G.R. No. 167232 Case Digest

G.R. No. 167232, July 31, 2009

DBT Mar-bay Construction, Inc.

vs Ricaredo Panes, etc.

Ponente: Nachura

Facts:

A parcel of land was conveyed by Regalado to DBT through a dacion en pago for services rendered. On June 24, 1992, the respondents Panes and his sons filed a complaint for quieting of title with damages and petition for injunction against Regalado and DBT.

In the complaint, Ricaredo alleged that he is the lawful owner of the land which he had declared for taxation purposes in his name. Respondents alleged that per certificate issued by the DENR the land was verified to be correct and on file.

Respondents also claimed the Ricaredo and his immediate family had been and still are in actual possession of the subject property, and their possession preceded the 2nd world war. To perfect his title, Ricaredo filed with the RTC QC.

Respondents averred that in the process of complying with the registration, it was found out that a portion of the land was with the subdivision plan of Regalado which was conveyed by Regalado to DBT.

On December 28, 1993, then defendants Spouses Jaime and Rosario Tabangcura (Spouses Tabangcura) filed their Answer with Counterclaim, claiming that they were buyers in good faith and for value when they bought a house and lot covered by TCT No. 211095 from B.C. Regalado, the latter being a subdivision developer and registered owner thereof, on June 30, 1986. When respondent Abogado Mautin entered and occupied the property, Spouses Tabangcura filed a case for Recovery of Property before the RTC, Quezon City, Branch 97 which rendered a decision in their favor.

On its part, DBT, traversing the complaint, alleged that it is the legitimate owner and occupant of the subject property pursuant to a dacion en pago executed by B.C. Regalado in the former’s favor; that respondents were not real parties-in-interests because Ricaredo was a mere claimant whose rights over the property had yet to be determined by the RTC where he filed his application  for  registration;  that the other respondents did not allege  matters  or  invoke  rights  which  would  entitle  them  to   the  relief prayed for in their complaint; that the complaint was premature; and that the action inflicted a chilling effect on the lot buyers of DBT.

RTC's Ruling:

The testimony of Ricaredo that he occupied the property since he was only 16 had not been rebutted; Ricaredo's occupation and cultivation of the land for more than 30 years vested him equitable ownership.

DBT filed a motion for reconsideration based on the grounds of prescription and laches. While this motion was still pending, judge Bacalla died.

Then an intervenor claimed that portions of the subject land was part of the estate of certain Don Jose de Ocampo.

CA's Ruling: CA reversed and set aside the RTC Orders dated November 8, 2001 and June 17, 2002 and reinstated the RTC Decision dated June 15, 2000. The CA held that the properties described and included in TCT No. 200519 are located in San Francisco del Monte, San Juan del Monte, Rizal and Cubao, Quezon City while the subject property is located in Brgy. Pasong Putik, Novaliches, Quezon City. Furthermore, the CA held that Engr. Vertudazo's testimony that there is a gap of around 1,250 meters between Lot 503 and Psu 123169 was not disproved or refuted. The CA found that Judge Juanson committed a procedural infraction when he entertained issues and admitted evidence presented by DBT in its Motion for Reconsideration which were never raised in the pleadings and proceedings prior to the rendition of the RTC Decision. The CA opined that DBT's claims of laches and prescription clearly appeared to be an afterthought. Lastly, the CA held that DBT's Motion for Reconsideration was not based on grounds enumerated in the Rules of Procedure.

Issues:

(1) Did the RTC err in upholding DBT's defenses of prescription and laches as raised in the latter's Motion for Reconsideration? (2) Which between DBT and the respondents have a better right over the subject property?

Held:

(1) Affirmative. The facts demonstrating the lapse of the prescriptive period be otherwise sufficiently and satisfactorily apparent on the record; either in the averments of the plaintiff's complaint, or otherwise established by the evidence. However, the conclusion reached by the RTC in its assailed Order was erroneous. The RTC failed to consider that the action filed before it was not simply for reconveyance but an action for quieting of title which is imprescriptible.

Therefore, laches will not apply to this case, because respondents' possession of the subject property has rendered their right to bring an action for quieting of title imprescriptible and, hence, not barred by laches. Moreover, since laches is a creation of equity, acts or conduct alleged to constitute the same must be intentional and unequivocal so as to avoid injustice. 

         Thus, respondents' claim of acquisitive prescription over the subject property is baseless. Under Article 1126 of the Civil Code, acquisitive prescription of ownership of lands registered under the Land Registration Act shall be governed by special laws. Correlatively, Act No. 496, as amended by PD No. 1529, provides that no title to registered land in derogation of that of the registered owner shall be acquired by adverse possession.  Consequently, in the instant case, proof of possession by the respondents is immaterial and inconsequential.

Note:

 - action for reconveyance can be barred by prescription. When an action for reconveyance is based on fraud, it must be filed within four (4) years from discovery of the fraud, and such discovery is deemed to have taken place from the issuance of the original certificate of title. On the other hand, an action for reconveyance based on an implied or constructive trust prescribes in ten (10) years from the date of the issuance of the original certificate of title or transfer certificate of title. The rule is that the registration of an instrument in the Office of the RD constitutes constructive notice to the whole world and therefore the discovery of the fraud is deemed to have taken place at the time of registration.