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looking into the validity of the sale of land to petitioner Aznar Realty. In actions for reconveyance of property predicated on the fact that the conveyance complained of was null and void ab initio, a claim of prescription of action would be unavailing. The action or defense for the declaration of the inexistence of a contract does not prescribe. Neither could laches be invoked in the case at bar. Laches is a doctrine in equity and our courts are basically courts of law and not courts of equity. Equity, which has been aptly described as "justice outside legality," should be applied only in the absence of, and never against, statutory law. Aequetas nunguam contravenit legis. The positive mandate of Art. 1410 of the New Civil Code conferring imprescriptibility to actions for declaration of the inexistence of a contract should pre-empt and prevail over all abstract arguments based only on equity. Respondents were evicted from their land in November 1991 and they filed their complaint with the trial court on July 28, 1992. Only eight months had passed from the time they were ejected to the time they asserted their rights over their property. They certainly could not be deemed to have slept on their rights. Thus, the Court of Appeals did not err in setting aside the decision of the trial court and ordering that the case be remanded for trial.

Facts: The subject matter of this controversy is Lot No. 4397 owned by Aniceto Augusto who was married to Petrona Calipan. When Aniceto died on December 3, 1934, he left behind five children: Geronimo, Zacarias, Teoderica, Arsenia and Irenea. Apparently, the property remained undivided as evidenced by Tax Declaration No. 026794 issued to Petrona Calipan in 1945. Tax Declaration No. 02679 in the name of Calipan was cancelled pursuant to an "Extrajudicial Partition"5 executed before Notary Public Vicente Fanilag. In lieu thereof, tax declaration certificates covering Lot No. 4397 were issued to the following: Filomeno Augusto, Ciriaco Icoy, Felipe Aying, Zacarias Augusto, Abdon Augusto, Teoderica Augusto, Pedro Tampus and Anacleto Augusto. These persons sold the property to petitioner Aznar Brothers Realty Company (Aznar Realty) through a Deed of Sale of Unregistered Land. Respondent Heirs filed Civil Case No. 2666-L against petitioner Aznar Realty, and Carlos and Filomeno Augusto in the RTC of Lapu-Lapu City, Branch 27, for (1) recovery of Lot No. 4397; (2) the declaration of the Deed of Sale dated February 13, 1962 as null and void; (3) the recognition of the Heirs; (4) the cancellation of the TCT issued to petitioner Aznar Realty and (5) the issuance of a restraining order and/or writ of preliminary injunction. Aznar Realty filed an answer interposing the defense of lack of cause of action and prescription. It asked for a preliminary hearing on the affirmative defenses as if a motion to dismiss had been filed. This was granted by the trial court. Issue: Whether or Not the action was barred by prescription? Ruling: Pet.is without merit, claim is imprescriptible. Respondents anchored their action for reconveyance in the trial court on the nullity of the Deed of Sale between petitioner Aznar and the supposed owners of the property. Respondents impugned the validity of the document because the sellers were not the true owners of the land. Respondents sought the declaration of nullity (inexistence) of the Deed of Sale because of the absence of their consent as the true and lawful owners of the land. They argued that the sale to petitioner Aznar was void since the purported "owners" who signed the Deed of Sale as vendors were not even heirs of Aniceto Augusto and Petrona Calipan. They pointed out that the 1945 Tax Declaration in the name of Petrona Calipan indicated that the property was undivided as of the time Aniceto Augusto died in 1932. The "owners" who sold the land to petitioner Aznar Realty could not have been the true owners of the land since there was no showing how they acquired the land in the first place. Thus, the trial court should not have dismissed the complaint without

CAPITLE VS VDA DE GABAN Facts: Julians brother Zacarias died in 1984. He was survived by the other petitioners herein, Aurora P. vda. de Correjado, Lilia Capitle, Artemio Correjado, Cecilia Correjado, Rogelia Correjado (Rogelia), Sofronio Correjado, Vicente Correjado and Gloria vda. de Beduna. On November 26, 1986, petitioners filed a complaint[1] for partition of the property and damages before the Regional Trial Court (RTC) of La Carlota City against respondents, alleging that Fabian contracted two marriages, the first with Brigida Salenda who was the mother of Julian, and the subsequent one with Maria Catahay (Maria) who was the mother of Zacarias, Manuel and Francisco; that the property remained undivided even after the death of Julian in 1950, his children-herein respondents having arrogated unto themselves the use and enjoyment of the property, to the exclusion of petitioners; and that respondents refused to deliver petitioners share in the property despite demands therefor and for partition. To the Complaint respondents countered in their Answer[2] that in the proceedings in the intestate estate of their great grandfather Santos Correjado, petitioners were not adjudicated any share in the property, for Maria, the mother of petitioners respective fathers Francisco and Zacarias, was just a mistress of Fabian, hence, Francisco and Zacarias (as well as Manuel) were illegitimate who were not entitled to inherit under the old Civil RTC dismissed the complaint upon the grounds of prescription and laches.

