Friday, December 16, 2011

SPS CARPO vs. AYALA LAND, INCORPORATED G.R. No. 166577, February 3, 2010


Spouses Morris and Socorro Carpo (Carpos) filed a Complaint for Quieting of Title against Ayala Land, Incorporated (ALI) claiming that they are the owners of a parcel of land covered by Transfer Certificate of Title (TCT) No. 296463 issued in their names. They further alleged that ALI was claiming to have titles (specifically, TCT Nos. 125945, T-4366, T-4367 and T-4368) over the property covered by the Carpos’ TCT No. 296463.

In its Answer, ALI pointed out that the areas covered by TCT Nos. T-4366, T-4367, and T-4368 do not overlap with the Carpos’ claimed property and the dispute pertained only to the land covered by the Carpos’ TCT No. 296463 and TCT No. T-5333 in the name of Las Piñas Ventures, Inc. (LPVI) which was derived from TCT No. 125945 in the name of Ayala Corporation. It appeared that Ayala Corporation contributed the property to LPVI and LPVI had, in turn, also merged with ALI. Further, ALI alleged that it is the true owner of the property covered by TCT No. T-5333 as it traces back its title to Original Certificate of Title (OCT) No. 242 issued in 1950 while the Carpos’ title was derived from OCT No. 8575 issued only in 1970. ALI also claimed the Carpos’ complaint was barred by res judicata in view of the 1941 decision of this Court in Guico v. San Pedro which upheld the ownership of a certain Eduardo Guico over the subject property as Lot 3, of Psu-80886 over the claim of a certain Florentino Baltazar who was asserting ownership of the same under his plan, Psu-56007.

The RTC ruled that the Carpos’ title is superior to that of ALI. The CA reversed RTC’s decision. The Carpos filed their motion for reconsideration but the same was denied by the CA. Hence, the instant petition for review.

The Carpos contend that it is error on the part of the CA to rule that their cause of action has been barred by prescription and laches. According to them, since the OCT from which ALI derived its title is void for want of a duly approved survey plan, their cause of action did not prescribe.

ISSUE: Whether or not the Carpos cause of action has been barred by prescription and laches.

HELD: YES. OCT No. 242 of ALI’s predecessor-in-interest was issued on May 7, 1950, or forty-five (45) years before the Car[pos filed their complaint on March 10, 1995. As such, it is the Court’s firmly held view that the Carpos claim is barred not only by prescription, but also by laches.

Aside from the fact that OCT No. 242 had become incontrovertible after the lapse of one (1) year from the time a decree of registration was issued, any action for reconveyance that the Carpos could have availed of is also barred. Although the Carpos’ complaint was for quieting of title, it is in essence an action for reconveyance based on an implied or constructive trust, considering that the Carpos were alleging in said complaint that there was a serious mistake, if not fraud, in the issuance of OCT No. 242 in favor of ALI’s predecessor-in-interest. It is now well-settled that an action for reconveyance, which is a legal remedy granted to a landowner whose property has been wrongfully or erroneously registered in another’s name, must be filed within ten years from the issuance of the title, since such issuance operates as a constructive notice. Since ALI’s title is traced to an OCT issued in 1950, the ten-year prescriptive period expired in 1960.

By laches is meant the 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. It does not involve mere lapse or passage of time, but is principally an impediment to the assertion or enforcement of a right, which has become under the circumstances inequitable or unfair to permit. In the instant case, the Carpos, as well as their predecessor-in-interest, have not shown that they have taken judicial steps to nullify OCT No. 242, from which ALI’s title was derived, for forty-five (45) years. To allow them to do so now, and if successful, would be clearly unjust and inequitable to those who relied on the validity of said OCT, the innocent purchasers for value, who are protected by P.D. 1529.

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