Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 152423               December 15, 2010

SPOUSES MARCOS R. ESMAQUEL and VICTORIA SORDEVILLA, Petitioners,
vs.
MARIA COPRADA, Respondent.

D E C I S I O N

PERALTA, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to set aside the Decision1 and the Resolution2 of the Court of Appeals, dated April 6, 2001 and February 15, 2002, respectively, (CA) in CA-G.R. SP No. 49994.

The antecedents are as follows:

On February 24, 1997, petitioners, spouses Marcos Esmaquel and Victoria Sordevilla (Victoria) filed an ejectment case3 against respondent Maria V. Coprada before the 2nd Municipal Circuit Trial Court (MCTC) of Magdalena, Liliw and Majayjay Laguna. Petitioners claimed that they are the registered owners of a parcel of land situated in M.H. Del Pilar St., Barangay San Miguel, Majayjay, Laguna, containing an area of Two Hundred Fifty-Three (253) square meters and covered by Transfer Certificate of Title (TCT) No. T-93542. In 1945, respondent was able to persuade the petitioners to allow her and her family to use and occupy the land for their residence, under the condition that they will vacate the premises should petitioners need to use the same. Respondent and her family were allowed to construct their residential house. Since then, the petitioners never made an attempt to drive them away out of pity, knowing that respondent and her eight children have no other place to live in. Also, respondent and her family have been occupying the subject premises free of rent, including payment of realty taxes. Respondent's present circumstances have completely improved, i.e., some of her children are already working; they are regularly sending her financial assistance; and she has acquired her own residential house at Barangay Panglan, Majayjay, Laguna. Because of this, petitioners verbally demanded that respondent vacate the subject land, but the latter refused. Thus, petitioners were forced to send a demand letter dated August 22, 1996, giving respondent until November 30, 1996 to vacate the subject premises. However, respondent still ignored said demand, which prompted petitioners to bring a complaint before the barangay authorities. No settlement was reached, hence, a certification to file action in Court was issued. Petitioners were, therefore, constrained to lodge an ejectment case against the respondent before the MCTC.

Respondent admitted that petitioners are the registered owners of the subject land. However, she averred that in 1945, it was Emiliana Coprada (petitioner Victoria Sordevilla's mother and original owner of the subject land) and not the petitioners who gave permission to her late husband Brigido Coprada to use the subject lot. Emiliana allowed her nephew Brigido and his family to occupy the lot as their permanent abode, because of her love and affection for her nephew, and also, due to the fact that the said lot is virtually a wasteland. Thereafter, Brigido and his family cleared the area and built therein a nipa hut to dwell in. When Emiliana died, the ownership of the property was inherited by her only child, petitioner Victoria Sordevilla. Respondent alleged that sometime in the early 1960's, petitioner Victoria offered the said lot for sale for ₱2,000.00 to respondent, who readily agreed. The purchase price was paid in installments and was fully paid in 1962. Due to their close relationship, the agreement was never reduced to writing. Respondent further maintained that since the execution of the oral sale of the subject lot, she has been the one paying the realty taxes due on the property. After the sale, respondent built on the subject land a semi-concrete structure. Respondent stated that petitioners' claim is barred by laches. Even granting, without admitting, that respondent's claim of ownership over the property is improper because petitioners are the registered owners thereof, respondent argued that she is a builder in good faith, because she was able to build the structure on the subject lot with the prior permission of the owner.

In its Decision4 dated September 11, 1997, the MCTC rendered judgment dismissing the complaint. It held that laches had already set in which prevented petitioners from questioning the validity of the purported sale between Victoria and Maria.

On appeal, the Regional Trial Court (RTC) reversed the MCTCís judgment. The RTC ruled that respondent's occupation of the subject property was by virtue of petitioners' tolerance and permission. Hence, respondent is bound by an implied promise that she will vacate the property upon demand. Thus, her possession over the subject property became unlawful after the petitioners demanded her to vacate the property. The RTC found that respondent failed to prove the alleged oral sale and that petitioners have adequately proven that they are entitled to the possession of the subject land as registered owners thereof. The RTC ordered the respondent and all other persons claiming rights under her to vacate and surrender the possession of the subject land to the petitioners and to remove any and all improvements she introduced on the parcel of land.5

Respondent filed a Motion for Reconsideration, which was denied by the RTC in an Order6 dated November 24, 1998. Obviously dissatisfied by the Decision, respondent filed with the CA a petition for review with prayer for temporary restraining order and preliminary injunction.7

In its Decision dated April 6, 2001, the CA granted respondent's petition, reversed the Decision of the RTC and affirmed in toto the Decision of the MCTC. Petitioners filed a Motion for Reconsideration, which was denied by the CA in a Resolution8 dated February 15, 2002. Hence, the instant petition raising the following grounds:

I

THE RIGHT OF THE REGISTERED OWNERS TO RECOVER POSSESSION IS NEVER BARRED BY LACHES AND/OR THE PERSON WHO HAS A TORRENS TITLE OVER A PARCEL OF LAND IS ENTITLED TO THE POSSESSION THEREOF.

