G.R. No. 107653 ; February 5, 1996
Felipa Garbin, petitioner, vs. The Honorable Court of Appeals and Spouses Antonio Julian and Casimira Garbin, respondents.

FACTS

Pablo Garbin owned Lot 12712. On October 31, 1955, he and his wife Leoncia executed a deed of absolute sale over the northern half of the lot to their daughter, respondent Casimira Garbin. Casimira registered an adverse claim on the original certificate of title. Later, on May 24, 1970, Pablo sold the entire lot, including the northern half, to his other daughter, petitioner Felipa Garbin. Felipa secured a transfer certificate of title in her name. Felipa and Pablo subsequently filed an ejectment case against Casimira and her spouse, which was decided in Felipa’s favor and ultimately reached the Supreme Court (G.R. No. 59817), where the petition was denied.
On March 1, 1982, before the ejectment judgment became final, the respondent spouses filed a complaint for annulment of sale, partition, and damages against Felipa. They argued that as the first vendees who annotated an adverse claim, their right was superior to Felipa’s, who was a buyer in bad faith. The Regional Trial Court dismissed the complaint, ruling the action had prescribed and that the respondents were guilty of laches for waiting 27 years from the 1955 sale to assert their claim.

ISSUE

The core issue is whether the respondent spouses, as first vendees under a prior but unregistered sale annotated only as an adverse claim, have a superior right over the petitioner, a subsequent vendee who obtained a transfer certificate of title, and whether their action to annul the second sale is barred by prescription or laches.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the RTC decision, dismissing the complaint. The legal logic proceeds from two key principles. First, on the issue of double sale under Article 1544 of the Civil Code, the Court clarified that the annotation of an adverse claim, while constituting notice to the world, does not equate to the registration of the deed of sale itself. For the first vendee to prevail in a double sale, the law requires that the sale must be registered in good faith. Here, the respondents only registered an adverse claim, not the deed of sale. Consequently, Felipa, as the subsequent vendee who first registered the deed and obtained a new title, acquired a superior right, assuming good faith.
Second, and decisively, the action was barred by laches. The Court emphasized that the respondents waited an unreasonable length of time—27 years from the 1955 sale and 12 years from the 1970 sale to Felipa—before filing the annulment case in 1982. Their preoccupation with the ejectment suit did not sufficiently excuse this delay. Laches supervenes when a party neglects to assert a right for an unreasonable period, leading to a presumption of abandonment or waiver. The respondents’ inaction for decades, while Felipa’s title remained unchallenged, warranted the application of this equitable principle, rendering their claim stale and unenforceable.