is in a better condition or right
than said transferees. (Potior est condition possidentis). Such
undisturbed possession had the effect of a partial partition of the co-
owned property which entitles the possessor to the definite portion
which he occupies. Conformably, petitioners are entitled to the
disputed land, having enjoyed uninterrupted possession thereof for
a total of 49 years up to the present.
The lower courts reliance on the doctrine that mere possession
cannot defeat the right of a holder of a registered Torrens title over
property is misplaced, considering that petitioners were deprived of
their dominical rights over the said lot through fraud and with
evident bad faith on the part of Regalado. Failure and intentional
omission to disclose the fact of actual physical possession by another
person during registration proceedings constitutes actual fraud.
Likewise, it is fraud to knowingly omit or conceal a fact, upon which
benefit is obtained to the prejudice of a third person. In this case,
we are convinced that Regalado knew of the fact that he did not
have a title to the entire lot and could not, therefore, have validly
registered the same in his name alone because he was aware of
petitioners possession of the subject portion as well as the sale
between Salome and Soledad.
That Regalado had notice of the fact that the disputed portion of Lot
162 was under claim of ownership by petitioners and the latters
predecessor is beyond question. Records show that the particular
area subject of this case was mortgaged by Soledad and her
husband to Jose Regalado, Sr. as early as May 1, 1947 or one year
prior to the alienation of the whole lot in favor of the latter. Regalado
never questioned the ownership of the lot given by Soledad as
security for the P400.00 debt and he must have at least known that
Soledad bought the subject portion from Salome since he could not
have reasonably accepted the lot as security for the mortgage debt
if such were not the case. By accepting the said portion of Lot 162
as security for the mortgage obligation, Regalado had in fact
recognized Soledads ownership of this definite portion of Lot 162.
Regalado could not have been ignorant of the fact that the disputed
portion is being claimed by Soledad and subsequently, by
petitioners, since Regalado even executed a Release of Mortgage on
May 4, 1951, three years after the entire property was supposedly
sold to him. It would certainly be illogical for any mortgagee to
accept property as security, purchase the mortgaged property and,
thereafter, claim the very same property as his own while the
mortgage was still subsisting.
Consequently, respondents are estopped from asserting that they
own the subject land in view of the Deed of Mortgage and Discharge
of Mortgage executed between Regalado and petitioners
predecessor-in-interest. As petitioners correctly contend,
respondents are barred from making this assertion under the
equitable principle of estoppel by deed, whereby a party to a deed
and his privies are precluded from asserting as against the other
and his privies any right or title in derogation of the deed, or from
denying the truth of any material fact asserted in it. A perusal of the
documents evidencing the mortgage would readily reveal that
Soledad, as mortgagor, had declared herself absolute owner of the
piece of land now being litigated. This declaration of fact was
accepted by Regalado as mortgagee and accordingly, his heirs
cannot now be permitted to deny it.
Although Regalados certificate of title became indefeasible after the
lapse of one year from the date of the decree of registration, the
attendance of fraud in its issuance created an implied trust in favor
of petitioners and gave them the right to seek reconveyance of the
parcel wrongfully obtained by the former. An action for
reconveyance based on an implied trust ordinarily prescribes in ten
years. But when the right of the true and real owner is recognized,
expressly or implicitly such as when he remains undisturbed in his
possession, the said action is imprescriptible, it being in the nature
of a suit for quieting of title. Having established by clear and
convincing evidence that they are the legal owners of the litigated
portion included in TCT No. 14566, it is only proper that
reconveyance of the property be ordered in favor of petitioners. The
alleged incontrovertibility of Regalados title cannot be successfully
invoked by respondents because certificates of title merely confirm
or record title already existing and cannot be used to protect a
usurper from the true owner or be used as a shield for the
commission of fraud.
WHEREFORE, the petition is GRANTED. The assailed decision of
the Court of Appeals in CA-G.R. CV No. 30438 is REVERSED and
SET ASIDE. The parties are directed to cause a SURVEY for exact
determination of their respective portions in Lot 162-C-6. Transfer
Certificate of Title No. 14566 is declared CANCELLED and the
Register of Deeds of Capiz is ordered to ISSUE a new title in
accordance with said survey, upon finality of this decision.
