G.R. No. 188666 and G.R. No. 190750, December 14, 2017
SPOUSES JUAN and ANTONINA CANO, et al. vs. SPOUSES ARTURO and EMERENCIANA CANO

FACTS

The dispute involves a parcel of land in San Carlos City, Pangasinan. Respondents Spouses Arturo Cano claim ownership by virtue of a 1982 Deed of Absolute Sale executed by the registered owner, Feliza Baun, which was annotated on the Original Certificate of Title (OCT). They filed an ejectment case against petitioners (Spouses Juan Cano, et al.) in 1999, alleging petitioners disturbed their possession after years of benevolent tolerance. Petitioners, in defense, asserted ownership based on an earlier 1962 unregistered donation propter nuptias from the same Feliza Baun and claimed possession for over 63 years. The Municipal Trial Court in Cities (MTCC) dismissed the ejectment suit, upholding the donation and finding laches against respondents. The Regional Trial Court (RTC) initially affirmed but later reversed, ordering petitioners to vacate, a decision affirmed by the Court of Appeals (CA).

ISSUE

The core issue is whether petitioners can successfully resist the ejectment action and claim superior right of possession based on an unregistered donation propter nuptias against respondents’ claim derived from a registered deed of sale.

RULING

The Supreme Court denied the petitions and ruled in favor of the respondents. The legal logic hinges on the principles of land registration and the requirements for a valid donation of immovable property. First, under the Torrens system, the act of registration is the operative act that conveys and affects the land concerning third parties. Respondents’ Deed of Absolute Sale was duly annotated on the OCT, providing constructive notice to the world and vesting in them a preferred right. Second, for a donation of an immovable to be valid, Article 749 of the Civil Code mandates it must be made in a public document, and the acceptance must also be in a public document made during the donor’s lifetime. The purported 1962 donation propter nuptias was not registered and, critically, its acceptance was not documented in a separate public instrument as required by law. Consequently, it did not validly transfer ownership to petitioners. Their possession, therefore, was merely that of a holder in bad faith against the registered owners. In an ejectment case, the issue is possession (possession), but the question of ownership is resolved to determine who has the better right to possess. Here, respondents, as registered owners by virtue of the registered sale, have the superior right to possession. Petitioners’ claim of laches failed because respondents’ registration of their deed provided a continuing assertion of right, and their benevolent tolerance explained their prior inaction in asserting possession.