TAGAYTAY REALTY CO., INC.

, Petitioner, v. ARTURO G. GACUTAN, Respondent.

DECISION

BERSAMIN, J.:

The Court reiterates the right of the installment buyer of a subdivision lot to withhold payment of his amortizations for
the duration that the subdivision developer has not complied with its contractual undertaking to build the promised
amenities in the subdivision.

The Case

On appeal by the subdivision developer is the decision promulgated on May 29, 2003,1 whereby the Court of Appeals
(CA) upheld the ruling in favor of the installment buyer issued on December 6, 2001 by the Office of the President
(OP).2 By such ruling, the OP affirmed the July 14, 1997 decision3 rendered by the Housing and Land Use Regulatory
Board (HLURB) Board of Commissioners adopting the HLURB Arbiter's decision dated March 22, 1995.4cralawrednad

Antecedents

On September 6, 1976, the respondent entered into a contract to sell with the petitioner for the purchase on
installment of a residential lot with an area of 308 square meters situated in the Foggy Heights Subdivision then being
developed by the petitioner.5 Earlier, on June 30, 1976, the petitioner executed an express undertaking in favor of the
respondent, as follows:6
We hereby undertake to complete the development of the roads, curbs, gutters, drainage system, water and electrical
systems, as well as all the amenities to be introduced in FOGGY HEIGHTS SUBDIVISION, such as, swimming pool,
pelota court, tennis and/or basketball court, bath house, children's playground and a clubhouse within a period of two
years from 15 July 1976, on the understanding that failure on their part to complete such development within the
stipulated period shall give the VENDEE the option to suspend payment of the monthly amortization on the lot/s
he/she purchased until completion of such development without incurring penalty interest.

It is clearly understood, however, that the period or periods during which we cannot pursue said development by
reason of any act of God, any act or event constituting force majeure or fortuitous event, or any restriction, regulation,
or prohibition by the government or any of its branches or instrumentalities, shall suspend the running of said 2-year
period and the running thereof shall resume upon the cessation of the cause of the stoppage or suspension of said
development.
In his letter dated November 12, 1979,7 the respondent notified the petitioner that he was suspending his
amortizations because the amenities had not been constructed in accordance with the undertaking. Despite receipt of
the respondent's other communications requesting updates on the progress of the construction of the amenities so
that he could resume his amortization,8 the petitioner did not reply. Instead, on June 10, 1985, the petitioner sent to
him a statement of account demanding the balance of the price, plus interest and penalty.9 He refused to pay the
interest and penalty.

On October 4, 1990, the respondent sued the petitioner for specific performance in the HLURB, praying that the
petitioner be ordered to accept his payment of the balance of the contract without interest and penalty, and to deliver
to him the title of the property.10cralawrednad

In its answer,11 the petitioner sought to be excused from performing its obligations under the contract, invoking Article
1267 of the Civil Code as its basis. It contended that the depreciation of the Philippine Peso since the time of the
execution of the contract, the increase in the cost of labor and construction materials, and the increase in the value of
the lot in question were valid justifications for its release from the obligation to construct the amenities.

In its positiOn paper,12 the petitiOner stated that it had purposely suspended the construction of the amenities which
would have deteriorated at any rate because its lot buyers had not constructed their houses in the subdivision.

On March 22, 1995, the HLURB Arbiter ruled m favor of the respondent,13 to wit:cralawlawlibrary
WHEREFORE, premises considered, respondents are hereby ordered to accept the payment of the balance of the
contract price in the amount of Eight Thousand Five Hundred Eighty Seven and 80/100 Pesos (P8,587.80) without
regular and penalty interest and, thereafter, to execute and deliver to complainant the absolute deed of sale covering
the sale of property subj,ct of this complaint, together with the valid title over the said lot.14
The petitioner appealed, but the HLURB Board of Commissioners affirmed the ruling of the HLURB Arbiter on July 14,
1997.15 Upon the denial of its motion for reconsideration, the petitioner appealed to the OP.16cralawrednad

On December 6, 2001, the OP upheld the decision of the HLURB Board of Commissioners.17 The OP later denied the
1
petitioner's motion for reconsideration.18cralawrednad

On appeal, the CA affirmed the OP through the assailed decision promulgated on May 29,
2003,19 disposing:cralawlawlibrary
WHEREFORE, premises considered and finding no reversible error in the challenged Decision and Order dated
December 6, 2001, and July 1, 2002, respectively, of the Office of the President in OP Case No. 98-C-8261 said
Decision and Order are AFFIRMED and UPHELD, and the petition is DISMISSED for lack of merit.

SO ORDERED.20
The CA denied the petitioner's motion for reconsideration.21cralawrednad

Issues

In this appeal by petition for review on certiorari, the petitioner contends that the CA erred in affirming the incorrect
findings of the OP in a way probably not in accord with law; and in declaring that the respondent was not guilty of
laches.

The petitioner submits that the CA, by observing that the petitioner did not fulfill its obligation to finish the subdivision
project and that it had itself admitted not having finished the project, did not consider that it must be discharged
because extraordinary and unforeseeable circumstances had rendered its duty to perform its obligation so onerous
that to insist on the performance would have resulted in its economic ruin; that the Court should consider the practical
circumstances surrounding the construction of the luxurious amenities of the project; that the luxurious amenities of
the project would only be exposed to the elements, resulting in wastage and loss of resources, because none of the
lot buyers had constructed any house in the subdivision; that delaying the construction for that reason was reasonable
on its part considering that no one would have benefited from the amenities anyway, and was also a sound business
practice because the construction would be at great cost to it as the developer; that another justification for the non-
construction was its having suffered extreme economic hardships during the political and economic turmoil of the
1980s that the parties did not foresee at the time they entered into their contract; that under Article 1267 of the Civil
Code, equity demanded a certain economic equilibrium between the prestation and the counter-prestation, and did not
permit the unlimited impoverishment of one party for the benefit of the other by the excessive rigidity of the principle of
the obligatory force of contracts; that as the debtor, it should be partially excused or altogether released from its
obligations due to the extraordinary obstacles to the prestation, which could be overcome only by a sacrifice that
would be absolutely disproportionate, or with very grave risks, or by violating some important duties; and that the CA
thereby erred in closing its eyes to the realities, and in opting not to apply the principles of equity in favor of applying
the terms of the agreement even if doing so would cause the economic ruin of one of the parties.

The petitioner further submits that the CA erred in declaring that it was apparent that there was no "unreasonable
failure" on the part of the respondent because he had made timely written demands on November 12, 1979, February
11, 1983, March 20, 1984, June 24, 1985 and November 16, 1988. It urges that the CA's error consisted in its
confusing laches as the failure to assert a right, notwithstanding that jurisprudence has considered laches to be the
unreasonable failure to assert a claim that, by exercising due diligence, could or should be done earlier; that laches
was not, in legal significance, mere delay, but a delay that worked a disadvantage to another; that the letters of the
respondent could hardly be construed as motivated by prudence and good faith; that the economy had worsened
between 1979 and 1988, and such worsening became a factor that raised the cost of real estate development by
leaps and bounds; and that the respondent, whose actuations smacked of bad faith and opportunism at its expense,
had then appeared out of nowhere to seize the opportunity presented by the real estate boom of the early 1990s,
despite having been silent and having failed to act for a long time, evincing his belief of not having any right at all.

In his comment, the respondent asserts that the submissions of the petitioner did not warrant the non-construction of
the amemt1es; that Article 1159 of the Civil Code provides that obligations arising from contracts have the force of law
between the contracting parties and should be complied with in good faith; that neither party could unilaterally and
upon his own exclusive volition escape his obligations under the contract unless for causes sufficient in law and
pronounced adequate by a competent tribunal; that correlative to Article 1159 is Article 1308 of the Civil Code which
holds that the validity or compliance of a contract cannot be left to the will of one party; that a party could not revoke or
renounce a contract without the consent of the other, nor could a party have a contract set aside on the ground that he
had made a bad bargain; that he was not liable for the interest because it was not expressly stipulated in the contract
pursuant to Article 1956 of the Civil Code; that no penalty should be imposed on him by virtue of the undertaking
clearly stating that the two-year period for the completion of the amenities would be suspended only if the
development could not be pursued "by reason of any act God, any act or event constituting force majeure or fortuitous
event; or any restriction, regulation, or prohibition by the government or any of its branches or instrumentalities;" that
the reason given by the petitioner that "the contemplated amenities could not be constructed as they would have only
been left exposed to the elements and would have come to naught on account of the fact that there are no persons
residing thereat" did not justify or excuse the non construction of the amenities; that the petitioner could not seek
refuge in Article 1267 of the Civil Code by merely alleging inflation without laying down the legal and factual basis to
2
justify the release from its obligation; that his written extrajudicial demands negated the defense of laches; that he did
not fail to assert his right, or abandon it; and that his written extrajudicial demands wiped out the period that had
already lapsed and started the prescriptive period anew.

In short, was the petitioner released from its obligation to construct the amenities in the Foggy Heights Subdivision?

Ruling of the Court

The appeal is partly meritorious.

1.

Petitioner was not relieved from its statutory and contractual obligations to complete the amenities

The arguments of the petitioner to be released from its obligation to construct the amenities lack persuasion.

To start with, the law is not on the side of the petitioner.

Under Section 20 of Presidential Decree No. 957, all developers, including the petitioner, are mandated to complete
their subdivision projects, including the amenities, within one year from the issuance of their licenses. The provision
reads:cralawlawlibrary
Section 20. Time of Completion. - Every owner or developer shall construct and provide the facilities, improvements,
infrastructures and other forms of development, including water supply and lighting facilities, which are offered and
indicated in the approved subdivision or condominium plans, brochures, prospectus, printed matters, letters or in any
form of advertisement, within one year from the date of the issuance of the license for the subdivision or condominium
project or such other period of time as maybe fixed by the Authority.
Pursuant to Section 30 of Presidential Decree No. 957,22 the amenities, once constructed, are to be maintained by the
developer like the petitioner until a homeowners' association has been organized to manage the amenities.

There is no question that the petitioner did not comply with its legal obligation to complete the construction of the
subdivision project, including the amenities, within one year from the issuance of the license. Instead, it unilaterally
opted to suspend the construction of the amenities to avoid incurring maintenance expenses. In so opting, it was not
driven by any extremely difficult situation that would place it at any disadvantage, but by its desire to benefit from cost
savings. Such cost-saving strategy dissuaded the lot buyers from constructing their houses in the subdivision, and
from residing therein.

Considering that the petitioner's unilateral suspension of the construction of the amenities was intended to save itself
from costs, its plea for relief from its contractual obligations was properly rejected because it would thereby gain a
position of advantage at the expense of the lot owners like the respondent. Its invocation of Article 1267 of the Civil
Code, which provides that "(w)hen the service has become so difficult as to be manifestly beyond the contemplation of
the parties, the obligor may also be released therefrom in whole or in part," was factually unfounded. For Article 1267
to apply, the following conditions should concur, namely: (a) the event or change in circumstances could not have
been foreseen at the time of the execution of the contract; (b) it makes the performance of the contract extremely
difficult but not impossible; (c) it must not be due to the act of any of the parties; and (d) the contract is for a future
prestation.23 The requisites did not concur herein because the difficulty of performance under Article 1267 of the Civil
Code should be such that one party would be placed at a disadvantage by the unforeseen event.24 Mere
inconvenience, or unexepected impediments, or increased expenses did not suffice to relieve the debtor from a bad
bargain.25cralawredcralawrednad

And, secondly, the unilateral suspension of the construction had preceded the worsening of economic conditions in
1983; hence, the latter could not reasonably justify the petitioner's plea for release from its statutory and contractual
obligations to its lot buyers, particularly the respondent. Besides, the petitioner had the legal obligation to complete the
amenities within one year from the issuance of the license (under Section 20 of Presidential Decree No. 957), or within
two years from July 15, 1976 (under the express undertaking of the petitioner). Hence, it should have complied with its
obligation by July 15, 1978 at the latest, long before the worsening of the economy in 1983.

2.

Respondent as instalment buyer should pay the annual interest but not the penalty

The respondent insists that his unpaid obligation was only the balance of the contract price amounting to
P8,587.80.26 He declines to pay the interest and the penalty on the ground that the petitioner had not constructed the
amenities as promised under the undertaking.

3
The Court holds that the respondent was liable for the stipulated annual interest of 12% but not the penalty.

Paragraph 2.b, first sentence, of the contract to sell stipulated the 12% annual interest, as follows:cralawlawlibrary
xxxx

2.) The VENDEE/S hereby agree/s to pay the purchase price of TWENTY SEVEN THOUSAND SEVEN HUNDRED
TWENTY ONLY PESOS (P27,720.00), Philippine Currency, at the office of the VENDOR at Makati, Rizal, without
necessity of demand or the services of a collector in the following manner:ChanRoblesvirtualLawlibrary

a.) As downpayment, the amount of FOUR THOUSAND ONE HUNDRED FIFTY EIGHT ONLY PESOS (P4,158.00)
upon the execution of the contract.

b.) The balance of TWENTY THREE THOUSAND FIVE HUNDRED SIXTY TWO ONLY PESOS (P23,562.00) in
eighty four (84) consecutive monthly installments of FOUR HUNDRED FIFTEEN & 95/100 PESOS (P415.95) each
installment, including interest at the rate of twelve (12%) percent per annum on all outstanding balances, the
first of such monthly installment to be paid on or before the 6th day of each month, beginning October, 1976. It
is understood that unpaid installments or installments in arrears shall earn a penalty interest of one (1%) percent per
month until fully paid.27 (Bold underscoring supplied for emphasis of the relevant portion)

xxxx
Accordingly, the parties agreed to an 84-month or seven-year term of installment on the net contract price of
P23,562.00 at the monthly rate of P415.95, the monthly rate being inclusive of the 12% interest per annum. Such
monthly installment of P415.95 included the principal and the annual interest, the latter being legally termed the
amortization interest. The annual interest was designed to compensate the petitioner for waiting seven years before
receiving the total principal amount. As such, the total cost of the lot purchased by the respondent for the seven-year
term would be P39,097.80, which amount would be inclusive of the contract price of the lot and the amortization
interest.28cralawrednad

The imposition of the annual or amortization interest on the price for the purchase of a lot on installment was valid and
enforceable. As the Court has explained in Relucio v. Brillante-Garfin:29
x x x The contract price of P10,800.00 may thus be seen to be the cash price of the subdivision lots, that is, the
amount payable if the price of the lots were to be paid in cash and in full at the execution of the contract; it is not the
amount that the vendor will have received in the aggregate after fifteen (15) years if the vendee shall have religiously
paid the monthly installments. The installment price, upon the other hand, of the subdivision lots-the sum total of the
monthly installments (i.e., P16,101.00) typically, as in the instant case, has an interest component which compensates
the vendor for waiting fifteen (15) years before receiving the total principal amount of P10,600.00. Economically or
financially, P10,600.00 delivered in full today is simply worth much more than a long series of small payments
totalling, after fifteen (15) years, P10,600.00. For the vendor, upon receiving the full cash price, could have deposited
that amount in a bank, for instance, and earned interest income which at six percent (6%) per year and for fifteen (15)
years, would precisely total P5,501.00 (the difference between the installment price of P16,101.00 and the cash price
of P10,600.00) To suppose, as private respondent argues, that mere prompt payment of the monthly installments as
they fell due would obviate application of the interest charge of six percent (6%) per annum, is to ignore that simple
economic fact. That economic fact is, of course, recognized by law, which authorizes the payment of interest when
contractually stipulated for by the parties or when implied in recognized commercial custom or usage.

Vendor and vendee are legally free to stipulate for the payment of either the cash price of a subdivision lot or its
installment price. Should the vendee opt to purchase a subdivision lot via the installment payment system, he is in
effect paying interest on the cash price, whether the fact and rate of such interest payment is disclosed in the contract
or not. The contract for the purchase and sale of a piece of land on the installment payment system in the case at bar
is not only quite lawful; it also reflects a very wide spread usage or custom in our present day commercial life.30
In view of the foregoing, the respondent's insistence on condoning his liability for the contractually-stipulated 12%
annual amortization interest is unwarranted. The condonation will impose a harsh burden upon the petitioner, even as
it will result in the unjust enrichment of the respondent. We cannot ignore that the former has waited for a very long
period of time before it would be able to use the proceeds of the lot sold to the respondent.

The 1% monthly penalty sought to be charged on the arrears for failure to pay the amortizations on time until the
arrears would be fully paid was also stipulated in paragraph 2.b, second sentence, of the contract to sell, supra. But
such stipulation could not be enforced against the respondent because the petitioner waived the penalty should the
subdivision development not be completed by July 15, 1978. The waiver should stand considering that the suspension
of the amortization payment in 1979 was excusable on account of the failure to construct the amenities by July 15,
1978, and considering further that the petitioner did not contest the suspension of payment of the monthly
amortization.31cralawrednad

4
Under Tamayo v. Huang,32 the buyer has the option to demand the reimbursement of the total amounts paid, or to
await the further development of the subdivision; when the buyer opts for the latter alternative, he may suspend the
payment of his installments until the time when the developer has fulfilled its obligation to him; should the developer
persist in refusing to complete the facilities, the National Housing Authority may take over or cause the development
and completion of the subdivision at the expense of the developer.33cralawrednad

In this case, the respondent initially opted to suspend the payment of his amortizations, but then offered to complete
the payment upon realizing that the petitioner did not anymore intend to build the amenities. His payments from
October 6, 1976 to October 6, 1979 corresponded to 36 monthly amortizations totaling P14,974.20, leaving 48
installments unpaid totaling P19,965.60.34cralawrednad

3.