Costs against respondents.
SO ORDERED.
G.R. No. 78178 April 15, 1988
DELIA BAILON-CASILAO, LUZ PAULINO-ANG, EMMA
PAULINO-YBANEZ, NILDA PAULINO-TOLENTINO, and
SABINA BAILON, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and CELESTINO
AFABLE, respondents.
Veronico E. Rubio for petitioners.
Mario G. Fortes for private-respondent.
CORTES, J.:
The fate of petitioners' claim over a parcel of land rests ultimately
on a determination of whether or not said petitioners are chargeable
with such laches as may effectively bar their present action.
The petitioners herein filed a case for recovery of property and
damages with notice of lis pendens on March 13, 1981 against the
defendant and herein private respondent, Celestino Afable. The
parcel of land involved in this case, with an area of 48,849 square
meters, is covered by Original Certificate of Title No. 1771 issued on
June 12, 1931, in the names of Rosalia, Gaudencio, Sabina Bernabe,
Nenita and Delia, all surnamed Bailon, as co-owners, each with a
1/6 share. Gaudencio and Nenita are now dead, the latter being
represented in this case by her children. Luz, Emma and Nilda.
Bernabe went to China in 1931 and had not been heard from since
then [Decision of the Court of Appeals, Rollo, p. 39].
It appears that on August 23, 1948, Rosalia Bailon and Gaudencio
Bailon sold a portion of the said land consisting of 16,283 square
meters to Donato Delgado. On May 13, 1949, Rosalia Bailon alone
sold the remainder of the land consisting of 32,566 square meters
to Ponciana V. Aresgado de Lanuza. On the same date, Lanuza
acquired from Delgado the 16,283 square meters of land which the
latter had earlier acquired from Rosalia and Gaudencio. On
December 3, 1975, John Lanuza, acting under a special power of
attorney given by his wife, Ponciana V. Aresgado de Lanuza, sold
the two parcels of land to Celestino Afable, Sr.
In all these transfers, it was stated in the deeds of sale that the land
was not registered under the provisions of Act No. 496 when the
fact is that it is. It appears that said land had been successively
declared for taxation first, in the name of Ciriaca Dellamas, mother
of the registered co-owners, then in the name of Rosalia Bailon in
1924, then in that of Donato Delgado in 1936, then in Ponciana de
Lanuza's name in 1962 and finally in the name of Celestino Afable,
Sr. in 1983.
In his answer to the complaint filed by the herein petitioners, Afable
claimed that he had acquired the land in question through
prescription and contended that the petitioners were guilty of
laches.He later filed a third-party complaint against Rosalia Bailon
for damages allegedly suffered as a result of the sale to him of the
land.
After trial, the lower court rendered a decision:
1. Finding and declaring Celestino Afable, a co-owner of the
land described in paragraph III of the complaint having
validly bought the two-sixth (2/6) respective undivided
shares of Rosalia Bailon and Gaudencio Bailon;
2. Finding and declaring the following as pro-indiviso co-
owners, having 1/6 share each, of the property described in
paragraph III of the complaint, to wit:
a. Sabina Bailon
b. Bernabe Bailon
c. Heirs of Nenita Bailon-Paulino
d. Delia Bailon-Casilao;
3. Ordering the segregation of the undivided interests in the
property in order to terminate co-ownership to be conducted
by any Geodetic Engineer selected by the parties to
delineate the specific part of each of the co-owners.
4. Ordering the defendant to restore the possession of the
plaintiffs respective shares as well as all attributes of
absolute dominion;
5. Ordering the defendant to pay the following:
a. P5,000.00 as damages;
b. P2,000.00 as attorney's fees and;
c. to pay the costs.
[Decision of the Trial Court, Rollo, p. 37-38].
On appeal, the respondent Court of Appeals affirmed the decision of
the lower court insofar as it held that prescription does not he
against plaintiffs-appellees because they are co-owners of the
original vendors. However, the appellate court declared that,
although registered property cannot be lost by prescription,
nevertheless, an action to recover it may be barred by laches, citing
the ruling in Mejia de Lucaz v. Gamponia [100 Phil. 277 (1956)].
