G.R. No. 211845 , August 9, 2017
PEN DEVELOPMENT CORPORATION and LAS BRISAS RESORT CORPORATION, Petitioners, vs. MARTINEZ LEYBA, INC., Respondent.

FACTS

Martinez Leyba, Inc. (respondent) is the registered owner of three contiguous parcels of land in Antipolo, Rizal. Pen Development Corporation and Las Brisas Resorts Corporation (petitioners), which later merged into Las Brisas, owned an adjacent property. In 1968, respondent alleged that petitioners’ construction of a fence and subsequent resort complex encroached upon its titled land. Respondent sent multiple demand letters from 1968 to 1994, which petitioners ignored. A verification survey approved by the DENR in 1996 confirmed the encroachment, showing petitioners’ structures occupying portions of respondent’s lots totaling 3,454 square meters.
In 1997, respondent filed a Complaint for Quieting of Title, Cancellation of Title, and Recovery of Ownership with Damages. Petitioners countered that they purchased their land in good faith in 1967 and that it was respondent who was encroaching. The Regional Trial Court ruled in favor of respondent, ordering petitioners to vacate the encroached areas, remove improvements, and pay damages. The Court of Appeals affirmed the RTC decision but deleted the award for unrealized income, leading petitioners to elevate the case to the Supreme Court via a Petition for Review on Certiorari.

ISSUE

The core issue is whether the action for recovery of ownership and quieting of title filed by respondent had already been barred by laches.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The Court held that laches does not apply to defeat respondent’s imprescriptible right as a registered owner under the Torrens system. The legal logic is anchored on the principle of indefeasibility of a Torrens title. Under Section 47 of Presidential Decree No. 1529 (Property Registration Decree), no title to registered land in derogation of the title of the registered owner can be acquired by prescription or adverse possession. As the lawful registered owner, respondent’s right to recover possession of its property from any illegal occupant is imprescriptible. The passage of time, from the first notice in 1968 to the filing of the suit in 1997, does not erode this right.
The Court further clarified that the remedy of quieting of title is precisely available to remove a cloud on one’s title, such as the overlapping claim created by petitioners’ title. The verification survey, approved by the DENR, provided conclusive evidence of the encroachment. Petitioners’ claim of good faith was irrelevant to the core issue of ownership and the application of laches. The Court emphasized that the Torrens system is designed to guarantee the integrity of registered titles, and allowing laches to bar an action by a registered owner would undermine this stability. Therefore, respondent’s action was not barred, and it was entitled to recover its property.