G.R. No. 230399. June 20, 2018.
DEPARTMENT OF EDUCATION, CULTURE AND SPORTS, (NOW DEPARTMENT OF EDUCATION), REPRESENTED BY ITS REGIONAL DIRECTOR, TERESITA DOMALANTA, PETITIONER, VS. HEIRS OF REGINO BANGUILAN, NAMELY: BENIGNA GUMABAY, FILOMENA BANGUILAN, ESTER KUMMER, AIDA BANGUILAN, AND ELISA MALLILLIN, RESPONDENTS.

FACTS

The respondents, heirs of the late Regino Banguilan, filed a complaint for recovery of possession against the Department of Education (DepEd). They claimed ownership over a parcel of land in Tuguegarao City, covered by Original Certificate of Title No. 10728 in Regino’s name. They alleged that before World War II, DepEd officials sought and obtained Regino’s permission to build temporary school structures on the land. Over time, these were replaced with permanent buildings for the Caritan Norte Elementary School. After Regino’s death, his heirs demanded rent or purchase of the land from the school, but no payments were made.
DepEd admitted occupying the land and constructing school buildings but denied the heirs’ ownership claims. It asserted possession in the concept of an owner for over fifty years, arguing the action was barred by prescription and laches. The Regional Trial Court (RTC) recognized Regino’s ownership but dismissed the complaint, holding that laches and prescription had barred the heirs from recovering possession. The heirs appealed to the Court of Appeals (CA).

ISSUE

Whether the heirs’ action for recovery of possession is barred by prescription and laches.

RULING

The Supreme Court denied the petition and affirmed the CA decision, ruling that prescription and laches did not bar the action. The land is registered under the Torrens system, making the title imprescriptible. Prescription does not run against registered owners. For laches to apply, the defendant’s possession must be adverse, not by mere tolerance. Here, DepEd’s entry and occupation were by permission of the registered owner, Regino Banguilan. Possession by tolerance is not adverse; it becomes adverse only upon a repudiation of that tolerance communicated to the owner. DepEd failed to prove any such clear repudiation. Its continued occupation, even after demands for rent, did not automatically convert its possession into one of adverse claim. Consequently, the heirs’ right to recover possession, as lawful possessors derived from the registered owner, was not lost. The Court upheld the CA’s application of Article 448 of the Civil Code, giving the landowner the option to appropriate the school buildings after indemnifying DepEd for necessary and useful expenses, or to oblige DepEd to purchase the land.