Claim of respondent was not barred by laches

Laches is the failure of or neglect for an unreasonable and unexplained length of time to do that which by exercising
due diligence could or should have been done earlier, or to assert a right within a reasonable time. It warrants a
presumption that the party entitled thereto has either abandoned it or declined to assert it.35cralawrednad

The CA correctly declared that laches did not set in to bar the claim of the respondent because he had made periodic
written demands upon the petitioner that indicated that he had not abandoned or declined to assert the claim. In 1979,
he manifested the intention to avail himself of his right to suspend the payment of his amortizations pursuant to the
undertaking. Since then until 1984, he had continuously requested the petitioner for updates on the progress of the
construction of the amenities so that he could resume his amortizations. The petitioner did not respond to his
requests. His efforts to have the petitioner construct the amenities so that he would already pay for the lot
demonstrated his prudence and alacrity in insisting on his rights, negating any hint of bad faith or of lack of diligence
on his part.

WHEREFORE, the Court AFFIRMS the judgment promulgated on May 29, 2003 subject to the MODIFICATIONS, as
follows: (1) the respondent shall pay to the petitioner the amount of P19,965.60; (2) the petitioner shall execute the
deed of absolute sale covering the property, and shall deliver the property to the respondent together with the
pertinent certificate of title in accordance with the terms of their contract; and (3) the petitioner shall pay the costs of
suit.

SO ORDERED.chanrobles virtuallawlibrary

Sereno, C.J., Leonardo-De Castro, Perez, and Perlas-Bernabe, JJ., concur.ChanRoblesVirtualawlibrary

5
G.R. No. 200558

CONSUELO V. PANGASINAN and ANNABELLA V. BORROMEO, Petitioners,

vs.
CRISTINA DISONGLOALMAZORA, RENILDA ALMAZORA-CASUBUAN, RODOLFO CASUBUAN, SUSANA
ALMAZORAMENDIOLA, CARLOS MENDIOLA, CECILIO ALMAZORA and NENITA ALMAZORA, Respondents.

DECISION

MENDOZA, J.:

The present case demonstrates the legal principle that the law aids the vigilant, not those who slumber on their
rights. Vigilantibus, sed non dormientibus Jura subverniunt.

This is a petition for review on certiorari seeking to reverse and set aside the July 28, 2011 Decision1 and the
February 3, 2012 Resolution2 of the Court of Appeals (CA),  in CA-G.R. CV 84529, which affirmed the June 29, 2004
Decision3 of the Regional Trial Court, Branch 259, Parañaque City (RTC)  in Civil Case No. 96-0206, a case for
damages.

The Facts

The subject property is a parcel of land with an area of 572 square meters located in Brgy. Sto. Domingo, Biñan,
Laguna. It was registered in the name of Aquilina Martinez (Aquilina)  under Transfer Certificate of Title (TCT)  No. T-
18729 by the Register of Deeds of Laguna on July 29, 1939.4

After the liberation of Manila from the Japanese military occupation in 1945, Aquilina and her maternal grandmother,
Leoncia Almendral (Leoncia), learned that their house on Zabala Street, Tondo, Manila, was ruined by the war. To
rebuild their house, they borrowed money from their relative, Conrado Almazora (Conrado). Thus, their house was
reconstructed. In return, Leoncia entrusted to Contrado the owner’s duplicate copy of TCT No. T-18729 covering the
subject property in Biñan, Laguna. Consequently, Conrado and his family remained in the said property.

Following the death of Aquilina on July 19, 1949, the title of the subject property was transferred to Aurora Morales-
Vivar (Aurora), as her sole heir. Accordingly, TCT No. T-35280 was issued in the name of Aurora5 after TCT No. T-
18729 was cancelled. On February 7, 1972, Conrado passed away.

Sometime in 1994, Aurora learned from Cristina Almazora (Cristina), the widowed spouse of Conrado, that the title of
the subject property had long been transferred in the name of Conrado and that the subject property had been sold to
Fullway Development Corporation (Fullway) by the heirs of Conrado in consideration of P4,000,000.00.6

Aurora was shocked to learn that the subject property was already transferred to Conrado and sold for a meager
amount. On October 30, 1995, she sent a letter to the heirs of Conrado demanding the delivery of the payment they
received for the sale of the subject property; but it was unheeded.

On May 9, 1996, Aurora together with her husband, Arturo, filed a complaint for damages7 against Cristina and the
other heirs of Conrado (respondents) before the RTC. They contended that the owner’s duplicate copy of TCT No. T-
18729 was only given to Conrado for safekeeping. The complaint, however, admitted that the family of Conrado had
been staying on, and using, the subject property since 1912 with the permission and generosity of Aquilina and
Leoncia.8

6
Aurora asserted that, through the years, she repeatedly asked Conrado to return the owner’s copy of the title but the
latter procrastinated, giving all kinds of excuses, until he died in 1972; that thereafter, Aurora asked Cristina for the
copy of the title but the latter also ignored her request; that the subsequent sale of the subject property to Fullway was
without Aurora’s authorization, and, thus, the payment received by respondents for the sale of the subject property
should be turned over to her; and that she prayed for moral and exemplary damages.9

On June 24, 1996, respondents filed their answer with compulsory counterclaim. They countered that the subject
property was properly transferred to Conrado under TCT No. 35282, and, thereafter, in the names of the heirs of
Conrado under TCT No. T-114352. Respondents averred that the imputation of fraud on the part of Conrado in the
registration of the subject property was baseless and this assertion of fraud was not transmissible from Conrado to his
heirs, who merely acquired the property through succession.10

Respondents raised some special and affirmatives defenses, among others, that the complaint stated no cause of
action and was barred by prescription. A preliminary hearing for the said defenses was set by the RTC.11 In the
Order,12 dated May 27, 1999, the RTC ruled that the complaint stated a cause of action.

Respondents filed a petition for certiorari  13 to assail the said interlocutory order of the RTC before the CA. In its
Decision,14 dated February 24, 1999, the CA denied the same and held that the complaint stated a cause of action,
which was an action for damages arising from fraud committed by Conrado, as trustee, against Aurora, as cestui que
trust.  The CA further held that the complaint, on its face, did not show that the action had prescribed.

Meanwhile, the RTC continued the proceedings and set the case for trial on the merits. After the parties adduced their
respective pieces of evidence, the RTC required them to submit their memoranda. Only respondents filed a
memorandum.15

The RTC Ruling

In its Decision, dated June 29, 2004, the RTC dismissed the complaint. The trial court held that, after a thorough
evaluation of the records, Aurora miserably failed to prove her right to the subject property. It explained that even if
Aurora had a claim on the subject property, she was guilty of laches. For many years, Aurora slept on her right over
the questioned property and failed to exhaust all means, legal or administrative, to retrieve what was rightfully hers at
the earliest possible time.

The RTC determined that Conrado was able to transfer the title of the subject property in his name on June 17, 1965
by virtue of a document denominated as "Adjudication and Absolute Sale of a Parcel of Registered Land,"16 dated
January 9, 1949, signed by Aurora and her husband. The signatures of Aurora and her husband, affixed on the deed
of sale, were not properly controverted by her. The trial court found that her allegations of repeated pleas to Conrado
to return the copy of the title deserved scant consideration. It concluded that Aurora was not entitled to damages
because there were no clear and cogent grounds to award the same. The decretal portion of the decision reads:

WHEREFORE, premises considered, plaintiffs having failed to prove its case for damages, the same is hereby
ordered DISMISSED for lack of merit.

SO ORDERED.17

Aggrieved, Aurora appealed to the CA. On June 4, 2009, the children of Aurora, namely, Consuelo V. Pangasinan,
Lucio M. Vivar and Annabella V. Borromeo (petitioners),  filed a motion for substitution of party18 after her death on
March 26, 2008. In its Resolution,19 dated July 15, 2010, the CA granted the motion.

The CA Ruling

In the assailed Decision, dated July 28, 2011, the CA denied the appeal of petitioners. It held that it took Aurora more
than 50 years to act on Conrado’s withholding of the title covering the subject property. As early as 1945, the title was
already in the possession of Conrado. The CA ruled that petitioners were barred by laches as Aurora should have
been impervious in asserting her ownership and made judicial demands to return the title and the property.

The appellate court added that even on the aspect of prescription of actions, the case would not prosper either. It
explained that the prescriptive period to recover property obtained through fraud or mistake giving rise to an implied
trust under Article 1456 of the Civil Code was 10 years, pursuant to Article 1144. This 10-year prescriptive period
began from the time the land was registered on June 17, 1965. Accordingly, Aurora had only until June 17, 1975

7
within which to file her action. Evidently, the suit was commenced only on May 12, 1996, beyond its prescription
period. The dispositive portion of the decision states:

WHEREFORE, premises considered, the instant petition is DENIED and the Decision dated June 29, 2004 of the
Regional Trial Court of Parañaque City, Branch 259 in Civil Case No. 96-0206 is hereby AFFIRMED.

SO ORDERED.20

Petitioners moved for reconsideration, but their motion was denied by the CA in the assailed Resolution, dated
February 3, 2012.

Hence, this petition, raising the following

ISSUES

THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE DECISION OF THE LOWER COURT
DISMISSING THE COMPLAINT FOR DAMAGES FILED BY AURORA MORALESVIVAR, WHICH DECISIONS ARE
ALL CONTRARY TO LAW;

II

THE COURT OF APPEALS SERIOUSLY ERRED IN NOT RULING THAT THE ACQUISITION OF CONRADO
ALMAZORA, RESPONDENTS’ PREDECESSOR-IN-INTEREST, OF THE SUBJECT PROPERTY, IS INVALID AND
PRODUCED NO EFFECT WHATSOEVER BECAUSE NOT ALL THE ELEMENTS OF LACHES, AS TO DEPRIVE
AURORA MORALES-VIVAR OF HER OWNERSHIP, ARE PRESENT IN THE CASE AT BAR. 21

Petitioners assert that they are not guilty of laches. When Aurora was told that the subject property was already in the
name of Conrado in April 1994, she immediately filed a complaint for damages on May 2, 1996. Petitioners also claim
that prescription is not a valid defense to defeat the title of Aurora. Section 47 of Presidential Decree (P.D.) No. 1529
states that no title to registered land in derogation of the title of the registered owner shall be acquired by prescription
or adverse possession.

On September 24, 2012, respondents filed their Comment,22 arguing that petitioners’ assertions were tenuous. Aurora
slept on her rights for more than 50 years, impervious in asserting her ownership of the subject property, thereby
losing the same by laches.

On December 11, 2012, petitioners filed their Reply,23 claiming that the CA observed that respondents might have
manipulated the said title to their benefit and advantage. Respondents’ hands were unclean because of their bad faith
and misrepresentation.

The Court’s Ruling

The petition is bereft of merit.

The petition raises

questions of fact

As a general rule, the Court’s jurisdiction in a Rule 45 petition is limited to the review of pure questions of law. A
question of law arises when the doubt or difference exists as to what the law is on a certain state of facts. Negatively
put, Rule 45 does not allow the review of questions of fact. A question of fact exists when the doubt or difference
arises as to the truth or falsity of the alleged facts.24

Petitioners challenge the findings of laches, prescription and lack of bad faith by the CA. To answer these questions,
the Court must review the records to determine whether the lower courts properly appreciated the evidence in
concluding its findings. Clearly, the questions raised are factual. On this ground alone, the present petition under Rule
45 is dismissible. In the interest of substantial justice, however, the Court deems it proper to reevaluate the records.

8
Petitioners are barred by
laches

Laches is defined as the failure or neglect for an unreasonable and unexplained 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.25

The principle of laches is a creation of equity which, as such, is applied not really to penalize neglect or sleeping upon
one's right, but rather to avoid recognizing a right when to do so would result in a clearly inequitable situation.26 The
time-honored rule anchored on public policy is that relief will be denied to a litigant whose claim or demand has
become "stale," or who has acquiesced for an unreasonable length of time, or who has not been vigilant or who has
slept on his rights either by negligence, folly or inattention. In other words, public policy requires, for peace of society,
the discouragement of claims grown stale for non-assertion; thus laches is an impediment to the assertion or
enforcement of a right which has become, under the circumstances, inequitable or unfair to permit.27

The four (4) elements of laches, as first prescribed by this Court in Go Chi Gun v. Co Cho28 are as follows:

(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 for which the complaint seeks a remedy;

(2) delay in asserting the complainant’s rights, the complainant having had knowledge or notice, of the
defendant’s conduct and having been afforded an opportunity to institute a 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.29

In the case at bench, the CA correctly held that all the elements of laches were present. First,  Aurora and her family
entrusted to Conrado the owner’s duplicate of the certificate of title of the subject property in 1945. In their complaint,
petitioners even admitted that Conrado’s family had been staying in the subject property since 1912.30 Second, it took
five decades, from 1945 to 1996, before Aurora and petitioners decided to enforce their right
thereon. Third, respondents who lived all their lives in the disputed property apparently were not aware that Aurora
would one day come out and claim ownership thereon. Fourth,  there was no question that respondents would be
prejudiced in the event that the suit would be allowed to prosper.1avvphi1

The contention of petitioners that they were not in delay in claiming their rights over the subject property is specious.
For 50 years, Aurora and her heirs did not take any legal step to uphold their claim over the subject property, despite
being fully aware that Conrado and his family were occupying the same for a very long time. Even petitioner Consuelo
Vivar- Pangasinan testified that Conrado had been using the property for 30 years31 and that Aurora had never shown
her any evidence of ownership of the property.32

In their complaint, Aurora claimed that she repeatedly reminded Conrado to return the copy of the title. This, however,
is a self-serving allegation without any evidentiary substantiation. The two belated demand letters, dated October 30,
1995 and March 5, 1996, sent by Aurora’s lawyer before the institution of the present action, are the only tangible
assertions of their claim to the property.33 Indeed, not a scintilla of proof was presented by Aurora and her heirs to
establish that, for 50 years, they actively manifested to reclaim the title and possession of the subject property.

A person, endowed with properties and entitlements, but chose to lie quietly as decades passed by, watching his
property wither away, allowing innocent bystanders to pick the fruits of his unguarded trees, instead of safeguarding
his rights through the accessibly and necessary legal means, does not deserve the protection of equity. The law aids
the vigilant, not those who slumber on their rights.

The action has prescribed

On the basis of prescription of actions, the pending petition must also be denied. Petitioners argue that prescription
shall not lie against their action because a registered land under Section 47 of P.D. No. 1529 cannot be acquired
through prescription.34 The argument is patently erroneous.

9
There are two kinds of prescription provided in the Civil Code. One is acquisitive, that is, the acquisition of a right by
the lapse of time as expounded in paragraph 1, Article 1106.35 Acquisitive prescription is also known as adverse
possession and usucapcion. The other kind is extinctive prescription whereby rights and actions are lost by the lapse
of time as defined in paragraph 2, Article 1106 and Article 1139.36 Another name for extinctive prescription is litigation
of action. These two kinds of prescription should not be interchanged.37

In a plethora of cases,38 the Court has held that Section 47 of P.D. No. 1529 covers acquisitive prescription. A
registered land therein can never be acquired by adverse possession. In the case at bench, however, it was extinctive
prescription, and not acquisitive prescription, which barred the action of petitioners. As the CA correctly held, the
action must fail, not because respondents adversely occupied the property, but because petitioners failed to institute
their suit within the prescriptive period under Article 1144 of the Civil Code.

To determine the applicable period of extinctive prescription, the nature and circumstances of the case should be
considered. According to petitioners, the owner’s duplicate certificate of title was given to Conrado for safekeeping in
1945. Allegedly, Conrado employed fraud and bad faith when he drafted the Adjudication and Absolute Sale of a
Parcel of Registered Land39 on January 9, 1949, and transferred the title of the land to his name with the issuance of
TCT No. 3528240 on June 17, 1965; and because of the purported fraud committed by Conrado against petitioners, an
implied constructive trust was created by operation of law, with Conrado as trustee and Aurora as cestui que trust.

Constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent
unjust enrichment.41 Article 1456 of the Civil Code provides that a person acquiring property through fraud becomes,
by operation of law, a trustee of an implied trust for the benefit of the real owner of the property.42 It is now well-settled
that the prescriptive period to recover property obtained by fraud or mistake, giving rise to an implied trust under
Article 1456 of the Civil Code, is 10 years pursuant to Article 1144.43 The prescriptive period to enforce the
constructive trust shall be counted from the alleged fraudulent registration or date of issuance of the certificate of title
over the property.44 The ten-year prescriptive period applies only if there is an actual need to reconvey the property as
when the plaintiff is not in possession of the property.45

In this case, the ten-year prescriptive period is squarely applicable because Conrado and his family, not petitioners,
were in possession of the property. The subject property was registered in the name of Conrado on June 17, 1965,
and this should be the starting point of the ten-year period. Petitioners, thus, had until June 17, 1975 to enforce the
implied trust and assert their claim over the land. As properly held by the CA, petitioners belatedly instituted their
judicial claim over the land on May 9, 1996. Indeed, with the lapse of the prescriptive period to file an action,
petitioners could no longer seek relief from the courts.

Fraud was not proven

Granting, for the sake of argument, that the present case was not barred by laches and had not prescribed, it must still
fail on its merits. The basis of the action for damages of petitioners would be the fraud, bad faith and
misrepresentation allegedly committed by Conrado in transferring the title of the subject property to his name.
Petitioners, however, drastically failed to prove the fact of fraud with clear and convincing evidence.

Fraud must be proven by clear and convincing evidence and not merely by a preponderance thereof.46 Clear and
convincing proof is more than mere preponderance, but not to extent of such certainty as is required beyond
reasonable doubt as in criminal cases.47 The imputation of fraud in a civil case requires the presentation of clear and
convincing evidence. Mere allegations will not suffice to sustain the existence of fraud. The burden of evidence rests
on the part of the plaintiff or the party alleging fraud.48

Here, the Adjudication and Absolute Sale of a Parcel of Registered Land, which was signed by Aurora and her
husband, transferred the ownership of the subject property from Aurora to Conrado. Petitioners, however, failed to
assail the validity of such deed. As written by the RTC, petitioners could have questioned the authenticity of the
document and submitted the same to the National Bureau of Investigation for comparison of the signatures. This, they
failed to do.49

In fine, the Adjudication and Absolute Sale of a Parcel of Registered Land, being a notarized document, enjoys the
presumption of regularity. Even assuming that Conrado truly employed fraud, no proof was presented that
respondents, as heirs of Conrado, were in privy and had knowledge of the misrepresentations. In the absence of
evidence of fraud, the transfer to Conrado of the title of the subject property, and the subsequent transfer to
respondents by virtue of succession,50 must be upheld.

