GR 168734; (April, 2009) (Digest)
G.R. No. 168734 & G.R. No. 170621, April 24, 2009
MARCELINO LOPEZ, FELISA LOPEZ, LEONARDO LOPEZ and ZOILO LOPEZ, petitioners, vs. JOSE ESQUIVEL, JR. and CARLITO TALENS, Respondents.
NOEL RUBBER & DEVELOPMENT CORP. doing business under the name of “NORDEC PHIL.” and DR. POTENCIANO MALVAR, petitioners, vs. JOSE ESQUIVEL, JR., CARLITO TALENS, MARCELINO LOPEZ, FELISA LOPEZ, LEONARDO LOPEZ, ZOILO LOPEZ, ATTY. SERGIO ANGELES, ATTY. GEORGE A. ANG CHENG, and THE REGISTER OF DEEDS OF MARIKINA, Respondents.
FACTS
Hermogenes Lopez was awarded a homestead patent over a 19.4888-hectare land. Unaware of the patent, he sold the entire land to Ambrocio Aguilar in 1959. It was later allegedly discovered that a 2.6950-hectare portion (subject property) was erroneously included in Hermogenes’s survey plan and actually formed part of Lauro Hizon’s adjoining land. Consequently, in 1965, Hermogenes executed a Quitclaim over the subject property in favor of Hizon, who later sold it to respondents Jose Esquivel, Jr. and Carlito Talens in 1968. Hermogenes died in 1982. His heirs, the Lopez siblings, successfully had the 1959 sale to Aguilar declared null and void for violating the Public Land Act. The Lopez siblings then had the entire 19.4888-hectare land, including the subject property, registered in their names under the Torrens system.
In 1993, Esquivel and Talens filed an application for registration of the subject property. The land registration court granted their application but advised them to file an action for reconveyance to amend the Lopez siblings’ titles. Esquivel and Talens then filed a Complaint for Reconveyance and Recovery of Possession. The Regional Trial Court (RTC) ruled in their favor, ordering the Lopez siblings to vacate and convey the subject property and directing the Register of Deeds to issue new titles in favor of Esquivel and Talens. The Court of Appeals affirmed this decision.
Meanwhile, petitioners Noel Rubber & Development Corp. (Nordec Phil.) and Dr. Potenciano Malvar, who claimed to have purchased portions of the land from the Lopez siblings, filed a Petition for Annulment of Judgment with the Court of Appeals, challenging the RTC Decision in the reconveyance case. The Court of Appeals dismissed their petition for prematurity, ruling they were not indispensable or necessary parties to that case.
ISSUE
1. In G.R. No. 168734 , whether the Court of Appeals erred in affirming the RTC Decision ordering the reconveyance of the subject property to Esquivel and Talens.
2. In G.R. No. 170621, whether the Court of Appeals erred in dismissing the Petition for Annulment of Judgment filed by Nordec Phil. and Dr. Malvar.
RULING
1. In G.R. No. 168734 , the Supreme Court DENIED the petition and AFFIRMED the Court of Appeals Decision. The Court held that an action for reconveyance based on an implied or constructive trust prescribes in ten years from the issuance of the title. The titles of the Lopez siblings were issued on March 15, 1985. Esquivel and Talens filed their complaint on October 2, 1996, which was beyond the ten-year prescriptive period. However, the Court ruled that the principle of laches was applicable. The Lopez siblings were guilty of laches for their inaction and failure to assert their claim over the subject property for an unreasonable length of time, despite knowledge of the 1965 Quitclaim in favor of Hizon. Furthermore, the Court found that the Lopez siblings were in bad faith, as they caused the registration of the land in their names despite knowing that their father had already quitclaimed the subject property to Hizon. The Torrens title does not furnish a shield for fraud.
2. In G.R. No. 170621, the Supreme Court DENIED the petition. The Court held that Nordec Phil. and Dr. Malvar were not indispensable parties in the reconveyance case (Civil Case No. 96-4193). Their rights, based on contracts to sell with the Lopez siblings, were merely inchoate and had not yet ripened into full ownership at the time of the RTC Decision. They were not necessary parties either, as complete relief could be accorded to the original parties without their participation. The Court of Appeals correctly dismissed their Petition for Annulment of Judgment for prematurity. The proper remedy for them was to file a separate action to assert their claims against the parties involved.