Accordingly, it held the petitioners guilty of laches and dismissed
their complaint. Hence, this petition for review on certiorari of the
decision of the Court of Appeals.
The principal issue to be resolved in this case concerns the
applicability of the equitable doctrine of laches. Initially though, a
determination of the effect of a sale by one or more co-owners of
the entire property held in common without the consent of all the
co-owners and of the appropriate remedy of the aggrieved co-
owners is required.
The rights of a co-owner of a certain property are clearly specified
in Article 493 of the Civil Code.Thus:
Art. 493. Each co-owner shall have the full ownership of
his part and of the acts and benefits pertaining thereto,
and he may therefore alienate assign or mortgage it and
even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the
alienation or mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him
in the division upon the termination of the co-
ownership. [Emphasis supplied.]
As early as 1923, this Court has ruled that even if a co-owner sells
the whole property as his, the sale will affect only his own share but
not those of the other co-owners who did not consent to the sale
[Punsalan v. Boon Liat 44 Phil. 320 (1923)]. This is because under
the aforementioned codal provision, the sale or other disposition
affects only his undivided share and the transferee gets only what
would correspond to his grantor in the partition of the thing owned
in common.[Ramirez v. Bautista, 14 Phil. 528 (1909)].
Consequently, by virtue of the sales made by Rosalia and Gaudencio
Bailon which are valid with respect to their proportionate shares,
and the subsequent transfers which culminated in the sale to private
respondent Celestino Afable, the said Afable thereby became a co-
owner of the disputed parcel of land as correctly held by the lower
court since the sales produced the effect of substituting the buyers
in the enjoyment thereof [Mainit v. Bandoy, 14 Phil. 730 (1910)].
From the foregoing, it may be deduced that since a co-owner is
entitled to sell his undivided share, a sale of the entire property by
one co-owner without the consent of the other co-owners is not null
and void. However, only the rights of the co-owner-seller are
transferred, thereby making the buyer a co-owner of the property.
The proper action in cases like this is not for the
nullification of the sale or for the recovery of possession of
the thing owned in common from the third person who
substituted the co-owner or co-owners who alienated their
shares, but the DIVISION of the common property as if it
continued to remain in the possession of the co-owners
who possessed and administered it [Mainit v.
Bandoy, supra.]
Thus, it is now settled that the appropriate recourse of co-owners in
cases where their consent were not secured in a sale of the entire
property as well as in a sale merely of the undivided shares of some
of the co-owners is an action. for PARTITION under Rule 69 of the
Revised Rules of Court. Neither recovery of possession nor
restitution can be granted since the defendant buyers are legitimate
proprietors and possessors in joint ownership of the common
property claimed [Ramirez v. Bautista, supra].
As to the action for petition, neither prescription nor laches can be
invoked.
In the light of the attendant circumstances, defendant-appellee's
defense of prescription is a vain proposition. Pursuant to Article 494
of the Civil Code, '(n)o co-owner shall be obliged to remain in the
co-ownership. Such co-owner may demand at anytime the partition
of the thing owned in common, insofar as his share is concerned.'
[Emphasis supplied.] In Budiong v. Bondoc [G.R. No. L-27702,
September 9, 1977, 79 SCRA 241, this Court has interpreted said
provision of law to mean that the action for partition is
imprescriptible or cannot be barred by prescription. For Article 494
of the Civil Code explicitly declares: "No prescription shall lie in favor
of a co-owner or co- heir so long as he expressly or impliedly
recognizes the co-ownership."
Furthermore, the disputed parcel of land being registered under the
Torrens System, the express provision of Act No. 496 that '(n)o title
to registered land in derogation to that of the registered owner shall
be acquired by prescription or adverse possession' is squarely
applicable. Consequently, prescription will not lie in favor of Afable
as against the petitioners who remain the registered owners of the
disputed parcel of land.