Even on the subject of ownership, petitioners failed to substantiate their claim. Petitioners had nothing, other than their
bare allegations, that they continuously owned the subject property. For decades, petitioners lacked the possession
10
and interest to 'recover the subject property. The trial court even noted that petitioners could not present a single tax
declaration receipt as an indicia of their ownership. Based on the foregoing, petitioners are certainly not entitled to
damages on the basis of their misplaced claim of ownership over the subject property.

WHEREFORE, the petition is DENIED. The July 28, 2011 Decision and the February 3, 2012 Resolution of the Court
of Appeals in CA-G.R. CV No. 122153 are AFFIRMED in toto.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,

vs.
PHILIPPINE NATIONAL BANK, defendant-appellees.

Office of the Solicitor General for plaintiff-appellant.

Ramon B. de los Reyes for defendant-appellee.

MAKALINTAL, J.:

From the order of the Court of First Instance of Manila dismissing the complaint upon defendant's motion, plaintiff has
taken the present appeal.

The complaint alleges, that the Armed Forces of the Philippines, one of plaintiff's instrumentalities, opened a current
account with defendant bank in July 1947; that on December 27, 1949 defendant, through negligence, paid to an
unnamed person the sum of P37,553.32, covered by two checks drawn against the said account but bearing fictitious
names as payees and forged signatures of the officers authorized to make withdrawals; that when one of said officers
noticed from the statement sent by defendant that the value of the checks had been charged against the account, he
called defendant's attention to the mistake letter dated April 15, 1950, and that in spite of repeated demands
defendant refused to refund the value of the two checks, for which reason this action was filed on November 6, 1959,
praying that defendant be sentenced to pay the amount involved to plaintiff, with costs.

Defendant moved to dismiss on the ground that the action had prescribed. The lower court sustained the motion and
dismissed the complaint by order dated November 21, 1959, but on an entirely different ground. Said order reads:

This is a case wherein the Republic of the Philippines is suing the Philippine National Bank, an entity 97% of
which stocks belongs to the Government; therefore, the plaintiff and defendant in this case are the same; the
taking of money of one to give to another is what the Spaniards say "Desnudar un santo para vestir a otro" (to
unrobe an image to clothe another); this Court sees that the presentation of this action is just a waste of the
time and will only cause unnecessary costs and expenses to the Government. It is a common practice in
commercial circles where interlocking corporations are the parties concerned for the heads of the corporations
to find and pinpoint the responsible or guilty party without going into expensive litigation among themselves.
This practice is worthy of limitation (emulation) to avoid waste of time or unnecessary expenses.

Plaintiff assigns but one error in its brief: the ruling that "plaintiff and defendant are the same" and that a suit by the
former against the latter is only a waste of time. Defendant, on its part, prays for affirmance of the order of dismissal,
not for the reason stated therein but on the ground of prescription and the additional ground that the real party in
interest is the Armed Forces and not the Republic of the Philippines.

11
We hold that the Republic of the Philippines is the proper party-plaintiff in this case. The Army is one of its
instrumentalities through which its governmental functions are exercised, specifically the preservation of the State
against any danger to its security, whether from within or from outside. These functions are compulsory and essential
to sovereignty constituent in character as distinguished from those ministrant and hence optional functions which are
undertaken only in order to advance the general interests of society. (Bacani vs. National Coconut Corporation, 53
O.G. 2798).

Defendant bank is one of those corporations and entities owned or controlled by the Government and endowed with
proprietary functions which have nothing to do with the exercise of political authority. They are governed by the
Corporation Law and/or by their individual charters; in the case of defendant, by Republic Act 1300, which took effect
on June 16, 1955, authorizing it, among other purposes, to engage in the business of general banking. Thus it has a
personality of its own and may sue and be sued as an entity entirely distinct from the Republic.

Since the statute of limitations does not run against the State and it is neither alleged nor shown that plaintiff, in
making the deposit of its funds in question with defendant, did so other than as an instrumentality of the Republic, the
plea of prescription cannot be maintained.

The order appealed from is hereby set aside and the case remanded to the lower court for further proceedings, with
costs against defendant-appellee.

Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala, Bengzon, J.P., and Zaldivar, JJ.,
concur.
Concepcion, J., took no part.

DEVELOPMENT BANK OF THE PHILIPPINES (DBP), petitioner,

vs.
THE HONORABLE MIDPAINTAO L. ADIL, Judge of the Second Branch of the Court of First Instance of Iloilo
and SPOUSES PATRICIO CONFESOR and JOVITA VILLAFUERTE, respondents.

GANCAYCO, J.:

The issue posed in this petition for review on certiorari is the validity of a promissory note which was executed in
consideration of a previous promissory note the enforcement of which had been barred by prescription.

On February 10, 1940 spouses Patricio Confesor and Jovita Villafuerte obtained an agricultural loan from the
Agricultural and Industrial Bank (AIB), now the Development of the Philippines (DBP), in the sum of P2,000.00,
Philippine Currency, as evidenced by a promissory note of said date whereby they bound themselves jointly and
severally to pay the account in ten (10) equal yearly amortizations. As the obligation remained outstanding and unpaid
even after the lapse of the aforesaid ten-year period, Confesor, who was by then a member of the Congress of the
Philippines, executed a second promissory note on April 11, 1961 expressly acknowledging said loan and promising
to pay the same on or before June 15, 1961. The new promissory note reads as follows —

I hereby promise to pay the amount covered by my promissory note on or before June 15, 1961. Upon
my failure to do so, I hereby agree to the foreclosure of my mortgage. It is understood that if I can
secure a certificate of indebtedness from the government of my back pay I will be allowed to pay the
amount out of it.

Said spouses not having paid the obligation on the specified date, the DBP filed a complaint dated September 11,
1970 in the City Court of Iloilo City against the spouses for the payment of the loan.

After trial on the merits a decision was rendered by the inferior court on December 27, 1976, the dispositive part of
which reads as follows:

WHEREFORE, premises considered, this Court renders judgment, ordering the defendants Patricio
Confesor and Jovita Villafuerte Confesor to pay the plaintiff Development Bank of the Philippines,
jointly and severally, (a) the sum of P5,760.96 plus additional daily interest of P l.04 from September
17, 1970, the date Complaint was filed, until said amount is paid; (b) the sum of P576.00 equivalent to
ten (10%) of the total claim by way of attorney's fees and incidental expenses plus interest at the legal
rate as of September 17,1970, until fully paid; and (c) the costs of the suit.

12
Defendants-spouses appealed therefrom to the Court of First Instance of Iloilo wherein in due course a decision was
rendered on April 28, 1978 reversing the appealed decision and dismissing the complaint and counter-claim with costs
against the plaintiff.

A motion for reconsideration of said decision filed by plaintiff was denied in an order of August 10, 1978. Hence this
petition wherein petitioner alleges that the decision of respondent judge is contrary to law and runs counter to
decisions of this Court when respondent judge (a) refused to recognize the law that the right to prescription may be
renounced or waived; and (b) that in signing the second promissory note respondent Patricio Confesor can bind the
conjugal partnership; or otherwise said respondent became liable in his personal capacity. The petition is impressed
with merit. The right to prescription may be waived or renounced. Article 1112 of Civil Code provides:

Art. 1112. Persons with capacity to alienate property may renounce prescription already obtained, but
not the right to prescribe in the future.

Prescription is deemed to have been tacitly renounced when the renunciation results from acts which
imply the abandonment of the right acquired.

There is no doubt that prescription has set in as to the first promissory note of February 10, 1940. However, when
respondent Confesor executed the second promissory note on April 11, 1961 whereby he promised to pay the amount
covered by the previous promissory note on or before June 15, 1961, and upon failure to do so, agreed to the
foreclosure of the mortgage, said respondent thereby effectively and expressly renounced and waived his right to the
prescription of the action covering the first promissory note.

This Court had ruled in a similar case that –

... when a debt is already barred by prescription, it cannot be enforced by the creditor. But a new
contract recognizing and assuming the prescribed debt would be valid and enforceable ... . 1

Thus, it has been held —

Where, therefore, a party acknowledges the correctness of a debt and promises to pay it after the
same has prescribed and with full knowledge of the prescription he thereby waives the benefit of
prescription. 2

This is not a mere case of acknowledgment of a debt that has prescribed but a new promise to pay the debt. The
consideration of the new promissory note is the pre-existing obligation under the first promissory note. The statutory
limitation bars the remedy but does not discharge the debt.

A new express promise to pay a debt barred ... will take the case from the operation of the statute of
limitations as this proceeds upon the ground that as a statutory limitation merely bars the remedy and
does not discharge the debt, there is something more than a mere moral obligation to support a
promise, to wit a – pre-existing debt which is a sufficient consideration for the new the new promise;
upon this sufficient consideration constitutes, in fact, a new cause of action. 3

... It is this new promise, either made in express terms or deduced from an acknowledgement as a
legal implication, which is to be regarded as reanimating the old promise, or as imparting vitality to the
remedy (which by lapse of time had become extinct) and thus enabling the creditor to recover upon
his original contract. 4

However, the court a quo  held that in signing the promissory note alone, respondent Confesor cannot thereby bind his
wife, respondent Jovita Villafuerte, citing Article 166 of the New Civil Code which provides:

Art. 166. Unless the wife has been declared a non compos mentis  or a spend thrift, or is under civil
interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real
property of the conjugal partnership without, the wife's consent. If she ay compel her to refuses
unreasonably to give her consent, the court m grant the same.

We disagree. Under Article 165 of the Civil Code, the husband is the administrator of the conjugal partnership. As
such administrator, all debts and obligations contracted by the husband for the benefit of the conjugal partnership, are
chargeable to the conjugal partnership. 5 No doubt, in this case, respondent Confesor signed the second promissory
note for the benefit of the conjugal partnership. Hence the conjugal partnership is liable for this obligation.
13
WHEREFORE, the decision subject of the petition is reversed and set aside and another decision is hereby rendered
reinstating the decision of the City Court of Iloilo City of December 27, 1976, without pronouncement as to costs in this
instance. This decision is immediately executory and no motion for extension of time to file motion for reconsideration
shall be granted.

SO ORDERED.

Narvasa and Cruz, JJ., concur.

Griño-Aquino, J., took no part.

Ramirez vs. Court of Appeals, No. L-38185, 144 SCRA 292 , September 24, 1986
Posted by Unknown at 12:41 AM Labels: 144 SCRA 292, 1986, Civil Law Review, No. L-38185, Ramirez vs. Court of
Appeals, September 24

Ramirez vs. Court of Appeals, No. L-38185, 144 SCRA 292 , September 24, 1986

G.R. No. L-38185 September 24, 1986

HILARIO RAMIREZ and VALENTINA BONIFACIO, petitioners,

vs.
HONORABLE COURT OF APPEALS, FRANCISCA MEDINA, MATILDE MARTIN, EMILIO MARTIN, DELFIN
GUINTO, TEOFILO GUINTO, PRUDENCIO GUINTO and MARGARITA GUINTO, respondents.

Castro, Makalintal, Mendoza & Associates for petitioner.

Flores, Ocampo, Dizon & Domingo Law Office for respondents.

GUTIERREZ, JR., J.:

This is an appeal from the decision of the Court of Appeals which affirmed in toto the decision of the then Court of
First instance of Rizal rendered in the petition for review of the decree of registration issued in Land Registration Case
No. N-2597, L.R.C. Record No. N-17939.

On September 15,1959, petitioners-spouses Hilario Ramirez and Valentina Bonifacio filed an application for
registration of a parcel of riceland in Pamplona, Las Pinas Rizal. After notice and publication nobody appeared to
oppose the application. An order of general default was issued and the court allowed the petitioners to present
evidence in support of their claim. Thereafter, the petitioners presented parol evidence that they acquired the land in
question by purchase from Gregorio Pascual during the early part of the American regime but the corresponding
contract of sale was lost and no copy or record of the same was available.

14
On January 30, 1960, the court ordered the issuance of the decree of registration and consequently: Original
Certificate of Title No. 2273 of the Registry of Deeds of Rizal was issued in the petitioners names.

On March 30, 1960, the private respondents Francisca Medina, Basilio Martin, Matilde Martin, Delfin Guinto, Teofilo
Guinto, Prudencio Guinto and Margarita Guinto, petitioners' nephews and nieces, filed a petition to review the decree
of registration on the ground of fraud. The private respondents based their claim to the land on the following
allegations: that they are the legal heirs of the deceased Agapita Bonifacio who died intestate on March 11, 1936; that
Valentina Bonifacio is a sister of the deceased Agapita Bonifacio, they being the children of one Gregoria Pascual;
that Gregoria Pascual previously owned the land in question as evidenced by Tax Declaration No. 6611 of Las Pinas
Rizal issued on December 8, 1920; that Agapita Bonifacio acquired the property in question by purchase from
Gregoria Pascual for which reason Tax Declaration No. 8777 was issued in her name on May 21, 1928; that Gregoria
Pascual during her lifetime, from 1916, possessed the said property in the concept of owner, publicly and
uninterruptedly, which possession was continued by Agapita Bonifacio in 1928; that in 1938 respondents obtained a
loan of P400.00 from the petitioners which they secured with a mortgage on the land in question by way of antichresis;
that for this reason, Tax Declaration No. 8777 was cancelled and substituted by Tax Declaration Nos. 9522 and 2385
issued in the names of the petitioners; that, thereafter, the petitioners began paying taxes on the land; that after
several attempts to redeem the land were refused by the petitioners, the respondents filed a complaint in the Court of
First Instance of Pasay City docketed as Civil Case No. 272-R for the recovery of the possession and ownership of the
said property; that when they learned of the issuance of the certificate of title to the land in the petitioners' names, they
also filed the instant petition for review. The previous complaint, Civil Case No. 272-R, was subsequently dismissed
on a joint petition filed by the parties after they agreed to have the determination of the question of ownership resolved
in the registration proceedings.

In their answer, the spouses Ramirez denied the material allegations of the petition, they based their claim to the land
on two deeds of sale allegedly executed on April 15, 1937 and April 23, 1937 which they allegedly found accidentally
in March 1960.

After trial, the court found that deeds of sale spurious. It further found that the respondents took possession of the land
as owners after the death of Agapita Bonifacio and in 1938, mortgaged it to the spouses Ramirez to secure the
payment of a loan in the amount of P400.00. It was agreed that the respondents could not redeem the property within
a period of five years and that the petitioners would take possession of the land, enjoy its fruits, and pay the land taxes
thereon. The written agreement was kept by the petitioners as creditors. The trial court appreciated the fact of the
petitioners' failure, despite formal request, to produce the document in court in favor of the respondents. Finding the
claims of the herein respondents sustained by the evidence, it ordered the reconveyance of the property in the
following manner:

WHEREFORE, judgment is hereby rendered in favor of petitioners and against applicants as follows:

1) Setting aside its decision dated December 28, 1959 insofar as it found and declared applicants to be the owners of
the parcel of land described in Exhibits A, B and C and insofar as it ordered the registration thereof in their names;

2) Declaring the petitioners, all Filipinos, all of legal age, and all residents of Ligas Bacoor, Cavite, to be the true and
absolute owners pro indiviso of the said parcel of land described in Exhibits A, B and C in the following proportions:

a. Francisca Medina, married to Tomas de Leon, one-third (1/3) thereof;

b. Emilio Martin, married to Dolores Antonio, and Matilde Martin, married to Federico Torres, one-third (1/3) thereof-,

c. Teofilo Guinto, married to Rocila de la Cruz, Delfin Guinto, married to Gregoria Pamaran, Prudencio Guinto,
married to Ana Guinto, and Margarita Guinto, married to Felix Calacala one- third (1/3) thereof;

3) Ordering the registration of the said parcel of land described in Exhibits A, B and C in the names of petitioners;

4) Setting aside its order for the issuance of the decree of registration in favor of applicants dated January 30, 1959,
and ordering the issuance of the decree of registration in the names of petitioners;

5) Cancelling Original Certificate of Title No. 2273 of the Register of Deeds of Rizal in the names of applicants and the
issuance in lieu thereof of another original certificate of title in the names of petitioners in the proportion of their
ownership of the property as stated in paragraph 2 above;

6) Ordering applicants to pay P3,000.00 to petitioners as and for attorney's fees;

7) Ordering applicants to pay the costs of this suit.

15
The decision was affirmed by the Court of Appeals. On a motion for reconsideration filed by the petitioners, the same
appellate court, but with a new member, promulgated a resolution setting aside the original decision. On a motion for
reconsideration filed by the private respondents, this resolution was set aside and the original decision was reinstated.

The petitioners went to this Court in a petition for review on certiorari with the following questions:

ONE-HAS THE COURT OF FIRST INSTANCE, ACTING AS A LAND REGISTRATION COURT, THE JURISDICTION
TO GIVE DUE COURSE TO A PETITION FOR REVIEW OF DECREE UNDER SEC. 38 OF ACT 496 AND TO RE-
OPEN THE ORIGINAL PROCEEDINGS WHEN THE PETITION IS ACTUALLY ONE OF RECONVEYANCE AND
NOT BASED ON ACTUAL OR EXTRINSIC FRAUD?

TWO-DOES SEC. 38 OF ACT NO. 496 APPLY ON ALL FORES (SIC) TO ORIGINAL LAND REGISTRATION
PROCEEDINGS HAD UNDER PARAGRAPH B, SECTION 48 OF COM. ACT NO. 141 AS AMENDED BY REP. ACT
NO. 1942 WHEREIN THE LAND INVOLVED IS PUBLIC AGRICULTURAL LAND?

THREE-HAS THE COURT OF FIRST INSTANCE, ACTING AS A LAND REGISTRATION COURT, THE POWER
AND AUTHORITY TO VEST TITLE ON THE LAND INVOLVED TO HEREIN PRIVATE RESPONDENTS AND
ORDER EVEN ITS PARTITION AMONGST THEM IN THE FACE OF THE ADMITTED FACT THAT THE LAND IS IN
ACTUAL POSSESSION OF PETITIONERS WHILE PRIVATE RESPONDENTS HAD NOT POSSESSED THE SAME
AT ALL?