II

THE OWNERSHIP AND RIGHT OF PETITIONERS TO RECOVER POSSESSION OF THE SUBJECT PROPERTY CANNOT BE DEFEATED BY UNPROVEN ORAL SALE.

III

LACHES HAD SET IN AGAINST [RESPONDENT].

IV

THE CERTIFICATE OF TITLE IS NOT SUBJECT TO COLLATERAL ATTACK.9

The petition is meritorious.

The pertinent point of inquiry in this case is whether or not petitioners have a valid ground to evict respondent from the subject property.

An action for forcible entry or unlawful detainer is governed by Section 1, Rule 70 of the Rules of Court, which provides:

SECTION 1. Who may institute proceedings, and when. - Subject to the provisions of the next succeeding section, a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or other person, may, at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs.

In unlawful detainer cases, the possession of the defendant was originally legal, as his possession was permitted by the plaintiff on account of an express or implied contract between them. However, defendant's possession became illegal when the plaintiff demanded that defendant vacate the subject property due to the expiration or termination of the right to possess under their contract, and defendant refused to heed such demand.10

The sole issue for resolution in an unlawful detainer case is physical or material possession of the property involved, independent of any claim of ownership by any of the parties. Where the issue of ownership is raised by any of the parties, the courts may pass upon the same in order to determine who has the right to possess the property. The adjudication is, however, merely provisional and would not bar or prejudice an action between the same parties involving title to the property.11 Since the issue of ownership was raised in the unlawful detainer case, its resolution boils down to which of the parties' respective evidence deserves more weight.

In the case at bar, petitioners' cause of action for unlawful detainer is based on their ownership of the land covered by TCT No. T-93542 and on their claim that they merely tolerated respondent's stay thereat. Respondent's possession, as well as those persons claiming right under her, became unlawful upon her refusal to vacate the premises. Petitioners contend that since they are the registered owners of the subject land, they are entitled to the possession thereof and their right to recover possession over it is never barred by laches. They maintain that respondent's claim of ownership is based on an unproven oral sale, which does not exist. Further, respondent cannot rely on the Tax Declarations as she was paying taxes in the petitioners' name, as the declared owners of the property. Moreover, she started paying the taxes only in 1984 despite her claim that the property was sold to her in 1962. Even assuming that the sale took place in 1962, respondent is guilty of laches as she failed to take any positive action for the delivery and conveyance to her of the portion of the property she is occupying. Finally, respondent cannot collaterally attack the title of the petitioners to the subject land.

On her part, respondent, although admitting that the property is registered in petitioners' name, claimed that the 100-square-meters portion of the property, where her house was erected, was already sold to her by petitioner Victoria. Thus, by virtue of the sale, she and her family have the right to possess the said property. The non-presentation of receipt and deed of sale, non-delivery of the owner's certificate of title, and her payment of the real property taxes in the name of the petitioners were due to the close relationship between the parties and the existing practice of palabra de honor in their day to day transactions. Respondent further alleged that she is not guilty of laches; rather, it is the registered owners' right to recover possession of their property which is barred by laches.

In the present case, respondent failed to present evidence to substantiate her allegation that a portion of the land was sold to her in 1962. In fact, when petitioners sent a letter12 to the respondent, demanding her to vacate the subject property, the respondent, in reply13 to the said letter, never mentioned that she purchased the subject land in 1962. If the sale really took place, the respondent should have immediately and categorically claimed that in her letter response. Clearly therefore, respondent's submission that there was an oral sale is a mere afterthought.

