G.R. No. L-68747 July 13, 1990
VICENTE RAÑESES and ZENAIDA BUENA-RAÑESES, petitioners, vs. INTERMEDIATE APPELLATE COURT and ANTONINO LAMADRID, respondents.

FACTS

Petitioners Vicente Rañeses and Zenaida Buena-Rañeses filed two complaints for recovery of possession and damages against respondent Antonino Lamadrid concerning two parcels of land. In Civil Case No. 2313, the subject was an 8.7-hectare lot titled in Zenaida’s name. The Rañeses alleged Lamadrid intruded upon a 2/5 portion. Lamadrid claimed ownership, asserting he purchased that portion from Francisco Lumbis, who had earlier bought it from the original owner, Isabelo Cuevas. Lamadrid discovered that a deed of sale dated 1961, purportedly executed by Cuevas in favor of the Rañeses covering the entire lot, had been registered in 1967. He contended this deed was fictitious or fraudulent.
The trial court ruled in favor of the Rañeses, declaring their deed valid and ordering Lamadrid to vacate. Lamadrid appealed only Civil Case No. 2313 to the Intermediate Appellate Court (IAC). The IAC reversed the trial court, dismissing the complaint, ordering the Rañeses to pay attorney’s fees to Lamadrid, and declaring Lamadrid’s claim superior. The IAC found the Rañeses were purchasers in bad faith and that their deed was a forgery. The Rañeses elevated the case to the Supreme Court.

ISSUE

The core issue is whether the deed of sale in favor of the Rañeses or the prior unregistered sale in favor of Lamadrid’s predecessor-in-interest should prevail, and whether the defense of laches can be raised for the first time on appeal.

RULING

The Supreme Court affirmed the IAC decision. The legal logic centers on Article 1544 of the Civil Code governing double sales. For immovable property, ownership belongs to the person who in good faith first recorded the title in the Registry of Property. The IAC correctly found the Rañeses were not purchasers in good faith. Evidence showed Vicente Rañeses, owning adjacent lands, knew of Lumbis’s (Lamadrid’s predecessor) prior purchase, occupation, and cultivation of the disputed portion since 1954. The Rañeses’ deed, executed in 1961 but registered only in 1967, six years later and after Lamadrid attempted to register his own deed, indicated bad faith. The Court upheld the IAC’s finding that this deed was a forgery, noting the original owner, Cuevas, denied executing it. A forged deed is a nullity and conveys no title.
Furthermore, the Supreme Court ruled that the defense of laches was waived. The Rañeses failed to raise laches in their pleadings before the trial court, invoking it only in a motion for reconsideration of the IAC decision. Defenses not raised in the lower courts are deemed waived and cannot be raised for the first time on appeal. This procedural rule applies regardless of whether a party is a plaintiff or defendant; the Rañeses could have raised it in a reply to Lamadrid’s answer but did not. Thus, the IAC correctly awarded attorney’s fees to Lamadrid as the prevailing party.