G.R. No. 126830 May 18, 1999
NEMESIA T. VERACRUZ and CESAR VERACRUZ, petitioners, vs. BASILIO V. DUMAT-OL, et al., respondents.

FACTS

Petitioners Nemesia and Cesar Veracruz filed a complaint for reconveyance with damages in 1981. They claimed ownership and possession of Lot No. 1672 in Bacong, Negros Oriental, alleging that the respondents, the Dumat-ol family, had fraudulently obtained title to the land under Original Certificate of Title No. FV-540, issued on February 23, 1957. The petitioners asserted they only discovered this fraud in 1977 and, upon discovery, demanded reconveyance, which was refused.
Respondents, in their answer, defended their ownership by virtue of a valid donation from Silvestra Villegas vda. de Tindoc in 1928, which had been upheld in two prior court proceedings. They also asserted affirmative defenses, including prescription and laches, noting the petitioners’ inaction for over fifty-three years. Crucially, they attached to their answer an agreement dated January 20, 1981, wherein petitioner Cesar Veracruz acknowledged respondents’ ownership and agreed to relinquish possession by April 20, 1981. The trial court dismissed the complaint, a decision affirmed by the Court of Appeals.

ISSUE

The primary issues were: (1) Whether the court could consider the 1981 agreement attached to the answer but not formally offered in evidence; and (2) Whether such an agreement could bind petitioner Nemesia Veracruz, who was not a signatory.

RULING

The Supreme Court affirmed the decisions of the lower courts, dismissing the petition. On the procedural issue, the Court ruled that the 1981 agreement, having been pleaded in the answer with a copy attached and its genuineness and due execution not denied under oath by the petitioners, could be considered by the court as evidence without a formal offer. This is in accordance with established jurisprudence.
More fundamentally, the Court held, ex meru motu, that the action for reconveyance was barred by prescription and laches. Assuming arguendo that the title was obtained by fraud, an action for reconveyance based on fraud prescribes in four years from its discovery. For registered land, such discovery is deemed to have occurred from the date of registration of the title, which serves as constructive notice to all. The title was registered in 1957, and the action was filed only in 1981, well beyond the prescriptive period. The petitioners’ prolonged inaction for twenty-four years from the issuance of the title, or even from their alleged discovery in 1977, constituted laches. Thus, regardless of the agreement, the action could no longer prosper.