G.R. No. L-47385. July 30, 1979.
ST. PETER MEMORIAL PARK, INC. (now HIMLAYANG PILIPINO INC.) and BANCO FILIPINO SAVINGS & MORTGAGE BANK, petitioners, vs. REGINO CLEOFAS and LUCIA DE LA CRUZ, respondents.

FACTS

Respondents Regino Cleofas and Lucia de la Cruz filed an action to recover ownership and possession of Lot 719, Piedad Estate, Quezon City. They claimed that the lot was originally titled in the name of Antonio Cleofas, whose certificate of title was lost. Their efforts to reconstitute the title revealed that the lot was anomalously covered by Transfer Certificate of Title No. 21893 in the names of Aniceto Martin and Trino Narciso, which was subsequently transferred and eventually ended up in the name of petitioner St. Peter Memorial Park, Inc., which mortgaged it to co-petitioner Banco Filipino. The trial court initially ruled for the respondents, declaring all subsequent titles null and void and ordering reconstitution of the Cleofas title.
Petitioners secured a new trial from the Supreme Court based on newly discovered evidence, specifically a document (Sheet 15 of OCT No. 614) which they claimed referred to a different lot (Lot 640). After the new trial, the trial court reinstated its original decision, finding that the new evidence did not disprove the respondents’ ownership. The court ruled that the respondents’ title was superior and that the petitioners’ titles were void, awarding damages and attorney’s fees to the respondents.

ISSUE

The core issue is whether the action to recover the registered land had prescribed or was barred by laches, and whether the award of damages was proper.

RULING

The Supreme Court affirmed the trial court’s decision. The legal logic is anchored on the imprescriptible nature of an action to recover possession of land registered under the Torrens System. The Court cited Section 46 of Act No. 496 (the Land Registration Act), which provides that no title to registered land in derogation of that of the registered owner can be acquired by prescription or adverse possession. Since Antonio Cleofas was the original registered owner, his heirs’ action to recover the land from subsequent fraudulent holders does not prescribe.
The Court rejected the defense of laches, noting that the respondents filed the action immediately upon discovering the existence of the conflicting title in the names of Martin and Narciso. This prompt action negates any finding of unreasonable delay that would prejudice the petitioners. The case was distinguished from an action for reconveyance based on an implied trust, which prescribes in ten years; this was a direct recovery action based on a superior registered title.
Regarding damages, the Court upheld the award, qualifying the P40,000.00 as moral and exemplary damages due to the petitioners’ evident bad faith in disregarding the respondents’ rights. The award of P10,000.00 in attorney’s fees was also sustained as justified under the circumstances. The decision reinforces the principle that a registered owner’s right to recover possession is perpetual and indefeasible against holders of fraudulently derived titles.