On the other hand, it is undisputed that the subject property is covered by Transfer Certificate of Title No. T-93542, registered in the name of the petitioners. As against the respondent's unproven claim that she acquired a portion of the property from the petitioners by virtue of an oral sale, the Torrens title of petitioners must prevail. Petitioners' title over the subject property is evidence of their ownership thereof. It is a fundamental principle in land registration that the certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. Moreover, the age-old rule is that the person who has a Torrens title over a land is entitled to possession thereof.14

Further, respondent's argument that petitioners are no longer the owners of a portion of the subject land because of the sale in her favor is a collateral attack on the title of the petitioners, which is not allowed. The validity of petitioners' certificate of title cannot be attacked by respondent in this case for ejectment. Under Section 48 of Presidential Decree No. 1529, a certificate of title shall not be subject to collateral attack. It cannot be altered, modified or canceled, except in a direct proceeding for that purpose in accordance with law. The issue of the validity of the title of the petitioners can only be assailed in an action expressly instituted for that purpose. Whether or not the respondent has the right to claim ownership over the property is beyond the power of the trial court to determine in an action for unlawful detainer.15

In Rodriguez v. Rodriguez,16 citing the case of Co v. Militar,17 the Court held that:

[T]he Torrens System was adopted in this country because it was believed to be the most effective measure to guarantee the integrity of land titles and to protect their indefeasibility once the claim of ownership is established and recognized.

It is settled that a Torrens Certificate of title is indefeasible and binding upon the whole world unless and until it has been nullified by a court of competent jurisdiction. Under existing statutory and decisional law, the power to pass upon the validity of such certificate of title at the first instance properly belongs to the Regional Trial Courts in a direct proceeding for cancellation of title.

As the registered owner, petitioner had a right to the possession of the property, which is one of the attributes of ownership. x x x

Anent the issue on laches, the CA's ruling that petitioners' long inaction to assert their rights over the subject land bars them from recovering the same is without basis. Also, the doctrine invoked by the appellate court that a registered owner may loose his right to recover its possession by reason of laches is not applicable here.

Laches is 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 the presumption that the party entitled to assert it either has abandoned or declined to assert it.18 There is no absolute rule as to what constitutes laches or staleness of demand; each case is to be determined according to its particular circumstances, with the question of laches addressed to the sound discretion of the court. Because laches is an equitable doctrine, its application is controlled by equitable considerations and should not be used to defeat justice or to perpetuate fraud or injustice.19

Respondent first acquired possession of the subject lot by mere tolerance. From 1945 until the filing of the complaint for ejectment in 1997, the nature of that possession has never changed. Petitioners allowed the respondent to possess the property with the knowledge that the respondent will vacate the same upon demand. Hence, until such demand to vacate was communicated by the petitioners to the respondent, petitioners are not required to do any act to recover the subject land, precisely because they knew of the nature of the respondent's possession, i.e., possession by mere tolerance. Thus, it cannot be said that petitioners are guilty of failure or neglect to assert a right within a reasonable time. Further, after the petitioners gave a demand letter to the respondent giving the latter until November 30, 1996 to vacate the subject premises, which respondent failed to heed, they immediately filed a complaint before the barangay authorities and, thereafter, lodged an ejectment case before the MCTC on February 24, 1997. In sum, We find that petitioners are not guilty of laches as would bar their claim to the property in question.

In contrast, respondent, who is claiming that a portion of the property was sold to her in 1962, has herself failed within a long period of time to have that portion transferred in her name. Respondent had to wait for almost 35 years since 1962, and were it not for the filing of the ejectment suit in 1997, she would not have bothered to assert her rights under the alleged sale. Respondent's failure to assert that right only goes to prove that no sale ever transpired between the parties.

Moreover, as the registered owners, petitioners' right to eject any person illegally occupying their property is not barred by laches. In Gaudencio Labrador, represented by Lulu Labrador Uson, as Attorney-in-Fact v. Spouses Ildefonso Perlas and Pacencia Perlas and Spouse Rogelio Pobre and Melinda Fogata Pobre,20 the Court held that:

x x x As a registered owner, petitioner has a right to eject any person illegally occupying his property. This right is imprescriptible and can never be barred by laches. In Bishop v. Court of Appeals, we held, thus:

As registered owners of the lots in question, the private respondents have a right to eject any person illegally occupying their property. This right is imprescriptible. Even if it be supposed that they were aware of the petitioners' occupation of the property, and regardless of the length of that possession, the lawful owners have a right to demand the return of their property at any time as long as the possession was unauthorized or merely tolerated, if at all. This right is never barred by laches.

Since respondent's occupation of the subject lot is by mere tolerance or permission of the petitioners, without any contract between them, respondent is bound by an implied promise that she will vacate the same upon demand, failing which a summary action for ejectment is the proper remedy against her.21

In respondent's Answer filed before the MCTC, she claimed that since she was able to build a structure on the subject lot with the prior permission from the owner, she is a builder in good faith and thus entitled to be reimbursed the necessary and useful expenses under Articles 546 and 548 of the Civil Code of the Philippines. Without such reimbursement, she has the right of retention over the property and she cannot just be ejected from the premises.