It is argued however, that as to the petitioners Emma, Luz and Nelda
who are not the registered co-owners but merely represented their
deceased mother, the late Nenita Bailon, prescription
lies.Respondents bolster their argument by citing a decision of this
Court in Pasion v. Pasion [G.R.No. L-15757, May 31, 1961, 2 SCRA
486, 489] holding that "the imprescriptibility of a Torrens title can
only be invoked by the person in whose name the title is
registered" and that 'one who is not the registered owner of a parcel
of land cannot invoke imprescriptibility of action to claim the same.'
Reliance on the aforesaid Pasion case is futile. The ruling therein
applies only against transferees other than direct issues or heirs or
to complete strangers. The rational is clear:
If prescription is unavailing against the registered owner, it must be
equally unavailing against the latter's hereditary successors,
because they merely step into the shoes of the decedent by
operation of law (New Civil Code, Article 777; Old Civil Code, Article
657), the title or right undergoing no change by its
transmission mortis causa [Atus, et al., v. Nunez, et al., 97 Phil.
762, 764].
The latest pronouncement of this Court in Umbay v. Alecha [G. R.
No. 67284, March 18, 1985, 135 SCRA 427, 429], which was
promulgated subsequent to the Pasion case reiterated
the Atus doctrine. Thus:
Prescription is unavailing not only against the registered owner but
also against his hereditary successors, because they merely step
into the shoes of the decedent by operation of law and are merely
the continuation of the personality of their predecessor-in-interest.
[Barcelona v. Barcelona, 100 Phil. 251, 257].
Laches is likewise unavailing as a shield against the action of herein
petitioners.
Well-stated in this jurisdiction are the four basic elements of laches,
namely: (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 complainant seeks a remedy; (2) delay in
asserting the corporations complainant's 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 [Go
China Gun, et al. v. Co Cho et al., 96 Phil. 622 (1955)].
While the first and last elements are present in this case, the second
and third elements are missing.
The second element speaks of delay in asserting the complainant's
rights. However, the mere fact of delay is insufficient to constitute,
laches. It is required that (1) complainant must have had knowledge
of the conduct of defendant or of one under whom he claims and (2)
he must have been afforded an opportunity to institute suit. This
court has pointed out that laches is not concerned with the mere
lapse of time. Thus:
Laches has been defined as 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 the party entitled to assert it either has abandoned
it or declined to assert it. Tijam, et al., v. Sibonghanoy, G.R. No. L-
21450, April 25, 1968, 23 SCRA 29,35; Tendo v. Zamacoma, G.R.
No. L-63048, August 7, 1985, 138 SCRA 78, 90].
The doctrine of "laches" or of "stale demands" is based upon grounds
of public policy which requires for the peace of society, the
discouragement of stale claims and unlike the statute of limitations,
is not a mere question of time but is principally a question of inequity
or unfairness of permitting a right or claim to be enforced or
asserted," [Tijam v. Sibonghanoy, supra, p. 35]. [Emphasis
supplied.]
It must be noted that while there was delay in asserting petitioners'
rights, such delay was not attended with any knowledge of the sale
nor with any opportunity to bring suit. In the first place, petitioners
had no notice of the sale made by their eldest sister. It is undisputed
that the petitioner co-owners had entrusted the care and
management of the parcel of land to Rosalia Bailon who was the
oldest among them [TSN, July 27, 1983, p. 14]. In fact, Nicanor
Lee, a son of Rosalia, who was presented as a witness by the
plaintiffs-petitioners, testified on cross-examination that his mother
was only the administrator of the land as she is the eldest and her
brothers and sisters were away [TSN, October 5, 1983, p. 15].
Indeed, when Delia Bailon-Casilao left Sorsogon in 1942 after she
got married, it was only in 1983 that she returned. Sabina on the
other hand, is said to be living in Zamboanga while Bernabe who left
for China in 1931 has not been heard from since then. Consequently,
when Rosalia, from whom the private respondent derived his title,
made the disputed sales covering the entire property, the herein
petitioners were unaware thereof.