FOUR-DO THE PRIVATE RESPONDENTS HAVE THE LEGAL CAPACITY AND QUALIFICATION TO ACQUIRE
AND BE VESTED BY THE COURT WITH TITLE TO THE LAND IN QUESTION?

We find the petition without merit.

The first question does not warrant favorable consideration. The issue was submitted to the appellate court and in our
opinion, correctly resolved therein. The Court of Appeals stated:

... The petition alleged that 'the applicants Hilario Ramirez and Valentina Bonifacio willfully and fraudulently
suppressed the facts that the petitioners are the legal and rightful owners of the ricefield in question and that they
possess the said ricefield merely as antichretic creditors as security for the loan of P400.00; that the applicants are
guilty of fraudulent misrepresentation and concealment when they declared in their application, in the case at bar, that
no other person had any claim or interest in the said land.' These we believe are sufficient allegations of extrinsic
fraud.

In the applicant's application for registration, which followed the form required by the Land Registration Act, the
applicants alleged that 'to the best of our knowledge and belief, there is no mortgage or incumbrance of any kind
whatsoever affecting said land, nor any other person having any estate or interest therein, legal or equitable, in
possession, remainder, reversion or expectancy.' This allegation is false and made in bad faith, for, as We have found,
the applicants are not the owners of the land sought to be registered and they are in possession thereof only as
antichretic creditors.

The averments in the petition for review of the decree of registration constitute specific and not mere general
allegations of actual and extrinsic fraud. Competent proof to support these allegations was adduced. We find no
compelling reason to disturb the findings of the two courts below.

The petitioners in this case did not merely omit a statement of the respondents' interest in the land. They positively
attested to the absence of any adverse claim therein. This is clear misrepresentation. The omission and concealment,
knowingly and intentionally made, of an act or of a fact which the law requires to be performed or recorded is fraud,
when such omission or concealment secures a benefit to the prejudice of a third person (Estiva v. Alvero, 37 Phil.
497).

In the case of Libundan v. Palma Gil (45 SCRA 17), this Court held:

The purpose of the law in giving aggrieved parties, deprived of land or any interest therein, through fraud in the
registration proceedings, the opportunity to review the decree is to insure fair and honest dealing in the registration of
land. But the action to annul a judgment, upon the ground of fraud, would be unavailing unless the fraud
be extrinsic  or collateral and the facts upon which it is based have not been controverted or resolved in the case
where the judgment sought to be annulled was rendered. Extrinsic or collateral fraud, as distinguished from intrinsic
fraud, connotes any fraudulent scheme executed by a prevailing litigant 'outside the trial of a case against the
defeated party, or his agents, attorneys or witnesses, whereby said defeated party is prevented from presenting fully
and fairly his side of the case.' But intrinsic fraud takes the form of 'acts of a party in a litigation during the trial, such as

16
the use of forged instruments or perjured testimony, which did not affect the presentation of the case, but did prevent
a fair and just determination of the case.

Thus, relief is granted to a party deprived of his interest in land where the fraud consists in a deliberate
misrepresentation that the lots are not contested when in fact they are, or in applying for and obtaining adjudication
and registration in the name of a co-owner of land which he knows had not been alloted to him in the partition, or in
intentionally concealing facts, and conniving with the land inspector to include in the survey plan the bed of a
navigable stream, or in willfully misrepresenting that there are no other claims, or in deliberately failing to notify the
party entitled to notice, or in inducing him not to oppose an application, or in misrepresenting about the indentity of the
lot to the true owner by the applicant causing the former to withdraw his opposition. In all these examples the
overriding consideration is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in
court or from presenting his case, The fraud, therefore, is one that affects and goes into the jurisdiction of the court.

The second question assigned as an error must also be resolved against the petitioners.

Section 122 of Act No. 496 otherwise known as the Land Registration Act provides:

SEC. 122. Whenever public lands in the Philippine Islands belonging to the Government of the United States or to the
Government of the Philippine Islands are alienated, granted, or conveyed to persons or the public or private
corporations, the same shall be brought forthwith under the operation of this Act and shall become registered lands. It
shall be the duty of the official issuing the instrument of alienation, grant, or conveyance in behalf of the Government
to cause such instrument before its delivery to the grantee, to be filed with the register of deeds for the province where
the land lies and to be there registered like other deeds and conveyances, whereupon a certificate shall be entered as
in other cases of registered land, and an owner's duplicate certificate issued to the grantee. The deed, grant, or
instrument of conveyance from the Government to the grantee shall not take effect as a conveyance or bind the land,
but shall operate only as contract between the Government and the grantee and as evidence of authority to the clerk
or register of deeds to make registration. The act of registration shall be the operative act to convey and affect the
land, and in all cases under this Act, registration shall be made in the office of the register of deeds for the province
where the land lies. The fees for registration shall be paid by the grantee. After due registration and issue of the
certificate and owner's duplicate, such land shall be registered land for all purposes under this Act.

The law is clear. We can apply it to the facts without need for judicial interpretation. Once the deed, grant, or
instrument of conveyance of public land is registered with the Register of Deeds and the corresponding certificate and
owner's duplicate title is issued, such land is deemed registered land. It is brought within the scope and operation of
the Land Registration Law. This is the doctrine laid down by this Court in a long line of cases. (See Heirs of
Deogracias Ramos v. Court of Appeals, 139 SCRA 293; Lahora v. Dayanghirang 37 SCRA 346; Ramirez v. Court of
Appeals, 30 SCRA 297; Director of Lands v. Jugado 2 SCRA 32; Nelayan v. Nelayan, 109 Phil. 183; Republic v. Heirs
of Carle 105 Phil. 1227; El Hogar Filipino v. Olviga, 60 Phil. 17; Manolo v. Lukban, 48 Phil. 973). The land in this case
having been registered and covered by an original certificate of title issued by the Register of Deeds of Rizal, it is
within the provisions of the Land Registration Act. Thus, the decree of registration granted by the lower court in favor
of the petitioners may be reviewed on the ground of actual and extrinsic fraud pursuant to Section 38 of the same Act.

There is likewise no merit in the third assigned error. While there was an admission that the petitioners have been in
actual possession of the disputed land since 1938, it was made to show and prove the fact that the petitioners are only
antichretic creditors. The respondents never admitted that they have not possessed the land at all. On the contrary,
they alleged that they and their predecessors-in-interest namely Gregoria Pascual and Agapita Bonifacio have been in
possession of the land since time immemorial and that the petitioners were placed in possession of the land pursuant
to a contract of antichresis.

The court below found that the petitioners are merely antichretic creditors. This finding and its factual bases were
affirmed by the Court of Appeals. On the basis of the evidence supporting this conclusion, this finding is binding on us
as it is not our duty to weigh evidence on this point all over again. This court has on several occasions held that the
antichretic creditor cannot ordinarily acquire by prescription the land surrendered to him by the debtor (Trillana v.
Manansala, et al., 96 Phil. 865; Valencia v. Acala, 42 Phil. 177; Barreto v. Barreto, 3 Phil. 234). The petitioners are not
possessors in the concept of owner but mere holders placed in possession of the land by its owners. Thus, their
possession cannot serve as a title for acquiring dominion (See Art. 540, Civil Code).

The fourth issue raised by the petitioners is answered by a referral to the detailed factual findings and conclusions of
the trial court. Ten pages of the record on appeal (Record on Appeal, CA-G.R. No. 40425-R, pp. 56-66) state in
convincing detail the portion of the trial court's decision which support its conclusion that Hilario Ramirez and
Valentina Bonifacio are not the owners of the disputed land and have no registrable right over it and that the
respondents herein have established their ownership by a strong preponderance of evidence. The respondents were

17
declared the true and real owners and entitled to registration in their names. The final resolution of the Court of
Appeals affirmed the trial court's decision in toto.  We see no reversible error in this finding.

The argument of laches is explained and countered by the close relationship of the parties and the nature of a contract
of antichresis. The private respondents are nephews and nieces, with their spouses, of the petitioners. Moreover,
there is evidence to show that long before the filing of the cases, there had been attempts to recover the property.

In view of the foregoing, we are constrained to affirm the appellate court's decision. We note, however, that in spite of
the finding of an existing contract of antichresis between the parties, the two courts below did not order the payment of
the principal amount of mortgage. Under Article 2136 of the Civil Code, the debtor cannot reacquire the enjoyment of
the immovable without first having totally paid what he owes the creditor.

WHEREFORE, the decision appealed from is hereby AFFIRMED with a modification that the respondents are ordered
to pay the petitioners the amount of P 400.00 as principal for the contract of antichresis, the fruits obtained from the
possession of the land having been applied to the interests on the loan.

SO ORDERED.

Feria (Chairman), Fernan, Alampay and Paras, JJ., concur.

SALUD RAMOS, petitioner,
vs.
COURT OF APPEALS, ALEJANDRO CATAMBAY and ADELA MENDENACELI, respondents.

DE CASTRO, J.:

This is a petition for certiorari under Rule 45 of the Revised Rules of Court to review the decision 1 of the respondent
Court of Appeals in CA-G.R. No. 58743-R, entitled "Salud Ramos, plaintiff-appellee, vs. Alejandro Catambay and
Adela Mendenaceli, defendants-appellants," promulgated on February 5, 1980, setting aside the decision of the Court
of First Instance of Rizal, Seventh Judicial District, Branch II, which declared petitioner as the rightful owner of the
litigated parcel of land described in paragraph 3 of her complaint and ordering the private respondents to execute the
necessary deed of reconveyance in her favor.

Records show that the property in question was owned and registered in the name of Gabriel Ramos, married to
Francisco Catambay under Transfer Certificate of Title No.13823. 2 On June 18, 1928, the spouses mortgaged the
above-mentioned land with the Philippine National Bank to guarantee payment of a loan in the amount of P500. The
couple died on September 19, 1930 and March 26, 1930, respectively, leaving the said land burdened with the

18
mortgage in favor of PNB, and were survived by their only child Catalina Ramos. Being the only heir, Catalina Ramos
summarily settled and adjudicated to herself the descendible estate of her parents, including the land in question, and
as a result of which, she was issued a new Transfer Certificate of Title No. 25961 for said land, upon cancellation of
T.C.T. No. 13823, her parent's title. Meanwhile, or on May 12, 1933, the mortgage in favor of PNB was cancelled as
shown in the memorandum of encumbrances appearing on T.C.T. No. 13823. 3

After Catalina Ramos became the registered owner of the aforesaid land, she sold it to respondent Alejandro
Catambay as evidenced by a Deed of Absolute Sale of Registered Property 4 dated December 30, 1933, on the basis
of which, the latter was issued Transfer Certificate of Title No. 25962 5 on May 12, 1934, cancelling T.C.T. No. 25961
in the name of the former. It also appears that since 1934 and every year thereafter, respondent Catambay has been
paying the realty tax due on said property and had declared the same in his name. 6

On March 13, 1973, petitioner filed a complaint 7 for reconveyance against private respondents with the Court of First
Instance of Rizal, praying that she be declared the sole and absolute owner of the questioned parcel of land, which
covers an area of 159.791 square meters, originally owned by the spouses Gabriel Ramos and Francisca Catambay,
but which was inherited by her late mother, Catalina Ramos, as the only heir of said spouses. Petitioner alleged, in
substance, in her complaint that during the lifetime of said spouses, they mortgaged the property to the Philippine
National Bank; that upon their death, her mother Catalina Ramos, paid the mortgage indebtedness with the Bank
partly from funds coming from the private respondents, Alejandro Catambay and Adela Mendenaceli, for which reason
Catalina Ramos was made to sign a document guaranteeing payment of the amount advanced by said respondents;
that Catalina Ramos died intestate last June 18, 1943; that in May 1971, she discovered for the first time that the title
to said property had already been transferred in the name of private respondents by virtue of an extrajudicial
adjudication executed by her mother pursuant to which the original certificate of title in the name of Gabriel Ramos
and Francisca Catambay was cancelled and a new one issued in the name of her mother, who thereafter executed a
deed of absolute sale in favor of the private respondents; that the aforestated extrajudicial adjudication and deed of
sale were fictitious and simulated because private respondents, who claim to be the owners of the litigated property,
were guilty of fraud in obtaining the signature of her mother to a document to which they claimed was merely to
guarantee payment of the money advanced by them for the redemption of the property from the bank, but which in
reality was a deed of sale.

Answering said complaint, 8 private respondents denied the material allegations thereof, and alleged as special and
affirmative defense that the property was sold to them by Catalina Ramos on December 30, 1933, after she became
the owner thereof by virtue of a summary adjudication as the only heir of the original owners, and that by virtue of the
registration of the deed of sale in their favor, they were issued T.C.T. No. 25962 on May 12, 1934, and that since then,
or for a period of more than 39 years, they had been in possession of said property as the exclusive owners thereof
publicly, peacefully and adversely against the whole world and had religiously paid the real estate taxes thereof since
1934. They likewise alleged that the action is already barred by the statute of limitations.. Private respondents
furtherquestioned the legal capacity of petitioner to bring the action since her right to inherit as heir of Catalina Ramos,
claiming to be the latter's natural child, had not been duly established, because said Catalina had left a legitimate son.

After hearing, the lower court rendered judgment 9 on October 22, 1975, declaring, as earlier indicated, the petitioner
as the rightful owner of the litigated land and ordered private respondents to execute the necessary deed of
reconveyance in her favor. However, on appeal at the instance of private respondents, the Court of Appeals set aside
the decision of the lower court and dismissed petitioner's complaint. Hence, the present recourse filed be petitioner.

It is worthy of note that private respondents have in their favor the presumption of regularity in the issuance of the
certificate of title in their names in the ordinary course of law. The questioned deed of absolute sale, being a public
document, is by law likewise entitled to full faith and credit upon its face by the Courts unless it is shown by competent
evidence that its execution was tainted by defects or irregularities that would warrant its declaration of nullity. The
person claiming its invalidity, therefore, has the burden of producing such evidence to support his allegation because
the presumption prevails until it is overcome. In order to contradict this, as petitioner attempted to do, it is incumbent
upon her to prove said claim with clear, convincing, strong and Irrefutable proof, more than merely preponderant
evidence which will not suffice. 10

The evidence adduced by the petitioner in her attempt to prove that private respondents were guilty of fraud because
what the latter had represented to her mother, Catalina Ramos, as a mere document guaranteeing repayment of the
amount advanced by them for the payment of the mortgage indebtedness of Gabriel Ramos and Francisca Catambay
with the bank was actually a deed of sale and this fact, petitioner claimed, she discovered only in May 1971 when she
checked the title of the litigated property with the Office of the Register of Deeds, has not resulted in defeating the
validity, authenticity and force of the questioned deed of absolute sale executed by Catalina Ramos in favor of private
respondents as well as the transfer certificate of title subsequently issued in the name of the latter. We have
conscientiously reviewed the evidence and the entire records of the case and We see no reason to disagree with the
conclusion made by the Court of Appeals that the evidence presented by petitioner to overcome the presumptions
19
adverted to, failed far short of the requirement of clear, strong and convincing evidence. As aptly found by said court,
thus:

As a matter of fact, the only evidence presented by plaintiff to support her claim that defendants were
guilty of fraud in the execution of the deed of sale and that they had deceived plaintiff's mother by
making her sign a deed of sale upon their representation that the same was merely a document
guaranteeing payment of the amount advanced by them for the redemption on of the property from
the Philippine National Bank was the testimony of plaintiff that her mother told her that defendants had
no interest on the land in question because it was merely mortgaged to them.

Q. You said awhile ago that your mother died in 1943. My question is: Before the
death of your mother, were you able to talk to her regarding the land mortgaged to
Catambay?

A. Yes, sir. I asked my mother before she died that my uncle, Kuya Ardong have
interest on the land or on their homestead land but she said that he could not make
[sic] interest on the land because it was merely mortgaged to him. (T.S.N. March 8,
1974, page 18.)

Although plaintiff testified that her mother was made to sign a document by defendant Alejandro
Catambay which, according to him was merely a document evidencing her mother's indebtedness to
she did not elaborate nor explain further the basis of her statement. Her testimony on this point merely
was:

Q. Now after Mr. Catambay has paid the loan with the Philippine National Bank, do
you remember if there is any document signed by your mother?

A. Yes, sir. She was made to sign a document which, according to Alejandro
Catambay, was merely a document evidencing her indebtedness to him (T.S.N.
March 8, 1974, page 14.)

Was she present when her mother signed the document which was supposed to be merely a
document evidencing her mother's indebtedness to Catambay? From whom then did she learn that at
the time her mother signed the document which, as it now appears, is a deed of sale Alejandro
Catambay told her that the document she was signing was merely a document evidencing her
indebtedness to Catambay? Whoever her informant was, be it her mother or another person present
during the occasion, her testimony as quoted above is purely hearsay.

We have conscientiously studied the testimony of plaintiff and her witness and We are unable to find
any evidence other than that quoted above, which refers to the execution of the deed of sale, much
less to the deception of defendants in securing the signature of Cataum Ramos to the deed of sale
(Exhibit "1").

We find, therefore, no evidence sufficient to justify Our declaring the deed of sale executed by
plaintiff's mother in favor of defendants to be other than what it purports and which would justify Us in
making a finding that defendants were guilty of fraud in securing title in their name over the property in
question on the basis of a simulated or fictitious deed of sale. On this basis alone, We would be
justified in sustaining defendants' title to the property under the certificate of title issued in their name
in 1934. 11

Even from the standpoint of acquisitive prescription, which seems to be more decisive, it appears too clear that private
respondents have acquired title to the land in suit by virtue of possession in the concept of an owner. It is of record
that private respondents have been in continuous possession of the litigated parcel of land since they bought the
same in 1934 and since then, have been paying the real estate taxes due thereon and had declared said property in
their name for taxation purposes. As correctly ruled by the appellate court, "while tax declaration and tax receipts are
not necessarily evidence of title, they are strong evidence of possession for no one in his right mind would be paying
taxes year after year for a property that is not in his actual possession."