Respondent's argument does not hold water. Since respondent's occupation of the subject property was by mere tolerance, she has no right to retain its possession under Article 448 of the Civil Code. She is aware that her tolerated possession may be terminated any time and she cannot be considered as builder in good faith.22 It is well settled that both Article 44823 and Article 54624 of the New Civil Code, which allow full reimbursement of useful improvements and retention of the premises until reimbursement is made, apply only to a possessor in good faith, i.e., one who builds on land with the belief that he is the owner thereof. Verily, persons whose occupation of a realty is by sheer tolerance of its owners are not possessors in good faith.25 At the time respondent built the improvements on the premises in 1945, she knew that her possession was by mere permission and tolerance of the petitioners; hence, she cannot be said to be a person who builds on land with the belief that she is the owner thereof.

Respondent's reliance on her payment of realty taxes on the property is unavailing. She started paying taxes only in 1984 despite her claim that she bought the property in 1962. Further, aside from the rule that tax declarations and corresponding tax receipts cannot be used to prove title to or ownership of a real property inasmuch as they are not conclusive evidence of the same,26 the RTC found that although the payment for said taxes were received from respondent, the declared owner was petitioner Victoria.

It must be stressed, however, that the court's adjudication of ownership in an ejectment case is merely provisional, and affirmance of the RTC's decision would not bar or prejudice an action between the same parties involving title to the property, if and when such action is brought seasonably before the proper forum.27

WHEREFORE, the petition is GRANTED. The Decision and the Resolution of the Court of Appeals, dated April 6, 2001 and February 15, 2002, respectively, in CA-G.R. SP No. 49994, affirming the Decision of the 2nd Municipal Circuit Trial Court in Civil Case No. 1875, are REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Santa Cruz, Laguna, Branch 26, in Civil Case No. SC-3580, is REINSTATED.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

ANTONIO EDUARDO B. NACHURA
Associate Justice
ROBERTO A. ABAD
Associate Justice

JOSE CATRAL MENDOZA
Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courtís Division.

ANTONIO T. CARPIO
Associate Justice
Second Division, Chairperson

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersonís Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courtís Division.

RENATO C. CORONA
Chief Justice


Footnotes

1 Penned by Associate Justice Alicia L. Santos, with Associate Justice Ramon A. Barcelona and Associate Justice Rodrigo V. Cosico, concurring; rollo, pp. 43-49.

2 Rollo, pp. 51-52.

3 Records, pp. 7-11.

4 Rollo, pp. 97-102.

5 Id. at. 137.

6 Records, pp. 226-227.

7 CA rollo, pp. 7-22.

8 Rollo, pp. 51-52.

9 Id. at 21.

10 Estate of Soledad Manantan v. Somera, G.R. No. 145867, April 7, 2009, 584 SCRA 81, 89.

11 Barias v. Heirs of Bartolome Boneo, G.R. No. 166941, December 14, 2009, 608 SCRA 169, 174.

12 Records, p. 14.

13 Id. at 41.

14 Caña v. Evangelical Free Church of the Philippines, G.R. No. 157573, February 11, 2008, 544 SCRA 225, 238-239.

15 Soriente v. Estate of the Late Arsenio E. Concepcion, G.R. No. 160239, November 25, 2009, 605 SCRA 315, 330.

16 G.R. No. 175720, September 11, 2007, 532 SCRA 642, 652-653.

17 G.R. No. 149912, January 29, 2004, 421 SCRA 455.

18 Fangonil-Herrera v. Fangonil, G.R. No. 169356, August 28, 2007, 531 SCRA 486, 511.

19 Id.

20 G.R. No. 173900, August 9, 2010. (Emphasis supplied.)

21 Arambulo v. Gungab, 508 Phil. 612, 621-622 (2005).

22 Id. at 622, citing Del Rosario v. Manuel, 420 SCRA 128, 131 (2004).

23 Art. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the owner who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.

24 Art. 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until he has been reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person who has defeated him in the possession having the option of refunding the amount of the expenses or of paying the increase in value which the thing may have acquired by reason thereof.

25 Pada-Kilario v. Court of Appeals, 379 Phil. 515, 529-530 (2000).

26 Castillo v. Escutin, G.R. No. 171056, March 13, 2009, 581 SCRA 258, 285.

27 Soriente v. Estate of the Late Arsenio E. Concepcion, supra note 15.


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