In the second place, they were not afforded an opportunity to bring
suit inasmuch as until 1981, they were kept in the dark about the
transactions entered into by their sister. It was only when Delia
Bailon-Casilao returned to Sorsogon in 1981 that she found out
about the sales and immediately, she and her co-petitioners filed
the present action for recovery of property. The appellate court thus
erred in holding that 'the petitioners did nothing to show interest in
the land." For the administration of the parcel of land was entrusted
to the oldest co-owner who was then in possession thereof precisely
because the other co-owners cannot attend to such a task as they
reside outside of Sorsogon where the land is situated. Her co-owners
also allowed her to appropriate the entire produce for herself
because it was not even enough for her daily consumption [TSN,
October 5, 1983, pp. 17-18]. And since petitioner was the one
receiving the produce, it is but natural that she was the one to take
charge of paying the real estate taxes. Now, if knowledge of the sale
by Rosalia was conveyed to the petitioners only later, they cannot
be faulted for the acts of their co-owner who failed to live up to the
trust and confidence expected of her. In view of the lack of
knowledge by the petitioners of the conduct of Rosalia in selling the
land without their consent in 1975 and the absence of any
opportunity to institute the proper action until 1981, laches may not
be asserted against the petitioners.
The third element of laches is likewise absent. There was no lack of
knowledge or notice on the part of the defendant that the
complainants would assert the right on which they base the suit. On
the contrary, private respondent is guilty of bad faith in purchasing
the property as he knew that the property was co-owned by six
persons and yet, there were only two signatories to the deeds of
sale and no special authorization to self was granted to the two
sellers by the other co-owners.
Even as the land here was misrepresented in the deeds of sale as
"unregistered," the truth was that Afable already had notice that the
land was titled in the name of six persons by virtue of the Certificate
of Title which was already in his possession even before the sale.
Such fact is apparent from his testimony before the court a quo:
COURT:
Q: From whom did you get the certificate of Title?
A: When it was mortgaged by Ponciana Aresgado.
Q: It was mortgaged to you before you bought it?
A: Yes, Your Honor. (TSN, March 5, 1984, p. 12) When
cross-examined, he stated:
Q: Mr. Witness, the original Certificate of Title was given
to you in the year 1974, was it not?
A: 1975.
Q: In 1975, you already discovered that the title was in
the name of several persons, is it not?
A: Yes, sir.
Q: When you discovered that it is in the name of several
persons, you filed a case in court for authority to cancel
the title to be transferred in your name, is it not?
A: Yes, sir.
Q: And that was denied by the Court of First Instance of
Sorsogon because there was ordinary one signatory to the
deed of sale instead of six, was it not?
A: Not one but two signatories.
[Decision of the Regional Trial Court of Sorsogon, Rollo, p. 35]
Such actual knowledge of the existence of other co-owners in whose
names the lot subject of the sale was registered should have
prompted a searching inquiry by Afable considering the well- known
rule in this jurisdiction that:
... a person dealing with a registered land has a right to rely upon
the face of the Torrens certificate of title and to dispense with the
need of inquiring further, except when the party concerned has
actual knowledge of facts and circumstances that would impel a
reasonably cautions man to make such inquiry. [Gonzales v. IAC
and Rural Bank of Pavia, Inc., G.R. No. 69622, January 29, 1988).

Moreover, the undisputed fact is that petitioners are relatives of his

wife. As a genuine gesture of good faith, he should have contacted
the petitioners who were still listed as co-owners in the certificate of
title which was already in his possession even before the sale. In
failing to exercise even a minimum degree of ordinary prudence
required by the situation, he is deemed to have bought the lot at his
own risk. Hence any prejudice or injury that may be occasioned to
him by such sale must be borne by him.

Indeed, aware of the flaws impairing his title, Afable went to the
herein petitioner Delia Bailon-Casilao, asking the latter to sign a
document obviously to cure the flaw [TSN, July 27, 1983, p.6].
Later, he even filed a petition in the Court of First Instance to
register the title in his name which was denied as aforesaid.

It may be gleaned from the foregoing examination of the facts that

Celestino Afable is not a buyer in good faith. Laches being an
equitable defense, he who invokes it must come to the court with
clean hands.

WHEREFORE, the petition for certiorari is hereby GRANTED, the

challenged decision of the Court of Appeals is SET ASIDE, and the
decision of the trial court is REINSTATED.

SO ORDERED.