Issue: W/N the action has already prescribed

Ruling: ART. 1134. Ownership and other real rights over immovable property are acquired by ordinary prescription through possession of ten years. Art. 1137, New Civil Code 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. Assuming arguendo that petitioners respective fathers Francisco and Zacarias were legitimate and, therefore, were co-owners of the property: From the moment co-owner Julian occupied in 1919 and claimed to be the absolute and exclusive owner of the property and denied his brothers any share therein up to the time of his death in 1950, the question involved is no longer one of partition but of ownership in which case imprescriptibility of the action for partition can no longer be invoked. The adverse possession by Julian and his successors-ininterest- herein respondents as exclusive owner of the property having entailed a period of about 67 years at the time of the filing of the case at bar in 1986, ownership by prescription had vested in them. As for estoppel by laches which is a creation of equity,[13] since laches cannot interfere with the running of the period of prescription, absent any conduct of the parties operating as estoppel,[14] in light of the prescription of petitioners action, discussion thereof is dispensed with. Suffice it to state that while laches may not be strictly applied between near relatives, under the facts and circumstances of the case, especially the uncontroverted claim of respondents that their father Julian, and the documented claim of respondent Julieta, had paid realty taxes on the property as exclusive owner, as well as the admission of petitioner Rogelia that, as quoted above, she and her co-petitioners never benefited or were deprived of any benefits from the property since 1919 up to the time of the filing of the case in 1986 before the RTC or for a period of 67 years, despite demands therefor, even an extremely liberal application of laches would bar the filing of the case.

lot. He executed an Affidavit3 acknowledging receipt of the OCT in trust and undertook to return said title free from changes, modifications or cancellations. Arnold and Angela, nephew and daughter respectively of the Tordesillas spouses, without the knowledge of Alberta, executed a Deed of Extrajudicial Settlement4 declaring the two of them as the only co-owners of the undivided 1,198 sq. m. lot no. 265, without acknowledging their previous sale of 748 sq. m. thereof to Alberta. In 1985, vendee Alberta Morales died. Her niecesheirs, Lydia, Elsa and Dafrosa, succeeded in the ownership of the lot. Months later, as the heirs were about to leave for the United States, they asked Arnold to deliver to them the title to the land so they can register it in their name. Arnold repeatedly promised to do so but failed to deliver the title to them. On December 4, 1986, after Albertas heirs left for the States, Arnold used the OCT he borrowed from the deceased vendee Alberta Morales, subdivided the entire lot no. 265 into three sublots, and registered them all under his name, viz: lot no. 265-A (with TCT No. 16895), lot no. 265-B (with TCT No. 16896) and lot no. 265-C (with TCT No. 16897). He then paid the real estate taxes on the property. After the death of Arnold, the three (3) nieces-heirs of Alberta Morales learned about the second sale of their lot to the Occea spouses when they were notified by caretaker Abas that they were being ejected from the land. The heirs filed a case7 for annulment of sale and cancellation of titles, with damages, against the second vendees Occea spouses. In their complaint, they alleged that the Occeas purchased the land in bad faith as they were aware that the lots sold to them had already been sold to Alberta Morales in 1954. They averred that before the sale, when Tomas Occea conducted an ocular inspection of the lots, Morito Abas, the caretaker appointed by Alberta Morales to oversee her property, warned them not to push through with the sale as the land was no longer owned by vendor Arnold as the latter had previously sold the lot to Alberta Morales who had a house constructed thereon. For their part, the Occea spouses claimed that the OCT in the name of the original owners of the lots, the Tordesillas spouses, was cancelled after it was subdivided between Angela and Arnold in 1969; that new TCTs had been issued in the latters names; that they were unaware that the subject lots were already previously sold to Morales as they denied that Tomas had a talk with caretaker Abas on the matter; that as of December 4, 1987, the TCTs covering the lots were in the name of Arnold and his wife, without any adverse claim annotated thereon; that vendor Arnold represented to them that the occupants they saw on the land were squatters and that he merely tolerated their presence; that they did not personally investigate the alleged squatters on the land and merely relied on the representation of vendor Arnold; that sometime in 1966-1967, Arnold and his co-heir Angela caused the survey of the original lot and subdivided it into 3 lots, without opposition from Morales or her heirs. Thus, three (3) TCTs were issued in 1969 to Arnold and Angela and, two of the

