G.R. No. 152423 ; December 15, 2010
SPOUSES MARCOS R. ESMAQUEL and VICTORIA SORDEVILLA, Petitioners, vs. MARIA COPRADA, Respondent.

FACTS

Petitioners, the registered owners of a parcel of land in Laguna, filed an ejectment case against respondent Maria Coprada. They alleged that in 1945, they permitted respondent and her family to occupy the land with the condition to vacate upon demand. Respondent’s circumstances improved, and after failed verbal and written demands to vacate, petitioners initiated the case. Respondent admitted petitioners’ ownership but claimed an oral sale of the land to her by petitioner Victoria in the early 1960s, which was fully paid. She asserted ownership by virtue of this sale and, alternatively, claimed the status of a builder in good faith. She also argued that petitioners’ action was barred by laches.
The Municipal Circuit Trial Court (MCTC) dismissed the complaint, ruling laches barred the action. The Regional Trial Court (RTC) reversed, finding respondent’s possession was by mere tolerance which became unlawful upon demand, and that the oral sale was unproven. The Court of Appeals (CA) then reinstated the MCTC decision, agreeing that laches had set in.

ISSUE

Whether the registered owners-petitioners can recover possession of the subject property through an ejectment suit, or if their action is barred by laches and respondent’s claim of oral sale.

RULING

The Supreme Court REVERSED the Court of Appeals and REINSTATED the RTC decision, ordering respondent to vacate. The legal logic is clear: an action for unlawful detainer, based on possession by tolerance, prescribes one year from the date of demand. Petitioners’ demand was made in 1996, and the complaint was filed in 1997, well within the prescriptive period. Laches, an equitable doctrine, cannot bar an action that was filed within the statutory period, especially when the registered title is indefeasible.
The Court emphasized that the Torrens title is conclusive evidence of ownership. Respondent’s claim of an oral sale, which lacked any written evidence and was inherently improbable given the value and nature of the transaction, constituted a collateral attack on the title, which is prohibited. As the registered owners, petitioners have a superior right to possession. Respondent, whose entry was by permission, is a possessor by mere tolerance; her possession became illegal upon the owners’ demand. Her alternative claim of being a builder in good faith is unavailing, as good faith ceases when the possessor learns of any flaw in their title. Upon petitioners’ demand, respondent was already aware of the claimed defect, negating good faith. The proper remedy for a builder in good faith is not to retain possession but to seek indemnity under the Civil Code, in a separate appropriate action.