The records of the case further disclose that petitioner's complaint for reconveyance was filed in the lower court only
on March 13, 1973, 39 years after the registration of the deed of absolute sale in favor of private respondents and the
issuance of a certificate of title in their name exclusively on May 12, 1934, from which latter date petitioner's cause of
action, if any, must be deemed to have commenced, since the registration of the aforesaid deed of sale in the office of
20
the Registry of Deeds constitutes a constructive notice to the whole world of its contents and all interests, legal and
equitable, included therein. 12

Since the prescriptive period in this case had already run since May 12, 1934 prior to the effectivity of the new Civil
Code on August 30, 1950, there can be no doubt that the former laws on prescription apply here, pursuant to Article
1116 of the Civil Code. Under Section 40 of the Code of Civil Procedure formerly in force, adverse possession ripened
into ownership after the lapse of ten (10) years, good or bad faith of the possessor being immaterial. for purposes of
acquisitive prescription. In like manner, an action to recover title to or possession of immovable Property prescribed in
the same period of 10 years. 13 The instant case, not having been filed within 10 years from the time the cause of
action accrued on May 12, 1934, prescribed in 1944 because the complaint was filed only on March 13, 1973, about
39 years later. Consequently, the possession of private respondents over the litigated property ripened into full
ownership in 1944, ten years after May 12, 1934, when their possession which was actual, open, public and
continuous, under a claim of title exclusive of any other right and adverse to all other claims, commenced.

It becomes apparent, therefore, based on the foregoing considerations, that apart from being the vendee of the parcel
of land in question as evidenced by the questioned deed of sale, which may be a source of respondents' right of
ownership over the property, their said light had been rendered indisputable when the favorable effects of acquisitive
prescription had set in on their side. Even the thirty-year period fixed in the new Civil Code for the acquisition of
ownership by extraordinary prescription or for the extinction of the right of action over immovables, had expired when
the present action was filed.

In view of the above, We deem it no longer necessary to have a detailed discussion on the other points raised by the
parties, especially on the applicability of the doctrine of laches to the instant case. Suffice it to say, since May 12,
1934, when the deed of sale was registered in the office of the registry of Deeds and a certificate of title was issued in
the name of private respondents, Catalina Ramos had not, impugned the validity and efficacy of said documents until
her death on June 18, 1943. Petitioner, who claimed to be an heir of said Catalina Ramos, had likewise failed to
dispute said documents until she filed her complaint in the lower court on March 13, 1973, almost thirty years after the
death of her alleged mother. Finally, the ruling in Sotto v. Teves,  86 SCRA 154, invoked by herein petitioner, is not
applicable to this case, the facts not being in all fours.

WHEREFORE, this petition is dismissed for lack of merit. No special pronouncement as to costs.

SO ORDERED

Barredo (Chairman), Aquino, Ericta and Escolin, JJ., concur.

[G.R. No. 175763 : April 11, 2012]

HEIRS OF BIENVENIDO AND ARACELI TANYAG, NAMELY: ARTURO TANYAG, AIDA T. JOCSON AND
ZENAIDA T. VELOSO, PETITIONERS, VS. SALOME E. GABRIEL, NESTOR R. GABRIEL, LUZ GABRIEL-
ARNEDO MARRIED TO ARTURO ARNEDO, NORA GABRIEL-CALINGO MARRIED TO FELIX CALINGO, PILAR
M. MENDIOLA, MINERVA GABRIEL-NATIVIDAD MARRIED TO EUSTAQUIO NATIVIDAD, AND ERLINDA
VELASQUEZ MARRIED TO HERMINIO VELASQUEZ, RESPONDENTS.

DECISION

VILLARAMA, JR., J.:

This is a petition for review under Rule 45 which seeks to reverse the Decision[1] dated August 18, 2006 and
Resolution[2] dated December 8, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 81224.   The CA affirmed the

21
Decision[3] dated November 19, 2003 of the Regional Trial Court of Pasig City, Branch 267 in Civil Case No. 67846
dismissing petitioners’ complaint for declaration of nullity of Original Certificate of Title (OCT) No. 1035, reconveyance
and damages, as well as respondents’ counterclaims for damages and attorney’s fees.cralaw

Subject of controversy are two adjacent parcels of land located at Ruhale, Barangay Calzada, Municipality of Taguig
(now part of Pasig City, Metro Manila).  The first parcel (“Lot 1”) with an area of 686 square meters was originally
declared in the name of Jose Gabriel under Tax Declaration (TD) Nos. 1603 and 6425 issued for the years 1949 and
1966, while the second parcel (“Lot 2”) consisting of 147 square meters was originally declared in the name of Agueda
Dinguinbayan under TD Nos. 6418 and 9676 issued for the years 1966 and 1967.[4]  For several years, these lands
lined with bamboo plants remained undeveloped and uninhabited.

Petitioners claimed that Lot 1 was owned by Benita Gabriel, sister of Jose Gabriel, as part of her inheritance as
declared by her in a 1944 notarized instrument (“Affidavit of Sale”) whereby she sold the said property to spouses
Gabriel Sulit and Cornelia Sanga.  Said document states:

DAPAT MALAMAN NG LAHAT NG MAKABABASA

Na, akong Benita Gabriel, balo sa nasirang Calixto Lontoc, Filipina may karapatang gulang naninirahan sa nayon ng
Palingon, Tagig, Rizal, x x x sa pamamaguitan nitoy

ISINASAYSAY KO AT PINAGTITIBAY

1.) Na, sarili ko at tunay na pagaari ang isang lagay na lupang kawayanan na sapagkat itoy kabahagui ko sa aking
kapatid na [J]ose Gabriel, na itoy mana ko sa aking nasirang ama Mateo Gabriel  sa kami lamang dalawa ng aking
kapatid na binabanguit ko na Jose Gabriel siyang mga anak at tagapagmana ng aming amang nasirang Mateo
Gabriel, maliban sa amin ay  wala nang iba, kayat kami ay naghati sa mga ari-arian na na iwan sa amin ng nasirang
ama namin na Mateo Gabriel, na ang lupang kawayanang itoy may nakatanim na walong (8) punong kawayan at na
sa pook na kung pamagatan ay Ruhale nayon ng Calzada, Tagig, Rizal, at na sa loob ng mga kahanganan at sukat
na sumusunod[:]

Na, ang kahangan sa Hilagaan Sapang Ruhale at Vicente Bunye, sa Amihanan Felipe Pagkalinawan, sa Timugan
Juan Flores, at sa Habagatan Apolonio Ocol may sukat na 6 areas at 85 centiareas may halagan amillarada na
P80.00)  Pesos alinsunod sa Tax Blg. 20037, sa pangalan ng aking kapatid na Jose Gabriel.  Na, ang lupang itoy
hindi natatala sa bisa ng batas Blg. 496 ni sa susog gayon din sa Hipotecaria Espanola itoy may mga mojon bato ang
mga panulok at walang bakod.

2.)  Na, alang-alang sa halagang SIYAMNAPO AT ANIM (P96.00) na Pisong salaping guinagamit dito sa Filipinas na
bago dumating ang mga sandaling itoy tinaggap ko at ibinayad sa akin ng boong kasiyahang loob ko ng magasawang
GABRIEL SULIT AT CORNELIA SANGA, mga Filipinos may mga karapatang gulang mga naninirahan sa nayon ng
Calzada, Tagig, Rizal, ngayon ay inilipat ko at ipinagbili ng bilihang tuluyan (Venta real soluta) ang isinasaysay kong
lupang kawayanan sa itaas nito ng nasabi halagang SIYAMNAPO AT ANIM (P96.00) na Piso at sa nabanguit na
magasawang GABRIEL SULIT AT CORNELIA SANGA, gayon din sa lahat ng mga tagapagmana nila, ngayong mga
arao na ito ay ang may hawak at namamahala ng lupang itoy ang mga nakabili sa akin na magasawang GABRIEL
SULIT AT CORNELIA SANGA.

3.) Na, ang kasulatang itoy ng bilihan ay nais na itala sa bisa ng batas Blg. 3344.

NA SA KATUNAYAN NG LAHAT NG ITOY ako ay lumagda sa kasulatang ito dito sa Tagig, Rizal, ngayong ika - 28 ng
Junio 1944.

(Nilagdaan) BENITA GABRIEL[5]

Lot 1 allegedly came into the possession of Benita Gabriel’s own daughter, Florencia Gabriel Sulit, when her father-in-
law Gabriel Sulit gave it to her as part of inheritance of his son, Eliseo Sulit who was Florencia’s husband.  Florencia
Sulit sold the same lot to Bienvenido S. Tanyag, father of petitioners, as evidenced by a notarized deed of sale dated
October 14, 1964.[6]  Petitioners then took possession of the property, paid the real estate taxes due on the land and
declared the same for tax purposes, as shown by TD No. 11445 issued in 1969 in the name of Bienvenido’s wife,
Araceli C. Tanyag; TD No. 11445 cancelled TD No. 6425 in the name of Jose Gabriel.   TD Nos. 3380 and 00486 also
in the name of Araceli Tanyag were issued in the years 1974 and 1979.[7]

As to Lot 2, petitioners averred that it was sold by Agueda Dinguinbayan to Araceli Tanyag under Deed of Sale
executed on October 22, 1968.  Thereupon, petitioners took possession of said property and declared the same for
tax purposes as shown by TD Nos. 11361, 3395, 120-014-00482, 120-00-014-20-002-000, C-014-00180 and D-014-
00182 issued for the years 1969, 1974, 1979, 1985, 1991 and 1994.[8]  Petitioners claimed to have continuously,
22
publicly, notoriously and adversely occupied both Lots 1 and 2 through their caretaker Juana Quinones[9]; they fenced
the premises and introduced improvements on the land.[10]

Sometime in 1979, Jose Gabriel, father of respondents, secured TD No. 120-014-01013 in his name over Lot 1
indicating therein an increased area of 1,763 square meters.  Said tax declaration supposedly cancelled TD No. 6425
over Lot 1 and contained the following inscription[11]:

Note:   Portions of this Property is Also Declared

in the name of Araceli C. Tanyag under
T.D.#120-014-00858  686 sq. m.

Also inscribed on TD No. 120-014-00858[12] (1979) in the name of Araceli Tanyag covering Lot 1 are the following:

This property is also covered by T.D. #120-014-01013

in the name of Jose P. Gabriel
         1-8-80
which notation was carried into the 1985, 1990 and 1991 tax declarations, all in the name of Araceli Tanyag.

On March 20, 2000, petitioners instituted Civil Case No. 67846 alleging that respondents never occupied the whole
686 square meters of Lot 1 and fraudulently caused the inclusion of Lot 2 in TD No. 120-014-01013 such that Lot 1
consisting of 686 square meters originally declared in the name of Jose Gabriel was increased to 1,763 square
meters.  They contended that the issuance of OCT No. 1035 on October 28, 1998 over the subject land in the name of
respondents heirs of Jose Gabriel was null and void from the beginning.[13]

On the other hand, respondents asserted that petitioners have no cause of action against them for they have not
established their ownership over the subject property covered by a Torrens title in respondents’ name.  They further
argued that OCT No. 1035 had become unassailable one year after its issuance and petitioners failed to establish that
it was irregularly or unlawfully procured.[14]

Respondents’ evidence showed that the subject land was among those properties included in the Extrajudicial
Settlement of Estate of Jose P. Gabriel[15] executed on October 5, 1988, covered by TD No. B-014-00643 (1985) in the
name of Jose Gabriel.   Respondents declared the property in their name but the tax declarations (1989, 1991 and
1994) carried the notation that portions thereof (686 sq. ms.) are also declared in the name of Araceli Tanyag. On
October 28, 1998, OCT No. 1035[16] was issued to respondents by the Register of Deeds of Pasig, Metro Manila under
Decree No. N-219177 pursuant to the Decision dated September 20, 1996 of the Land Registration Court in LRC
Case No. N-11260, covering Lot 1836 MCadm-590-D, Taguig Cadastral Mapping, Plan Ap-04-002253, with an area of
1,560 square meters.

On the other hand, respondents’ TD Nos. D-014-00839 and D-014-01923 issued in 1993 and 1999 respectively,
showed that respondents sold 468 square meters of Lot 1 to Jayson Sta. Barbara.[17]  The segregation of said 468
square meters pertaining to Jayson Sta. Barbara was reflected in the approved survey plan of Lot 1836 prepared by
respondents’ surveyor on March 18, 2000.[18]

At the trial, petitioners presented their witness Arturo Tanyag, son of Bienvenido Tanyag and Araceli Tanyag who died
on March 30, 1968 and October 30, 1993, respectively.  He testified that according to Florencia Sulit, Benita Gabriel-
Lontoc and her family were the ones in possession of Lot 1 since 1944; Benita Gabriel had executed an Affidavit of
Sale declaring said property as her inheritance and conveying the same to spouses Gabriel and Cornelia Sulit. He
affirmed that they had been in possession of Lot 1 from the time Bienvenido Tanyag bought the land from Florencia
Sulit in 1964.  Based on the boundaries indicated in the tax declaration, they fenced the property, installed Juana
Quinones as their caretaker who also attended to the piggery, put up an artesian well and planted some trees.  From
1964 up to 1978, nobody disturbed them in their possession or claimed ownership of the land; four years after
acquiring Lot 1, they also purchased the adjacent property (Lot 2) to expand their piggery.  Lot 2 was also separately
declared for tax purposes after their mother purchased it from Agueda Dinguinbayan.  He had personally witnessed
the execution of the 1968 deed of sale including its notarization, and was also present during the physical turn over of
Lot 2 by the seller.  In fact, he was one of the instrumental witnesses to the deed of sale and identified his signature
therein.   He further described the place as inaccessible at that time as there were no roads yet and they had to
traverse muddy tracks to reach their property.[19]

Arturo further testified that the first time they met Jose Gabriel was when the latter borrowed from their mother all the
documents pertaining to their property.  Jose Gabriel came looking for a piece of property which he claims as his but
he had no documents to prove it and so they showed him their documents pertaining to the subject property; out of the
goodness of her mother’s heart, she lent those documents to her brother Jose Gabriel.  During the cadastral survey
conducted in 1976, they had both lots surveyed in preparation for their consolidation under one tax declaration. 

23
However, they did not succeed in registering the consolidated lots as they discovered that there was another tax
declaration covering the same properties and these were applied for titling under the name of Jose Gabriel sometime
in 1978 or 1980, which was after the time said Jose Gabriel borrowed the documents from their mother. No notice of
the hearings for application of title filed by Jose Gabriel was received by them.  They never abandoned the property
and their caretaker never left the place except to report to the police when she was being harassed by the
respondents. He also recalled that respondents had filed a complaint against them before the barangay but since no
agreement was reached after several meetings, they filed the present case.[20]

The next witness for petitioners was Juana Quinones, their caretaker who testified that she had been staying on
petitioners’ property since 1964 or for 35 years already.  She had built a nipa hut and artesian well, raised piggery and
poultry and planted some root crops and vegetables on the land.  At first there was only one parcel but later the
petitioners bought an additional lot; Arturo Tanyag gave her money which she used for the fencing of the property. 
During all the time she occupied the property there was nobody else claiming it and she also had not received any
notice for petitioners concerning the property, nor the conduct of survey on the land.  On cross-examination, she
admitted that she was living alone and had no Voter’s ID or any document evidencing that she had been a resident
there since 1964.  Although she was living alone, she asks for help from other persons in tending her piggery.[21]

Angelita Sulit-delos Santos, cousin of petitioners and also of  respondents, testified that she came to know the subject
property because according to her paternal grandfather Gabriel Sta. Ana Sulit, her maternal grandmother Benita
Gabriel-Lontoc mortgaged the property to him.  It was Benita Gabriel Lontoc who took care of her, her siblings and
cousins; they lived with her until her death.  She identified the signature of Benita Gabriel in the 1944 Affidavit of Sale
in favor of Gabriel Sulit.  Lot 1 consisting of 600 square meters was vacant property at that time but her family was in
possession thereof when it was sold to Gabriel Sulit; it was her father Eliseo Sulit and uncle Hilario Sulit, who were
incharge of their property.  On cross-examination, she was asked details regarding the supposed mortgage of Lot 1 to
Gabriel Sulit but she admitted she does not know anything as she was still very young then.[22]

Respondents’ first witness was Roberto Gabriel Arnedo, son of Luz Gabriel-Arnedo.  He testified that when he was
about 5 or 6 years old (1953 or 1954), his grandfather Jose Gabriel used to bring him along to visit the subject
property consisting of 1,763 square meters based on the tax declaration and OCT.  They had picnics and celebrate
his grandfather’s birthday there.  He recalled accompanying his grandfather in overseeing the planting
of gumamela which served as the perimeter fence. Jose Gabriel had not mentioned anything about the claim of
petitioners over the same land; Jose Gabriel handed the documents pertaining to the land to his eldest aunt and
hence it now belongs to them.[23]  On cross-examination, he claimed that during those years he had visited the land
together with his grandfather, he did not see Florencia Sulit and her family.[24]

Virginia Villanueva, daughter of Salome Gabriel, testified that they acquired the subject property from their grandfather
Jose Gabriel who had a tax declaration in his name.   Her mother furnished them with documents such as tax
declarations and the extrajudicial settlement of the estate of Jose Gabriel; they also have an approved survey plan
prepared for Salome Gabriel.  She does not know the petitioners in this case.[25]  On cross-examination, she said that
the subject property was inherited by Jose Gabriel from his father Mateo Gabriel; Jose Gabriel was the sole owner of
the land while Benita Gabriel has separate properties in Palingon and Langkokak.[26]  Though they are not actually
occupying the property, they visit the place and she does not know anybody occupying it, except for the portion (486
square meters) which petitioners sold to Sta. Barbara.  A nine-door apartment was built on the said portion without
their permission.  She had talked to both Sta. Barbara and with Arturo Tanyag they had meetings before the
barangay; however, petitioners filed the present case in court.  She insisted that there is nobody residing in the subject
property; there is still the remaining 901 square meters which is owned by their mother.  She admitted there were
plants on the land but she does not know who actually planted them; it was her grandfather who built a wooden fence
and gumamela in the 1960s.  As to the hearings on the application for title, she had not attended the same; she does
not know whether the petitioners were notified of the said hearings.  She also caused the preparation of the survey
plan for Salome Gabriel.   On the increased area of the property indicated in the later tax declarations, she admitted
the discrepancy but said there were barangay roads being built at the time.[27]

