G.R. No. L-5178; February 22, 1954
Emilio del Campo, et al., plaintiffs-appellees, vs. Francisco del Campo, et al., defendants-appellants.

FACTS

In 1889, Leon del Campo married Isabel Balante, with whom he had four children: Emilio, Ramona, Victor, and Rital (plaintiffs). In 1900, during this marriage, Leon purchased a 220-hectare parcel of land in Surup, Davao, from Geronimo Sulupanan. Isabel died in 1902. Leon later married Esperanza Catada, with whom he had six children, including Francisco (defendants). Esperanza died in 1920. In 1922, Leon applied for registration of the land, claiming it belonged to him and his children by Esperanza. The application was granted in 1923, and the land was adjudicated to Leon and his six children by Esperanza in equal portions. A subdivision plan later allocated half (Lot A) to Leon and half (Lot B) to his children by Esperanza, with corresponding Transfer Certificates of Title issued. Leon died in 1927. In subsequent intestate proceedings, plaintiff Emilio was appointed judicial administrator and, with court approval, sold Lot A to defendant Gregorio Yrasuegui. The deed of sale stated Lot B belonged to Francisco and his brothers. In 1940, Francisco and his brothers sold Lot B to Yrasuegui, who obtained title. On July 11, 1950, the plaintiffs (children of Isabel) filed an action against their half-siblings and Yrasuegui, seeking declaration of ownership over Lot B, nullification of the sale to Yrasuegui, reconveyance, and an accounting for fruits and rents since 1940. The trial court ruled for the plaintiffs, finding the land was conjugal property of Leon and Isabel, so plaintiffs inherited half from Isabel; the registration of Lot B in favor of the second marriage’s children involved constructive fraud; and Yrasuegui, while not in bad faith, was not an innocent purchaser for value due to lack of diligence. The defendants appealed.

ISSUE

Whether the defendants-appellants (particularly Gregorio Yrasuegui) are obligated to reconvey Lot B to the plaintiffs-appellees, primarily hinging on whether Yrasuegui was an innocent purchaser for value and whether the plaintiffs’ claim is barred by laches.

RULING

The Supreme Court reversed the trial court’s decision and dismissed the complaint. It held that Gregorio Yrasuegui was an innocent purchaser for value. The land, purchased during Leon’s first marriage, was presumed conjugal, but there was no evidence to inform Yrasuegui of this fact. He relied on the Torrens title issued in 1923 to Leon and the children of the second marriage, which was never opposed or questioned by the plaintiffs until 1950. Yrasuegui’s belief was reinforced when plaintiff Emilio, as judicial administrator, sold Lot A to him in 1937 and stated Lot B belonged to the defendants, and when he found the defendants in possession and enjoyment of Lot B at the time of his purchase in 1940. The Court also found that the plaintiffs, by their inaction for 27 years from the issuance of the decree in 1923 and 10 years from the sale to Yrasuegui in 1940, had lost any right to the land through laches. The constructive fraud, if any, was committed by Leon del Campo during the registration, not by the minor defendants, and the plaintiffs failed to reopen the registration proceedings within the prescribed period.