G.R. No. 175343; July 27, 2011
LORETO LUGA (Deceased), Substituted by CELERINA LUGA – Deceased (wife) and Children Namely: Purificacion Luga-Biong, Elizabeth Luga-Cabaña, Rosalie Luga-Tanutan, Ledia Luga-Guy Ab, Maritess Luga-Gravino, Nestor Luga and David Luga, Petitioners, vs. SPS. ELENA AND ROGELIO ARCIAGA, Respondents.

FACTS

The case involves a 911-square meter parcel of land in Toril, Davao City, registered under Transfer Certificate of Title No. T-139473 in the name of respondent Elena Arciaga. The land originally formed part of the Y. Furukawa Daliao Plantation, later administered by the National Abaca and Other Fibers Corporation (NAFCO) and then the Board of Liquidators (BOL). Petitioner Loreto Luga, a former tenant of NAFCO and later the BOL, occupied the land since 1957 and built a house. However, on July 28, 1960, an Occupant’s Affidavit was executed by Honorio Romero over a 2.5-hectare landholding that included the subject parcel. On December 3, 1970, and March 23, 1972, Honorio executed Deeds of Transfer of Right over portions of the land (totaling 940 square meters) in favor of respondent Rogelio Arciaga. Elena Arciaga applied for a patent/title with the BOL, which, after posting a notice and processing her application, approved it. She paid the purchase price, and a Deed of Absolute Sale was executed on May 12, 1988. Transfer Certificate of Title No. T-139473 was issued in her name on November 29, 1988. Loreto Luga filed a complaint for reconveyance of title and damages on March 2, 1994, alleging he had been in possession since 1957 and discovered the title in Elena’s name only in 1993, and that Elena fraudulently misled the BOL. The Regional Trial Court (RTC) ruled in favor of Luga, ordering reconveyance. The Court of Appeals (CA) reversed the RTC, dismissing the complaint and declaring the Spouses Arciaga as rightful owners. Loreto Luga died and was substituted by his wife and children (petitioners). Celerina Luga also died, and Rogelio Arciaga died, survived by Elena and their children.

ISSUE

Whether the Court of Appeals erred in granting the appeal of the respondents and in dismissing the complaint filed by the petitioners for reconveyance of title.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The Court held that the petitioners failed to establish a superior right to the land. The evidence showed that Loreto Luga’s possession was merely tolerated by Honorio Romero, the Arciagas’ predecessor-in-interest. Luga never declared the land for taxation purposes in his own name until 1993, unlike Elena Arciaga who did so immediately after obtaining title and paid real estate taxes. The Court found that the BOL properly processed Elena’s application in accordance with law and procedure, and there was no evidence of fraud or misrepresentation. The Arciagas’ title, having been regularly issued, enjoys the presumption of validity. The petitioners’ claim of possession did not constitute the “well-nigh incontrovertible” evidence required to acquire title through possession. Therefore, the Spouses Arciaga were declared the rightful owners of the disputed property.