Esmeraldo Ramos, Municipal Assessor of Taguig, testified that he was formerly a Land Appraiser in the Office of the
Municipal Assessor of Taguig and in the course of his duties had certified one of the tax declarations in the name of
respondents (TD No. EL-014-10585).   He identified and verified said document and the other tax declarations
submitted in court by the respondents.  He admitted that on January 10, 1980, they made the entry on TD No. 6425 in
the name of Jose Gabriel that the same was cancelled by TD No. 120-014-01013 also in the name of Jose Gabriel
who presented a supposed deed of sale in favor of Araceli Tanyag which caused the earlier cancellation of TD No.
6425 in his name.  However, upon investigation they found out that the seller Florencia Sulit was not the owner
because the declared owner was Jose Gabriel; even the deed of sale recognized that the property was declared in the
name of Jose Gabriel.  They also discovered from the cadastral survey and tax mapping of Taguig that the property is
in the name of Jose Gabriel both in the Bureau of Lands and Municipal Assessor’s Office.  As far as he knows, it was
Jose Gabriel who owned the subject property which he usually visited; he recalled that around the late 70’s and 80’s,
he ordered the fencing of barbed wire and bamboo stalks on the land which is just 3 lots away from his own property. 
24
As to the discrepancy in the area of the property as originally declared by Jose Gabriel, he explained that the
boundaries in the original tax declaration do not change but after the land is surveyed, the boundaries naturally would
be different because the previous owner may have sold his property or the present owner inherits the property from
his parents.  He admitted that the tax declaration is just for tax purposes and not necessarily proof of ownership or
possession of the property it covers.[28]

Respondents’ last witness was Antonio Argel who testified that he had resided for 52 years on a land near the subject
property and as far as he knows it was Jose Gabriel who owns it and planted thereon.  On cross-examination, he
admitted that Jose Gabriel was not in physical possession of the property. He just assumed that the present
occupants of the property were allowed by Jose Gabriel to stay therein because he is the owner.   There is an
apartment and three small houses existing on the property, and about five families are living there.  He confirmed that
there is a piggery being maintained by a certain Juana who had been residing there maybe for fifteen years already.[29]

In rebuttal, petitioners presented two witnesses who are owners of properties adjoining that of the subject land. 
Rodante Domingo testified that it was only now did he learn that the property of Arturo Tanyag is already titled in the
name of respondents.  He was not aware of the titling proceeding because he never received any notice as adjoining
owner.  His own property is already titled in his name and he even asked Arturo Tanyag to act as a witness in his
application for titling.[30]   On the other hand, Dado Dollado testified that he acquired his property in 1979.  He likewise
affirmed that he did not receive any notice of the proceedings for application for titling filed by respondents and it was
only now that he learned from Arturo Tanyag that the subject property was already titled in the names of respondents.
[31]

The last rebuttal witness for petitioners was Dominador Dinguinbayan Ergueza, son of Agueda Dinguinbayan.  He
testified that the subject property was formerly owned by his mother and the present owner is Araceli Tanyag who
bought the same from his mother in 1968.  He described the boundaries of the property in relation to the adjoining
owners at that time; presently, the left portion is already a street (Rujale St.) going towards the sea.  He admitted that
his wife, Livina Ergueza was an instrumental witness in the 1968 deed of sale in favor of Araceli Tanyag.[32]

In its decision, the trial court dismissed the complaint as well as the counterclaim, holding that petitioners failed to
establish ownership of the subject property and finding the respondents to be the declared owners and legal
possessors.  It likewise ruled that petitioners were unable to prove by preponderance of evidence that respondents
acquired title over the property through fraud and deceit.

Petitioners appealed to the CA which affirmed the trial court’s ruling.  The CA found that apart from the Affidavit
executed by Benita Gabriel in 1944 claiming that she inherited Lot 1 from their father, Mateo Gabriel, there is no
evidence that she, not Jose Gabriel, was the true owner thereof.   It noted that just four years after Benita Gabriel’s
sale of the subject property to the Sulit spouses, Jose Gabriel declared the same under his name for tax purposes,
paying the corresponding taxes.  The appellate court stressed that petitioners’ allegation of bad faith was not proven.

Petitioners’ motion for reconsideration was likewise denied by the CA.   Hence, this petition.

Petitioners assail the CA in not finding that the respondents obtained OCT No. 1035 in their names fraudulently and in
bad faith.   They also claim to have acquired ownership of the subject lots by virtue of acquisitive prescription.

The issues presented are: (1) whether respondents committed fraud and bad faith in registering the subject lots in
their name; and (2) whether petitioners acquired the property through acquisitive prescription.

Registration of a piece of land under the Torrens System does not create or vest title, because it is not a mode of
acquiring ownership.  A certificate of title is merely an evidence of ownership or title over the particular property
described therein.[33] Thus, notwithstanding the indefeasibility of the Torrens title, the registered owner may still be
compelled to reconvey the registered property to its true owners.  The rationale for the rule is that reconveyance does
not set aside or re-subject to review the findings of fact of the Bureau of Lands.  In an action for reconveyance, the
decree of registration is respected as incontrovertible.  What is sought instead is the transfer of the property or its title
which has been wrongfully or erroneously registered in another person’s name, to its rightful or legal owner, or to the
one with a better right.[34]

An action for annulment of title or reconveyance based on fraud is imprescriptible where the plaintiff is in possession
of the property subject of the acts.[35]  The totality of the evidence on record established that it was petitioners who are
in actual possession of the subject property; respondents merely insinuated at occasional visits to the land.  However,
for an action for reconveyance based on fraud to prosper, this Court has held that the party seeking reconveyance
must prove by clear and convincing evidence his title to the property and the fact of fraud.[36]

The CA correctly observed that the only evidence of Benita Gabriel’s supposed title was the 1944 Affidavit of Sale
whereby Benita Gabriel claimed sole ownership of Lot 1 as her inheritance from their father, Mateo Gabriel.   The
25
property until 1949 was still declared in the name Jose Gabriel despite the 1944 sale executed by Benita Gabriel in
favor of spouses Gabriel and Cornelia Sulit.  As to the alleged fraud perpetrated by Jose Gabriel and respondents in
securing OCT No. 1035 in their name, this was clearly not proven as Arturo Tanyag testified merely that Jose Gabriel
borrowed their documents pertaining to the property.  No document or testimony was presented to show that Jose
Gabriel employed deceit or committed fraudulent acts in the proceedings for titling of the property.

However, the CA did not address the issue of acquisitive prescription raised by the petitioners.  In their Complaint
before the lower court, petitioners alleged –

15. Defendants never occupied the whole area of the lot covered by Tax Declaration No. 1603 (686 sq. m.) neither
were they able to set foot on the property covered by Tax Declaration No. 6542 [sic] for the reason that those lots had
been in actual, open continuous, adverse and notorious possession of the plaintiffs against the whole world for more
than thirty years which is equivalent to title.

x x x x[37]
Such character and length of possession of a party over a parcel of land subject of controversy is a factual issue. 
Settled is the rule that questions of fact are not reviewable in petitions for review on certiorari under Rule 45 of the
Rules of Court, as only questions of law shall be raised in such petitions.   While this Court is not a trier of facts, if the
inference drawn by the appellate court from the facts is manifestly mistaken, it may, in the interest of justice, review
the evidence in order to arrive at the correct factual conclusions based on the record.[38]

In this case, the CA was mistaken in concluding that petitioners have not acquired any right over the subject property
simply because they failed to establish Benita Gabriel’s title over said property.  The appellate court ignored
petitioners’ evidence of possession that complies with the legal requirements of acquiring ownership by prescription.

Acquisitive prescription is a mode of acquiring ownership by a possessor through the requisite lapse of time.  In order
to ripen into ownership, possession must be in the concept of an owner, public, peaceful and uninterrupted.[39] 
Possession is open when it is patent, visible, apparent, notorious and not clandestine.[40]  It is continuous when
uninterrupted, unbroken and not intermittent or occasional; exclusive when the adverse possessor can show exclusive
dominion over the land and an appropriation of it to his own use and benefit; and notorious when it is so conspicuous
that it is generally known and talked of by the public or the people in the neighborhood.  The party who asserts
ownership by adverse possession must prove the presence of the essential elements of acquisitive prescription.[41]

On the matter of prescription, the Civil Code provides:

Art. 1117. Acquisitive prescription of dominion and other real rights may be ordinary or extraordinary.

Ordinary acquisitive prescription requires possession of things in good faith and with just title for the time fixed by law.

Art. 1134. Ownership and other real rights over immovable property are acquired by ordinary prescription through
possession of ten years.

Art. 1137. Ownership and other real rights over immovables also prescribe through uninterrupted adverse possession
thereof for thirty years, without need of title or of good faith.  (Emphasis supplied.)

Petitioners’ adverse possession is reckoned from 1969 with the issuance of TD No. 1145 in the name of Araceli
Tanyag, which tax declaration cancelled TD No. 6425 in the name of Jose Gabriel.[42]   It is settled that tax receipts and
declarations are prima facie proofs of ownership or possession of the property for which such taxes have been paid.
Coupled with proof of actual possession of the property, they may become the basis of a claim for ownership.[43] 
Petitioners’ caretaker, Juana Quinones, has since lived in a nipa hut, planted vegetables and tended a piggery on the
land.  Aside from paying taxes due on the property, petitioners also exercised other acts of ownership such as selling
the 468-square meter portion to Sta. Barbara who had constructed thereon a nine-door apartment building.

It was only in 1979 that respondents began to assert a claim over the property by securing a tax declaration in the
name of Jose Gabriel albeit over a bigger area than that originally declared.  In 1998, they finally obtained an original
certificate of title covering the entire 1,763 square meters which included Lot 1.  Did these acts of respondents
effectively interrupt the possession of petitioners for purposes of prescription?

We answer in the negative.

In the case of Heirs of Marcelina Azardon-Crisologo v. Rañon[44] this Court citing Article 1123 of the Civil Code[45] held
that civil interruption takes place with the service of judicial summons to the possessor and not by filing of a mere
Notice of Adverse Claim.  Thus:

26
Article 1123 of the Civil Code is categorical.  Civil interruption is produced by judicial summons to the
possessor.  Moreover, even with the presence of judicial summons, Article 1124 sets limitations as to when such
summons shall not be deemed to have been issued and shall not give rise to interruption, to wit: 1) if it should be void
for lack of legal solemnities; 2) if the plaintiff should desist from the complaint or should allow the proceedings to
lapse; or 3) if the possessor should be absolved from the complaint.

Both Article 1123 and Article 1124 of the Civil Code underscore the judicial character of civil interruption.  For civil
interruption to take place, the possessor must have received judicial summons.  None appears in the case at
bar.  The Notice of Adverse Claim which was filed by petitioners in 1977 is nothing more than a notice of claim which
did not effectively interrupt respondents’ possession.  Such a notice could not have produced civil interruption.  We
agree in the conclusion of the RTC, which was affirmed by the Court of Appeals, that the execution of the Notice of
Adverse Claim in 1977 did not toll or interrupt the running of the prescriptive period because there remains, as yet, a
necessity for a judicial determination of its judicial validity.  What existed was merely a notice.  There was no
compliance with Article 1123 of the Civil Code.  What is striking is that no action was, in fact, filed by petitioners
against respondents.  As a consequence, no judicial summons was received by respondents. As aptly held by
the Court of Appeals in its affirmance of the RTC’s ruling, the Notice of Adverse Claim cannot take the place of judicial
summons which produces the civil interruption provided for under the law. In the instant case, petitioners were not
able to interrupt respondents’ adverse possession since 1962.  The period of acquisitive prescription from 1962
continued to run in respondents’ favor despite the Notice of Adverse Claim.  (Emphasis supplied.)

From 1969 until the filing of this complaint by the petitioners in March 2000, the latter have been in continuous, public
and adverse possession of the subject land for 31 years.  Having possessed the property for the period and in the
character required by law as sufficient for extraordinary acquisitive prescription, petitioners have indeed acquired
ownership over the subject property.   Such right cannot be defeated by respondents’ acts of declaring again the
property for tax purposes in 1979 and obtaining a Torrens certificate of title in their name in 1998.

This notwithstanding, we uphold petitioners’ right as owner only with respect to Lot 1 consisting of 686 square meters.
Petitioners failed to substantiate their claim over Lot 2 by virtue of a deed of sale from the original declared owner,
Agueda Dinguinbayan.  Respondents asserted that the 147 square meters covered by the tax declarations of
Dinguinbayan being claimed by petitioners  is not the same lot included in OCT No. 1035.

Under Article 434 of the Civil Code, to successfully maintain an action to recover the ownership of a real property, the
person who claims a better right to it must prove two (2) things: first, the identity of the land claimed; and second, his
title thereto.  In regard to the first requisite, in an accion reinvindicatoria, the person who claims that he has a better
right to the property must first fix the identity of the land he is claiming by describing the location, area and boundaries
thereof.[46]  In this case, petitioners failed to identify Lot 2 by providing evidence of the metes and bounds thereof, so
that the same may be compared with the technical description contained in OCT No. 1035, which would have shown
whether Lot 2 consisting of 147 square meters was erroneously included in respondents’ title.  The testimony of
Agueda Dinguinbayan’s son would not suffice because said witness merely stated the boundary owners as indicated
in the 1966 and 1967 tax declarations of his mother.  On his part, Arturo Tayag claimed that he had the lots surveyed
in the 1970s in preparation for the consolidation of the two parcels.  However, no such plan was presented in
court.cralaw

WHEREFORE, the petition is PARTLY GRANTED.  The Decision  dated August 18, 2006 of the Court of Appeals in
CA-G.R. CV No. 81224 is MODIFIED in that petitioners heirs of Bienvenido and Araceli Tanyag are hereby declared
the owners of 686 square meters previously declared under Tax Declaration Nos. 11445, 120-014-00486, 120-014-
0085, B-014-00501, E-014-01446, C-014-00893 and D-014-00839 all in the name of Araceli Tanyag, which lot is
presently covered by OCT No. 1035 issued by the Register of Deeds of Pasig, Metro Manila in the name of
respondents Salome Gabriel, Nestor R. Gabriel, Luz Gabriel-Arnedo, Nora Gabriel-Calingo, Pilar Gabriel-Mendiola,
Minerva Gabriel-Natividad and Erlinda Gabriel-Velasquez.  Respondents are ORDERED to RECONVEY the said 686-
square meter portion to the petitioners.

No pronouncement as to costs.

SO ORDERED.

Corona, C.J., (Chairperson), Leonardo-De Castro, Bersamin, and Del Castillo, JJ., concur.

LUPO L. DIÑOSO, petitioner,
vs.
COURT OF APPEALS and ANTONIO P. FONTILLAS, respondents.
27
Cesar B. Villanueva and Luperio F. Villanueva for petitioner.
Nicolas C. Adolfo for respondents.

REYES, J.B.L., J.:

Appeal by certiorari from a decision of the Court of Appeals (CA-G.R. No. 23886-R, 30 June 1960) affirming a
judgment rendered by the Court of First Instance of Zambales. As found by respondent court the facts are:

On December 18, 1944 appellee (Antonio D. Fontillas) bought from Modesta Feria four parcels of land, three
of which were located in San Narciso, Zambales, and the fourth — the lot in question — in sitio Cawatan
Kiling, Cabangan, Zambales (Exhibit A.) The vendor was given the right repurchase the properties on or
before December 1, 1945. As she failed to exercise her right, the vendee consolidated his ownership and
registered the deed of sale of option to repurchase in accordance with Act 3344 on January 10, 1946.
However, he failed to take possession thereof when the present action was commenced on September 4,
1952.

It also appears that on April 6, 1940, Modesta Feria executed in favor of appellant the pacto de retro sale
Exhibit 1 which was registered only on May 25, 1948. After the sale appellant took possession of the land in
question and was still in possession thereof when the present action was commenced on September 4, 1952.

Notwithstanding the numerous questions raised by appellant in the eight assignments of error submitted in his
brief, we believe that only two questions are decisive of this case. The first is whether or not the land sold by
Modesta Feria to appellee is the same parcel of land sold to appellant; and the second is whether, assuming
that the properties sold by Modesta Feria to appellant and appellee were different from each other, appellant
acquired title by prescription to the land conveyed to appellee..

A comparison between the boundaries of the parcel of land sold under pacto de retro by Modesta Feria to
appellee, on one hand, and the boundaries of the land which the same vendor has claimed to have sold to
appellant on April 6, 1940, on the other, shows conclusively that they are different ...."(Emphasis supplied)

This finding of non-identity is conclusive, and, as a matter of fact, appellant does not question it. His assignment of
error center on the ruling of the appeals court disallowing his claim of title by adverse possession.

Admittedly, there is nothing in the answer which alleges, directly or indirectly, that petitioner acquired by prescription
the land subject-matter of the complaint. On the contrary, petitioner expressly asserted that he bought it from the
same vendor in a deed of sale with right of repurchase (Exhibit 9). For this reason, the Court of Appeals refused to
consider the defense of adverse possession.

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this
Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this
stipulation of facts. 1äwphï1.ñët

Petitioner Diñoso complains that the Court of Appeals erred in so holding, and invokes in his behalf Recolectos vs.
Crisostomo, 32 Phil. 248, wherein it was held that adverse possession can be set up by a defendant under a general
denial.

