G.R. No. 87550 ; February 11, 1991
Divina J. Victoriano, petitioner, vs. Hon. Court of Appeals and Heirs of Crispin Arcilla, represented by Ladislawa A. Masigla, respondents.

FACTS

Petitioner Divina J. Victoriano discovered that Lot No. 897 was registered under the name of her grandfather, Cirilo Tamio. She secured an extrajudicial partition from Tamio’s heirs, waiving their shares in her favor, and obtained a Transfer Certificate of Title (TCT No. 124731) in her name. This action prompted the heirs of Crispin Arcilla, represented by Ladislawa A. Masigla, to file a complaint for reconveyance. They claimed their father, Crispin Arcilla, had purchased the lot from Cirilo Tamio in 1927 and they had been in continuous possession since then. However, they could not produce a formal deed of sale as evidence.
The trial court ruled in favor of Victoriano, declaring her the lawful owner, primarily due to Masigla’s failure to present a written deed of sale proving the transfer. On appeal, the Court of Appeals reversed the decision, declaring the Arcilla heirs as the true owners. The appellate court found that the trial court erroneously relied on the Statute of Frauds, which applies only to executory contracts, and that the Arcilla heirs’ long-term possession and other circumstances sufficiently evidenced a consummated sale.

ISSUE

Whether the Court of Appeals erred in reversing the trial court’s decision and declaring the Arcilla heirs as the owners of Lot No. 897, despite the absence of a written deed of sale and based on principles not explicitly raised below.

RULING

The Supreme Court upheld the decision of the Court of Appeals. The trial court incorrectly applied the Statute of Frauds, which under Article 1403(e) of the Civil Code requires agreements for the sale of real property to be in writing, but this principle is applicable only to executory contracts. The contract between Cirilo Tamio and Crispin Arcilla was consummated, as evidenced by partial performance taking it out of the statute’s operation. The Arcilla heirs demonstrated this performance through their undisturbed possession since 1927, possession of the owner’s duplicate title, a “Sinumpaang Salaysay” authorizing the sale, introduction of improvements, payment of real property taxes, and the lack of any claim by Tamio’s immediate heirs over the decades.
Furthermore, the Court affirmed the application of laches against Victoriano. While prescription cannot defeat a registered title under Section 47 of Presidential Decree No. 1529, laches operates as an equitable bar. Victoriano’s predecessor-in-interest and his heirs took no action to contest the Arcilla heirs’ possession for over fifty years. This prolonged inaction, coupled with the Arcilla heirs’ established possession, prejudiced their position, thereby precluding Victoriano from recovering possession based on her subsequently acquired title. The appellate court’s mention of the Statute of Frauds and laches was not to raise new issues but to correct the trial court’s legal errors and address the substantive merits of the reconveyance claim.