OCCEA VS. ESPONILLA Facts: After the death of the Tordesillas spouses, the lot was inherited by their children Harod and Angela, and grandchildren Arnold and Lilia. In 1951, the heirs executed a Deed of Pacto de Retro Sale1 in favor of Alberta Morales covering the southwestern portion of the lot in 1954, Arnold and Lilia executed a Deed of Definite Sale of Shares, Rights, Interests and Participations2 over the same 748 sq. m. lot in favor of Alberta Morales. Alberta possessed the lot as owner, constructed a house on it and appointed a caretaker to oversee her property. Thereafter, in July 1956, vendor Arnold de la Flor borrowed the OCT from Alberta covering the

lots were then sold to the Occea spouses, again without objection from Alberta Morales. The Occea spouses alleged that they were buyers in good faith as the titles to the subject lots were free from liens or encumbrances when they purchased them. They claimed that in 1989, Arnold offered to sell the subject lots to them. On August 13, 1990, after they verified with the Antique Registry of Deeds that Arnolds TCTs were clean and unencumbered, Arnold signed the instrument of sale over the subject lots in favor of the Occeas for P100,000.00 and new titles were issued in their names. The Occeas likewise set up the defenses of laches and prescription. They argue that Alberta and plaintiffs-heirs were barred from prosecuting their action as they failed to assert their right for forty (40) years. Issue: Whether Or Not The Period Of More Than Forty (40) Years Without Positive Action Taken By Respondents, As Well As By Alberta Morales, To Protect Their Interest Can Be Considered Laches And Thus Their Present Action Has Prescribed Ruling: the action to annul title filed by respondentsheirs is not barred by laches and prescription. Firstly, laches is a creation of equity and its application is controlled by equitable considerations. Laches cannot be used to defeat justice or perpetuate fraud and injustice. Neither should its application be used to prevent the rightful owners of a property from recovering what has been fraudulently registered in the name of another.17 Secondly, prescription does not apply when the person seeking annulment of title or reconveyance is in possession of the lot because the action partakes of a suit to quiet title which is imprescriptible.18 In this case, Morales had actual possession of the land when she had a house built thereon and had appointed a caretaker to oversee her property. Her undisturbed possession of the land for a period of fifty (50) long years gave her and her heirs a continuing right to seek the aid of a court of equity to determine the nature of the claim of ownership of petitioner-spouses. In the case at bar, Morales caretaker became aware of the second sale to petitioner-spouses only in 1991 when he received from the latter a notice to vacate the land. Respondents-heirs did not sleep on their rights for in 1994, they filed their action to annul petitioners title over the land. It likewise bears to stress that when vendor Arnold reacquired title to the subject property by means of fraud and concealment after he has sold it to Alberta Morales, a constructive trust was created in favor of Morales and her heirs. As the defrauded parties who were in actual possession of the property, an action of the respondents-heirs to enforce the trust and recover the property cannot prescribe. They may vindicate their right over the property regardless of the lapse of time.21 Hence, the rule that registration of the property has the effect of constructive notice to the whole world cannot be availed of by petitioners and the defense of prescription cannot be successfully raised against respondents.

SALUDARES VS. CA Facts: Pomposa died on May 1, 1923, leaving herein petitioners, Enrica, Petra, Restituto, Amado, Delfina, Beata, Vicenta and Isabel, all surnamed Dator, as her compulsory heirs Heirs and their father Juan executed a deed of extrajudicial partition of the share of Pomposa in the Tanza estate. The settlement conferred the eastern half of the Tanza estate to Juan and the western half to the Heirs. Juan was in possession of the entire Tanza estate. After the partition, the Heirs took possession of their share and had the same tenanted by a certain Miguel Dahilig, husband of Petra, one of the Heirs, who in turn managed the land in behalf of the other siblings. Juan, the father, remained in possession of his half of the land until his death on April 6, 1940. On December 13, 1976, Isabel Dator applied for a free patent over the entire Tanza estate, including Lot 5793, in behalf of the Heirs. On May 26, 1977, after all the requirements were complied with, the Register of Deeds of Quezon awarded Free Patent No. 4A-2-8976 and issued Original Certificate of Title (OCT) No. 0-23617 in the names of the Heirs. Sometime in 1988, the Heirs were informed by their tenant that private respondents cut some 50 coconut trees located within the subject lot. Thus, the Heirs sent a letter,3 dated July 26, 1988, to private respondents demanding an explanation for their intrusion into their property and unauthorized felling of trees. On August 25, 1988, private respondents retaliated by filing an action for reconveyance against petitioners, docketed as civil case no. 88-121, in the Regional Trial Court of Lucena City. Private respondents alleged in their complaint that: (a) they were the owners in fee simple and possessors of Lot No. 5793; (b) they bought the land from the successors-in-interest of Petra Dator, one of the heirs; (c) they were in possession of the subject land from 1966 to the present and (d) petitioner Isabel Dator obtained free patent OCT P-23617 over Lot 5793 in favor of the Heirs by means of fraud and misrepresentation. Thus, private respondents prayed for the cancellation of OCT P-23617 and the issuance of a new title in their names. In their answer, the Heirs denied having sold any portion of the Tanza estate to anyone. They alleged that: (a) they and their predecessors-in-interest had been and were still in actual, continuous, adverse and public possession of the subject land in the concept of an owner since time immemorial and (b) title to Lot 5793 was issued in their favor after faithful compliance with all the requirements necessary for the issuance of a free patent. After trial, the lower court rendered a decision dismissing the action primarily on the ground of prescription of action. Issue: W/N CA erred when it did not consider that the complaint filed by the private respondents for reconveyance and cancellation of title before the trial court eleven (11) years after a torrens title over the property was issued in the name of the petitioners (had) prescribed.


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