This argument does not take into account that general denials have been abolished by the present Rules of Court,
and a defendant is now required to allege all his defenses, both negative and positive, by specific denials and pleas in
avoidance (Rule 9, secs. 6, 7, and 8), disclosing the true facts in order to prevent surprise and unfair advantage.
Explains Moran (Rules of Court, 1957, Vol. 1, p. 158):

The purpose of requiring the defendant to make a specific denial is to make him disclose the matters alleged
in the complaint which he sincerely intends to disprove at the trial, together with the matters which he relies
upon to support the denial. Under the old procedure, the defendant was allowed to conceal, under a general
denial, the true facts of his case, and at the same time compel the proving of facts alleged in the complaint
which he, at the trial, does not even attempt to dispute. He was thus given the advantage, doubly unfair, of
presenting his true facts only at the trial as a surprise to the plaintiff and of compelling the latter to incur
unnecessary expenses for proving facts not really disputed by him. The new system of specific denial
removes this unfair advantage, unnecessary expenses and waste of time, by compelling both parties to lay
their cards on the table, thus reducing the controversy to its terms ....

28
In his answer filed in the court or origin, petitioner-appellant Diñoso specifically denied respondent Fontillas' claim of
ownership, and alleged that he was the true owner in fee simple of the land in question by virtue of the consolidation
of the title conveyed to him under pacto de retro by Modesta Feria:

2. That he denies specifically paragraph 2 of the complaint, for the fact is: it is the defendant who is the owner
in fee simple, the ownership having been consolidated in said defendant by virtue of a Deed of Sale with right
to repurchase executed by and between the defendant and the former owner thereof, Modesta Feria, on April
6, 1940; which date is much earlier than the supposed date of the instrument alleged by the plaintiff to have
been executed. The right to repurchase under the instrument executed by and between the defendant and
Modesta Feria had not been exercised by the Vendor a Retro within the time stipulated, thus making the
defendant the absolute owner of the propertyin question, rather than the plaintiff whose right, if any is based
on a later instrument the genuineness and due execution of which is, by the way, not admitted by the
supposed Vendor a Retro, Modesta Feria;

Diñoso never pleaded that irrespective of that conveyance, and regardless of whether his deed covered the disputed
land or not, he had held it adverselyfor more than ten years, as required by the applicable law (Act 190, sec. 41).

The express pleading of the sole defense of conveyance from the former owner would make it unfair to admit the
inconsistent claim of adverse possession that Diñoso had not interposed below, as it would deprive respondent
Fontillas of the opportunity to counter said defense by proving that the petitioner's occupancy did not comply with all
the requirement of law, for example, that it lacked hostility, openness, or continuity. In other words, the failure to plead
adverse possession has misled the respondent (plaintiff below) into assuming that petitioner relied exclusively on the
sale to him by Modesta Feria (which the Court of Appeals found to have referred to another piece of land,) and
appellant should be barred from asserting adverse possession, involving as it does a complete change of theory from
that upon which the case was tried.

We further agree with the appeals court that the possession of petitioner Diñoso under the sale a Retro, Exhibit "1",
did not actually become hostile or advance until the expiration of the redemption period, since until then he recognized
the superior right of the vendor to oust him, and his claim of ownership was not absolute. Authorities are to the effect
that —

Where the sale is subject to the owner's right of redemption, the purchaser's possession has been held in
subordination to the title of the owner prior to the expiration of the redemption period, although it may become
hostile thereafter. (2 C.J.S., p. 664, sec. 113; Morse vs. Seibold, 35 N.W. 471)

It was incumbent upon the petitioner to show when his vendor's right of redemption expired, and that he had held
adversely for ten years thereafter. In truth, his own deed (Exhibit "1") recites that Feria's right of repurchase would
expire only on 6 April 1950, so that the present suit for recovery hasbegun, in 1952, well within the prescription
period..

As to the amount of damages suffered, the same is a question of fact not reviewable by this Court.

WHEREFORE, the decision of the Court of Appeals is hereby affirmed, with costs against petitioner Lupo Diñoso.

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Barrera, Regala and Makalintal, JJ., concur.
Labrador and Dizon., JJ., took no part.

LUPO L. DIÑOSO, petitioner,
vs.
COURT OF APPEALS and ANTONIO P. FONTILLAS, respondents.

29
Cesar B. Villanueva and Luperio F. Villanueva for petitioner.
Nicolas C. Adolfo for respondents.

REYES, J.B.L., J.:

Appeal by certiorari from a decision of the Court of Appeals (CA-G.R. No. 23886-R, 30 June 1960) affirming a
judgment rendered by the Court of First Instance of Zambales. As found by respondent court the facts are:

On December 18, 1944 appellee (Antonio D. Fontillas) bought from Modesta Feria four parcels of land, three
of which were located in San Narciso, Zambales, and the fourth — the lot in question — in sitio Cawatan
Kiling, Cabangan, Zambales (Exhibit A.) The vendor was given the right repurchase the properties on or
before December 1, 1945. As she failed to exercise her right, the vendee consolidated his ownership and
registered the deed of sale of option to repurchase in accordance with Act 3344 on January 10, 1946.
However, he failed to take possession thereof when the present action was commenced on September 4,
1952.

It also appears that on April 6, 1940, Modesta Feria executed in favor of appellant the pacto de retro sale
Exhibit 1 which was registered only on May 25, 1948. After the sale appellant took possession of the land in
question and was still in possession thereof when the present action was commenced on September 4, 1952.

Notwithstanding the numerous questions raised by appellant in the eight assignments of error submitted in his
brief, we believe that only two questions are decisive of this case. The first is whether or not the land sold by
Modesta Feria to appellee is the same parcel of land sold to appellant; and the second is whether, assuming
that the properties sold by Modesta Feria to appellant and appellee were different from each other, appellant
acquired title by prescription to the land conveyed to appellee..

A comparison between the boundaries of the parcel of land sold under pacto de retro by Modesta Feria to
appellee, on one hand, and the boundaries of the land which the same vendor has claimed to have sold to
appellant on April 6, 1940, on the other, shows conclusively that they are different ...."(Emphasis supplied)

This finding of non-identity is conclusive, and, as a matter of fact, appellant does not question it. His assignment of
error center on the ruling of the appeals court disallowing his claim of title by adverse possession.

Admittedly, there is nothing in the answer which alleges, directly or indirectly, that petitioner acquired by prescription
the land subject-matter of the complaint. On the contrary, petitioner expressly asserted that he bought it from the
same vendor in a deed of sale with right of repurchase (Exhibit 9). For this reason, the Court of Appeals refused to
consider the defense of adverse possession.

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this
Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this
stipulation of facts. 1äwphï1.ñët

Petitioner Diñoso complains that the Court of Appeals erred in so holding, and invokes in his behalf Recolectos vs.
Crisostomo, 32 Phil. 248, wherein it was held that adverse possession can be set up by a defendant under a general
denial.

This argument does not take into account that general denials have been abolished by the present Rules of Court,
and a defendant is now required to allege all his defenses, both negative and positive, by specific denials and pleas in
avoidance (Rule 9, secs. 6, 7, and 8), disclosing the true facts in order to prevent surprise and unfair advantage.
Explains Moran (Rules of Court, 1957, Vol. 1, p. 158):

The purpose of requiring the defendant to make a specific denial is to make him disclose the matters alleged
in the complaint which he sincerely intends to disprove at the trial, together with the matters which he relies
upon to support the denial. Under the old procedure, the defendant was allowed to conceal, under a general
denial, the true facts of his case, and at the same time compel the proving of facts alleged in the complaint
which he, at the trial, does not even attempt to dispute. He was thus given the advantage, doubly unfair, of
presenting his true facts only at the trial as a surprise to the plaintiff and of compelling the latter to incur
unnecessary expenses for proving facts not really disputed by him. The new system of specific denial
removes this unfair advantage, unnecessary expenses and waste of time, by compelling both parties to lay
their cards on the table, thus reducing the controversy to its terms ....

30
In his answer filed in the court or origin, petitioner-appellant Diñoso specifically denied respondent Fontillas' claim of
ownership, and alleged that he was the true owner in fee simple of the land in question by virtue of the consolidation
of the title conveyed to him under pacto de retro by Modesta Feria:

2. That he denies specifically paragraph 2 of the complaint, for the fact is: it is the defendant who is the owner
in fee simple, the ownership having been consolidated in said defendant by virtue of a Deed of Sale with right
to repurchase executed by and between the defendant and the former owner thereof, Modesta Feria, on April
6, 1940; which date is much earlier than the supposed date of the instrument alleged by the plaintiff to have
been executed. The right to repurchase under the instrument executed by and between the defendant and
Modesta Feria had not been exercised by the Vendor a Retro within the time stipulated, thus making the
defendant the absolute owner of the propertyin question, rather than the plaintiff whose right, if any is based
on a later instrument the genuineness and due execution of which is, by the way, not admitted by the
supposed Vendor a Retro, Modesta Feria;

Diñoso never pleaded that irrespective of that conveyance, and regardless of whether his deed covered the disputed
land or not, he had held it adverselyfor more than ten years, as required by the applicable law (Act 190, sec. 41).

The express pleading of the sole defense of conveyance from the former owner would make it unfair to admit the
inconsistent claim of adverse possession that Diñoso had not interposed below, as it would deprive respondent
Fontillas of the opportunity to counter said defense by proving that the petitioner's occupancy did not comply with all
the requirement of law, for example, that it lacked hostility, openness, or continuity. In other words, the failure to plead
adverse possession has misled the respondent (plaintiff below) into assuming that petitioner relied exclusively on the
sale to him by Modesta Feria (which the Court of Appeals found to have referred to another piece of land,) and
appellant should be barred from asserting adverse possession, involving as it does a complete change of theory from
that upon which the case was tried.

We further agree with the appeals court that the possession of petitioner Diñoso under the sale a Retro, Exhibit "1",
did not actually become hostile or advance until the expiration of the redemption period, since until then he recognized
the superior right of the vendor to oust him, and his claim of ownership was not absolute. Authorities are to the effect
that —

Where the sale is subject to the owner's right of redemption, the purchaser's possession has been held in
subordination to the title of the owner prior to the expiration of the redemption period, although it may become
hostile thereafter. (2 C.J.S., p. 664, sec. 113; Morse vs. Seibold, 35 N.W. 471)

It was incumbent upon the petitioner to show when his vendor's right of redemption expired, and that he had held
adversely for ten years thereafter. In truth, his own deed (Exhibit "1") recites that Feria's right of repurchase would
expire only on 6 April 1950, so that the present suit for recovery hasbegun, in 1952, well within the prescription
period..

As to the amount of damages suffered, the same is a question of fact not reviewable by this Court.

WHEREFORE, the decision of the Court of Appeals is hereby affirmed, with costs against petitioner Lupo Diñoso.

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Barrera, Regala and Makalintal, JJ., concur.
Labrador and Dizon., JJ., took no part.

BALDOMERA FOCULAN-FUDALAN, Petitioner, v. SPOUSES DANILO OCIAL AND DAVIDICA BONGCARAS-

OCIAL, EVAGRIA F. BAGCAT, CRISTINA G. DOLLISEN, EULALIA F. VILLACORA, TEOFREDO FUDERANAN,
JAIME FUDERANAN, MARIANO FUDERANAN, FILADELFO FUDERANAN, MUSTIOLA F. MONTEJO, CORAZON
LOGMAO, DIONESIO FUDERANAN, EUTIQUIA FUDERANAN, ASTERIA FUDERANAN, ANTONIO FUDERANAN,
31
 ROMEO FUDERANAN, FLORENTINO FUDERANAN, DOMECIANO FUDERANAN, ERLINDA SOMONTAN,
FELICIANA FUDERANAN, BONIFACIO FUDERANAN, QUIRINO FUDERANAN, MA. ASUNCION FUDERANAN,
MARCELINA ARBUTANTE, SALOME GUTUAL, LEONARDO LUCILLA, IMELDA L. ESTOQUE, CIRILA
OLANDRIA, TITA G. BONGAY AND MUNICIPAL ASSESSOR OF PANGLAO, BOHOL, Respondents.

DECISION

MENDOZA, J.:

Before this Court is a petition for review under Rule 45 of the Rules of Court assailing the November 5, 2009
Resolution1 of the Court of Appeals (CA), in CA-G.R. CEB-CV No. 01733, which granted the respondents' "Urgent
Motion to Dismiss Appeal,"2 dated September 23, 2009, on the ground that petitioner Baldomera Foculan-Fudalan
(Baldomera) failed to file her appellant's brief within the non-extendible period of forty-five (45) days; and the October
26, 2010 Resolution3 which denied her "Omnibus Motion for Reconsideration of the Resolution dated November 5,
2009, with Leave of Court to Admit Appellant's Brief for the Intervenor-Third Party Plaintiff."4chanrobleslaw

The Antecedents

The present controversy began when the spouses Danilo Ocial and Davidica Bongcaras-Ocial (Spouses Ocial),
represented by their Attorney-in-Fact, Marcelino Bongcaras, filed an action for the declaration of validity of partition
and sale, recovery of ownership and possession and damages against Flavio Fudalan (Flavio) and Cristobal Fudalan
(Cristobal) before the Regional Trial Court, Branch 3, Tagbilaran City (RTC), docketed as Civil Case No. 6672.

Later, Baldomera, the wife of Flavio and mother of Cristobal, intervened as 3rd party plaintiff against third-party
defendants, Heirs of Pedro and Ulpiano Fuderanan (the Fuderanans), the predecessors-in-interest of Spouses Ocial.

The subject of the said action was a parcel of land designated as Cad. Lot No. 56-A located at Tangnan, Panglao,
Bohol, which was a portion of Lot No. 56, Cad 705-D, Panglao Cadastre, in the name of Juana Fuderanan (Juana).

Spouses Ocial alleged in their complaint5 that on March 13, 2001, the heirs of Juana executed the Extrajudicial
Settlement Among Heirs with Simultaneous Deed of Absolute Sale over Lot 56-A including two (2) fruit bearing mango
trees in their favor as lawful vendees; that as the new owners of the subject land, they caused the planting of thirty
(30) gemelina seedlings, twenty (20) mahogany seedlings, and two (2) mango seedlings, and in October 2001, they
claimed the landowner's share of the mango produce from Maximo Bolongaita who had been taking care of the two
(2) fruit-bearing mango trees; that in October 2001, they caused the placement of a "no-trespassing" sign on one of
the mango trees; that they also caused the processing of the Deed of Extrajudicial Settlement Among Heirs with
Simultaneous Sale for the cancellation of Tax Declaration No. 93-009-00247 and the issuance of a new tax
declaration in their favor; that in June 2001, the Fudalans, without any lawful right or authorization, surreptitiously
planted "ubi" on a portion of Lot No. 56-A and they also claimed the landowner's share of the mango produce from
Maximo Bolongaita who refused to give the same and instead deposited the amount in a bank in Tagbilaran City; that
in November 2001, the Fudalans illegally placed two "no-trespassing" signs inside the questioned property; that for
this reason, they complained to the barangay captain of Tangnan, Panglao, Bohol, who conducted conciliation
proceedings on November 14 and 29, 2001; that no settlement was reached between the parties; that the Office of the
Lupong Tagapamayapa later on issued the Certification to File Action; and that they learned that on December 14 and
15, 2001, while the Lupong Tagapamayapa had not yet issued the required Certification to File Action, the Fudalans
unjustifiably caused the installation of a fence consisting of barbed wires with cemented posts around Lot No. 56-A,
without the necessary permit from the barangay captain of Tangnan and the municipal officials of Panglao,
Bohol.6chanrobleslaw

The Fudalans, on the other hand, claimed that they were the rightful owners of the subject land having purchased the
same from the Fuderanans on November 4, 1983; that the sale was evidenced by a private document printed in
a blue paper; that as owners, they planted "ubi," posted two "no-trespassing" signs and installed a barb wire fence
around the land; that since their purchase, they had been in possession of the land in the concept of owners and had
been paying the real property taxes religiously; and that it was for this reason that they insisted that if there was any
deed of extrajudicial settlement of estate and simultaneous sale of the land by the Fuderanans, the same was null and
void for being without legal basis.7chanrobleslaw

On May 6, 2002, Baldomera filed, with leave of court, an Answer in Intervention with Third-Party Complaint against the
Fuderanans for specific performance, quieting of title and nullification of the deed of extra-judicial settlement with
simultaneous sale in favor of Spouses Ocial. She alleged therein that, although still declared in the name of the late
Juana Fuderanan, the property was absolutely owned by her parents, the late Spouses Eusebio Fucolan and Catalina
Bolias,8 who acquired the property in 1935 and thereafter took actual possession of the land. She averred that the
possession was continuous, peaceful, open, public, adverse, and in the concept of an owner which was never

32
disturbed by any person until Spouses Ocial, through their Attorney-in-Fact, informed the Fudalans and Baldomera
that they had already bought the land from the Fuderanans.9chanrobleslaw

Baldomera also claimed that sometime in 1983, two of the Fuderanans, Teofredo and Eutiquia, approached her and
her husband. They represented themselves as the duly authorized representatives of their coheirs and agreed to
settle their claims over the subject lot in their favor for the amount of P1,000.00. This agreement was evidenced by a
memorandum, dated November 4, 1983.10chanrobleslaw

Baldomera further claimed that in the year 2000, a certain Salome Getual, supposedly another heir of Juana, told her
that all the heirs of Juana were claiming their rights of inheritance over the land but were willing to enter into a
settlement if the price would be acceptable. Unfortunately, no agreement was reached which prompted Spouses Ocial
to file an action before the barangay chairman of the place where the property was situated. A mediation proceeding
was conducted between the parties where an amicable settlement was reached. Baldomera agreed to pay the
Fuderanans the amount of P50,000.00 as purchase price of the lot. The latter, however, did not comply with their
obligation in the agreed settlement. Instead, they sold the land to Spouses Ocial for P20,000.00.11chanrobleslaw

