G.R. No. 29161 & G.R. No. 29162 , December 29, 1928
JAMES J. RAFFERTY, plaintiff-appellant, vs. PROVINCE OF CEBU (and MUNICIPALITY OF CEBU), defendants-appellees.

FACTS

James J. Rafferty filed two consolidated cases against the Province of Cebu and the Municipality of Cebu. In the first case ( G.R. No. 29161 ), he alleged that the Province usurped a portion of his land (Lot No. 522) to create a park, constructed improvements, and refused to vacate upon demand. He also sought a right of way through adjacent lots. In the second case ( G.R. No. 29162 ), he claimed the Municipality constructed a street (Fructuoso Ramos Street) on a portion of his land (Lot No. 541) without his consent, causing damage.

The defendants asserted that Rafferty, through his agent E. Michael, sold the disputed portions of Lots Nos. 522, 523, and 541 to the Province for P226 in 1910. They argued that they had occupied and improved the land openly and adversely since then. Rafferty countered that the sale was void due to his agent’s lack of authority and fraud, and that he only discovered the fraud later. He filed the cases in 1926, approximately 15 years after the alleged sale.

The trial court dismissed Rafferty’s complaints and granted the defendants’ cross-complaint, ordering Rafferty to execute the necessary deeds to transfer title.

ISSUE

Whether Rafferty’s action to recover the properties and annul the 1910 sale, filed 15 years after the transaction, is barred by laches or prescription.

RULING

Yes, the action is barred by laches. The Supreme Court affirmed the trial court’s decision.

The Court found that Rafferty accepted the P226 consideration for the 1910 sale. The defendants, relying on the sale, took open, notorious, and continuous possession of the land, made valuable public improvements (incorporating it into Osmeña Park), and claimed ownership for 15 years without any challenge from Rafferty until 1926.

The Court held that even assuming the sale was initially voidable due to fraud or lack of authority, Rafferty’s inaction for an unreasonable period of 15 years, while the defendants acted in good faith and expended public funds on permanent improvements, constituted laches. He could not sleep on his rights and later seek to disavow the transaction to the prejudice of the province and municipality that had long relied on it. His excuse of being unable to “cope with such a powerful influence” was deemed untenable. The main questions were factual, and the trial court’s findings, supported by evidence, were upheld.