The RTC Decision

On August 22, 2006, the RTC rendered a Decision,12 confirming the validity of the extrajudicial settlement with
simultaneous sale, thus, recognizing the right of the third-party defendants, the Fuderanans, to sell the land in
question to the Spouses Ocial. The trial court explained its conclusion in this wise:chanRoblesvirtualLawlibrary
After a perusal of the evidence, the Court acknowledges the right of third party defendants Heirs of Pedro and Ulpiano
Fuderanan to sell the land in question to plaintiffs Ocial spouses and upholds the validity of the sale. The claim of
intervenor Baldomera Fucolan-Fudalan that the land was purchased by her parents from Juana Fuderanan in 1935 is
not only doubtful being oral but more than that, it is unenforceable under the Statute of Frauds as provided in Art.
1403 (e) of the Civil Code, as follows:chanRoblesvirtualLawlibrary
"Art. 1403. The following contracts are unenforceable, unless they are ratified:ChanRoblesVirtualawlibrary

xxxx

(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest
therein;
No efforts were exerted by the intervenor and her predecessor parents for the ratification of the sale despite the lapse
of considerable time so that their failure and neglect to do it amounts to laches and equitable estoppel on their part to
lay claim of ownership of the land. Furthermore, upon a perusal of the tax declarations of the land from 1940 to 1985
the administrators mentioned therein were Modesta Bongcaras, Ulpiano Fuderanan and Leoncia Estoreras, who took
turn in its administration. There was no mention of the predecessor parents of Baldomera as one of the administrators
which would only fairly suggest that they were never in possession of the land. It was only in 1994 when Flavio
Fudalan came to be named as its administrator per TD-93-009-00247 evidently after the execution of the blue
paper receipt of P1,000.00 by Teofredo and Teofista Fuderanan in their favor. And it was also only then that
the Fudalans started paying taxes thereto, as shown by the numerous receipts submitted. Thus, the parents
of Baldomera could not have paid taxes to the land before that period for being not in actual possession of
the land contrary to their claim. It could be for this reason that defendants and intervenor agreed to buy the
land from the heirs of Pedro and Ulpiano Fuderanan to whom the land was adjudicated which act was
tantamount to an abandonment of their claim.

xxx Besides, it is to be noted from the testimony of Baldomera Fucolan-Fudalan in her direct examination on July 13,
2005 when she acknowledged that the amount of P1,000.00 as mentioned in the blue paper receipt was not actually a
payment of the land but was given to Toribio and Juana Fuderanan as a consideration for them to prepare the deed of
sale for the land in their favor but to which the latter did not comply. Instead, they filed a complaint along with the other
heirs before the barangay captain of Tangnan, Panglao, Bohol for the repossession and partition of the property
among the heirs. This admission of Baldomera Fucolan-Fudalan is credible for the amount of P1,000.00 is grossly
inadequate to be a consideration for the sale of the whole lot of 7,334 sq. m. or even for the combined shares of
Teofredo and Teofista of their common property of 1,018 sq. m. Furthermore, the alleged agreement was not signed
by the parties as required by the Local Government Code for its validity and no time or period was set for its
compliance, thus, leaving it to the Fudalans the choice as to when they would pay the purchase price of the land
which is against the provision of Art. 1308 of the Civil Code on the qualifications of a valid contract.

On the alleged promise of the heirs of Pedro and Ulpiano Fuderanan to sell the property to defendants Fudalan for
P50,000.00 as shown in the minutes of the mediation proceedings before the barangay captain of Tangnan, Panglao,
Bohol of which they did not comply, there is no evidence of tender of payment made by the defendants. In fact, in the
testimony of Maria Salome Gutual in the witness stand during her cross-examination on March 10, 2003 which was
not refuted by defendants, the Fudalans did not allegedly comply with their promise to buy the land, and instead, they
even signified refusal to pay it claiming that they had already bought it from Teofredo and Teofista Fuderanan so that
33
the heirs of Pedro and Ulpiano Fuderanan were forced to sell the land to herein plaintiffs Ocial spouses. Their act of
selling the land to the plaintiffs was therefore justified as it was the defendants who first reneged from their agreement.
Moreover, as there was no tender of payment or earnest money given by defendants as a consideration therefor, no
contract to sell was perfected that would bind the parties to it (Art. 1479, par. 2, Civil Code) nor is there any basis for
an action of specific performance which defendants only initiated lately upon the filing of the third-party
complaint.13chanrobleslaw

[Emphasis Supplied]
Consequently, the Fudalans and Baldomera were ordered to vacate the subject land. Thus, the decretal portion of the
decision reads:chanRoblesvirtualLawlibrary
WHEREFORE, in view of all the foregoing, the Court hereby confirms the Deed of Extra-Judicial Settlement with
Simultaneous Sale executed by the Heirs of Pedro Fuderanan and Ulpiano Fuderanan of Lot 56-A to herein plaintiffs
Danilo Ocial and Davidica Bongcaras-Ocial as one valid and enforceable. Consequently, herein defendants Flavio
Fudalan, Cristobal Fudalan and Intervenor Baldomera Fucolan-Fudalan are hereby ordered to vacate from the
premises of Lot 56-A CAD 705-D of Panglao Cadastre which is located at barangay Tangnan, Panglao, Bohol having
an area of 6,316 sq. m. Furthermore, defendants and intervenor are hereby ordered to pay jointly and severally
reasonable attorney's fee in the amount of P30,000.00 and the costs of the proceedings which shall earn legal interest
from the filing of the complaint until the same shall have been fully paid. The landowner shares of the fruits of the two
mango trees which are deposited in the bank are hereby adjudicated to plaintiffs if the same are found to be within Lot
56-A.

SO ORDERED.14
Not in conformity, the Fudalans and Baldomera filed their respective notices of appeal with the trial court.

The CA Decision

On March 18, 2009, upon receipt of the records, the CA issued a Resolution,15 requiring the Fudalans and Baldomera,
as well as Spouses Ocial; and Evagra F. Bagcat, as third-party defendants, to file their respective briefs within the
non-extendible period of forty-five (45) days.

In their Urgent Motion to Dismiss Appeal, dated September 23, 2009, Spouses Ocial prayed for the dismissal of the
appeal for failure of the appellants to file the required appellants' brief within the prescribed non-extendible period of
45 days.

Acting thereon, the CA granted the motion and dismissed the appeal in its November 5, 2009 Resolution, which in its
entirety reads:chanRoblesvirtualLawlibrary
Finding merit in appellee's Urgent Motion to Dismiss Appeal dated September 23, 2009, citing as ground therein
appellants' failure to file their respective appeal briefs within the non-extendible period required under Resolution,
dated March 18, 2009, the court resolves to grant the same. Accordingly, the case is considered closed and
terminated.

SO ORDERED.16
Baldomera filed her Omnibus Motion for Reconsideration of the Resolution dated November 5, 2009 with Leave of
Court to Admit Appellant's Brief for the Intervenor-Third Party Plaintiff. On October 26, 2010, however, the CA issued
another resolution denying her motion, to wit:chanRoblesvirtualLawlibrary
WHEREFORE, the Omnibus Motion for Reconsideration of the Resolution dated November 5, 2009 with Leave of
Court to Admit Appellant's Brief for the Intervenor-Third Party Plaintiff is DENIED.

SO ORDERED.17
According to the CA, "[b]laming the failure to file the required brief on counsel's heavy workload, on the mistake or
ignorance of his client, and excusable neglect on his part is not acceptable."18 What happened was simply the
negligence of the counsel in the monitoring of notices and resolutions from the courts. The attendant circumstances
did not make a case of gross negligence that would fall under the exception to the rule that the inadvertence of
counsel could be considered as an adequate excuse to call for the court's leniency. The CA further stated that "the
delay in the filing of the brief, 206 days after the last day to file the same which is May 22, 2009, is unreasonably
long."19chanrobleslaw

Hence, this petition.

Petitioner Baldomera states, among others, that the main reason for the late filing of the appellant's brief was both her
mistake and simple negligence and that of her counsel; and that the CA should have been lenient in the application of
technical rules in resolving the appeal considering their peculiar situation.

34
Spouses Ocial, on the other hand, counter that the CA was correct in denying the omnibus motion for reconsideration
because the records were bereft of any factual justification for Baldomera's failure to file the required appellant's brief.
Furthermore, even granting arguendo, that the CA gravely abused its discretion in promulgating the November 5,
2009 and October 26, 2010 Resolutions, still the subject petition must be dismissed because abuse of discretion is not
among the allowable grounds for a petition for review under Rule 45 to prosper.

The Court's Ruling

The Court finds the petitioner's contention wanting in merit.

There was inexcusable negligence where a brief was filed 206 days late

It appears from the record that the counsel for Baldomera received a copy of the March 18, 2009 CA Resolution on
April 7, 2009, thus, giving him until May 22, 2009 to file the appellant's brief; that he did not file any motion for
extension of the period to file the brief; that he did not file either a comment or opposition to the Urgent Motion to
Dismiss Appeal, filed by Spouses Ocial on September 24, 2009, a copy of which he was furnished by mail; and that
he filed the brief for his client only at the time he filed the omnibus motion for reconsideration on December 14, 2009,
or 206 days late.20chanrobleslaw

In this regard, Section 1 (e), Rule 50 of the Rules of Court succinctly provides that:chanRoblesvirtualLawlibrary
Section l. Grounds for dismissal of appeal. - An appeal may be dismissed by the Court of Appeals, on its own motion
or on that of the appellee, on the following grounds:ChanRoblesVirtualawlibrary

xxxx

(e) Failure of the appellant to serve and file the required number of copies of his brief or memorandum within the time
provided by these Rules; x x x
Baldomera posits that it was erroneous for the CA to dismiss her appeal on the ground that she failed to file her
appellant's brief on time. She cited the case of Sebastian v. Morales21 where it was written that liberal construction of
the rules is the controlling principle to effect substantial justice.

Nevertheless, the Court in the same case made qualifications with respect to the application of the said principle. It
was held therein,
Litigation is not a game of technicalities, but every case must be prosecuted in accordance with the prescribed
procedure so that issues may be properly presented and justly resolved. Hence, rules of procedure must be faithfully
followed except only when for persuasive reasons, they may be relaxed to relieve a litigant of an injustice not
commensurate with his failure to comply with the prescribed procedure. Concomitant to a liberal application of
the rules of procedure should be an effort on the part of the party invoking liberality to explain his failure to abide
by the rules.22chanrobleslaw

[Emphases and Underscoring Supplied]

In other words, procedural rules are not to be belittled or dismissed simply because their non-observance may have
resulted in prejudice to a party's substantive rights. Like all rules, they are required to be followed except only for the
most persuasive of reasons when they may be relaxed to relieve a litigant of an injustice not commensurate with the
degree of his thoughtlessness in not complying with the procedure prescribed.23 Besides, as the oft quoted quip would
put it, the bare invocation of "in the interest of substantial justice" is not a magic wand that will automatically compel
this Court to suspend procedural rules.24chanrobleslaw

Although the authority of the CA to dismiss an appeal for failure to file the appellant's brief is a matter of judicial
discretion, a dismissal based on this ground is neither mandatory nor ministerial; the fundamentals of justice and
fairness must be observed, bearing in mind the background and web of circumstances surrounding the
case.25chanrobleslaw

Petitioner's assertion that her counsel is partly to be blamed for her legal predicament is not persuasive. Indeed, there
have been myriad of instances when the Court has relaxed the rule on the binding effect of counsel's negligence and
allowed a litigant another chance to present his case, to wit: (1) where the reckless or gross negligence of counsel
deprives the client of due process of law; (2) when application of the rule will result in outright deprivation of the client's
liberty or property; or (3) where the interests of justice so require. Unfortunately, none of these exceptions obtain
here.26chanrobleslaw

For a claim of counsel's gross negligence to prosper, nothing short of clear abandonment of the client's cause must be
shown. Here, petitioner's counsel failed to file the appellant's brief. While this omission can plausibly qualify as simple

35
negligence, it does not amount to gross negligence to justify the annulment of the proceeding.27chanrobleslaw

Baldomera herself should have exerted some efforts to inquire as to the status of her appeal. She should not have
been complacent. "While this Court has recognized that a non-lawyer litigant is not expected to be familiar with the
intricacies of the legal procedures, a layman nonetheless must not be allowed to conveniently profit from his
improvident mistakes. Thus, it has been equally stressed that litigants represented by counsel should not expect that
all they need to do is sit back, relax and await the outcome of the case; instead, they should give the necessary
assistance to their counsel for what is at stake is ultimately their interest."28chanrobleslaw

Even on the merits, the petition must fail

Even on the merits, the petitioner's quest must fail.

In essence, Baldomera claims that because they have been in adverse possession for the requisite period, their
possession has now ripened into ownership through acquisitive prescription.

Baldomera's argument fails to convince the Court.

Prescription, as a mode of acquiring ownership and other real rights over immovable property, is concerned with lapse
of time in the manner and under conditions laid down by law, namely, that the possession should be in the concept of
an owner, public, peaceful, uninterrupted, and adverse. Acquisitive prescription of real rights may be ordinary or
extraordinary. Ordinary acquisitive prescription requires possession in good faith and with just title for 10
years.29 When the Court speaks of possession in "good faith," it consists in the reasonable belief that the person from
whom the thing is received has been the owner thereof, and can transmit his ownership. There is "just title," on the
other hand, when the adverse claimant comes into possession of the property through one of the modes recognized
by law for the acquisition of ownership or other real rights, but the grantor is not the owner or cannot transmit any
right.30chanrobleslaw

In the present controversy, aside from Baldomera's bare allegation that her family had been in possession of the
subject property since it was sold to her parents, no other evidence, documentary or otherwise, showing that the title
to the subject property was indeed transferred from Juana to her parents was presented. In fact, she never denied that
the tax declaration of the property was still in the name of Juana Fuderanan. As such, for lack of "just title," she could
not have acquired the disputed property by ordinary prescription through possession often (10) years. Occupation or
use alone, no matter how long, cannot confer title by prescription or adverse possession unless coupled with the
element of hostility towards the true owner, that is, possession under the claim of title.31chanrobleslaw

Even the allegation that sometime on November 4, 1983, a blue paper was executed wherein Teofredo and Eutiquia,
allegedly the duly authorized representatives of the heirs of Juana to settle their claims over the land, acknowledged
to have received the sum of P1,000.00,32 cannot be considered a valid basis for a possession in good faith and just
title. The alleged agreement which is, at best, a compromise agreement cannot be made as the foundation of a
conclusion that Baldomera is a possessor in good faith and with just title who acquired the property through ordinary
acquisitive prescription. By the nature of a compromise agreement, which brings the parties to agree to something that
neither of them may actually want, but for the peace it will bring them without a protracted litigation, no right can arise
therefrom because the parties executed the same only to buy peace and to write finis to the controversy. It did not
create or transmit ownership rights over the subject property.33chanrobleslaw

That being settled, the next question now is: Can Baldomera acquire the property through extraordinary acquisitive
prescription?

The Court is still constrained to rule in the negative.

In extraordinary prescription, ownership and other real rights over immovable property are acquired through
uninterrupted adverse possession for 30 years even without need of title or of good faith.34chanrobleslaw

As observed by the trial court,

There was no mention of the predecessor parents of Baldomera as one of the administrators which would only fairly
suggest that they were never in possession of the land. It was only in 1994 when Flavio Fudalan came to be
named as its administrator per TD-93-009-00247 evidently after the execution of the blue paper receipt of
P1,000.00 by Teofredo and Teofista Fuderanan in their favor. And it was only then that the Fudalans started
paying taxes thereto, as shown by the numerous receipts submitted. Thus, the parents of Baldomera could
not have paid taxes to the land before that period for being not in actual possession of the land contrary to
their claim. It could be for this reason that defendants and intervenor agreed to buy the land from the heirs of Pedro
and Ulpiano Fuderanan to whom the land was adjudicated which act was tantamount to an abandonment of their
claim.35
36
Taking cue from the foregoing, Baldomera's alleged possession could not have amounted to an ownership by way of
extraordinary acquisitive prescription. According to the factual findings of the trial court, it was only in 1994 that her
husband, Flavio was named administrator; that it was also then that they started paying taxes; and that it was also
then that they started occupying the subject property. This observation of the trial court was contrary to her assertion
that they had been paying taxes and had been in possession of the land even before the said period. On this note, the
thirty-year period would only be completed in the year 2024. Also, the records would reveal that as early as November
2001, her possession was effectively interrupted when Spouses Ocial filed a complaint before the barangay captain of
Tangnan, Panglao, Bohol, where conciliation proceedings were held although no settlement was
reached.36chanrobleslaw

Finally, Baldomera also assails the jurisdiction of the RTC over the case. According to her, since the action involves
ownership and possession of real property, jurisdiction is determined by the assessed value of the property in
contention. Considering that the assessed value of Lot 56-A was only P1,930.00 as indicated in Tax Declaration No.
93-009-00247, it should have been the first level court, and not the RTC, which should have exercised jurisdiction to
hear actions involving title to, or possession of real property or any interest in it, as provided in Sections 19 and 33
of Batas Pambansa (B.P.) 129, as amended.37chanrobleslaw

This argument cannot be sustained.

Even if the Court would treat the complaint filed by Spouses Ocial as falling under the jurisdiction of the first level court
under Sec. 33 of B.P. 129, as the assessed value was way below the P20,000.00 threshold, still Baldomera's
postulation that it is the first level court, and not the RTC, which has jurisdiction, would not hold water. As observed,
Baldomera had voluntarily participated in the proceedings before the RTC and aggressively defended her position.
Although she questioned the jurisdiction of the trial court as early as in the trial level, she actively participated in the
proceeding when she filed an ANSWER IN INTERVENTION WITH THIRD-PARTY COMPLAINT38 where she
interposed counterclaims, and asked for affirmative reliefs. Simply put, considering the extent of her participation in
the case, she is estopped from invoking lack of jurisdiction as a ground for the dismissal of the action.39chanrobleslaw

WHEREFORE, the petition is DENIED. The assailed November 5, 2009 and October 26, 2010 Resolutions of the
Court of Appeals in CA-G.R. CV No. 01733 are AFFIRMED.

SO ORDERED.cralawlawlibrary

Carpio, (Chairperson), Brion, Del Castillo, and Jardeleza,*JJ., concur.

37