G.R. No. L-78178 April 15, 1988
DELIA BAILON-CASILAO, LUZ PAULINO-ANG, EMMA PAULINO-YBANEZ, NILDA PAULINO-TOLENTINO, and SABINA BAILON, petitioners, vs. THE HONORABLE COURT OF APPEALS and CELESTINO AFABLE, respondents.

FACTS

The petitioners, co-owners of a parcel of land covered by OCT No. 1771, filed an action for recovery of property and damages against private respondent Celestino Afable in 1981. The land was originally registered in 1931 in the names of six co-owners, including petitioners and their predecessors. In 1948 and 1949, two of the original co-owners, Rosalia and Gaudencio Bailon, sold the entire property through separate transactions to Donato Delgado and Ponciana Lanuza, who later consolidated ownership. Lanuza subsequently sold the land to Afable in 1975. All deeds of sale erroneously stated the land was unregistered. The petitioners, who did not consent to these sales, sought to recover their shares.
The trial court ruled that Afable validly acquired only the undivided shares of Rosalia and Gaudencio, making him a co-owner with the petitioners. It ordered partition, restoration of possession of the petitioners’ shares, and awarded damages. The Court of Appeals affirmed that prescription did not run against the co-owners but held the petitioners guilty of laches for their long inaction, thereby dismissing their complaint. The petitioners elevated the case to the Supreme Court.

ISSUE

Whether the petitioners are barred by laches from recovering their shares in the co-owned property.

RULING

The Supreme Court granted the petition, set aside the Court of Appeals decision, and reinstated the trial court’s judgment. The Court held that laches did not apply under the circumstances. The legal foundation is Article 493 of the Civil Code, which provides that a sale by a co-owner affects only his undivided share. Consequently, the sales by Rosalia and Gaudencio transferred only their proportionate interests, making Afable a co-owner, not the sole owner. The proper remedy for the aggrieved co-owners is not annulment but an action for partition, which is imprescriptible.
Crucially, the Court found Afable was not a purchaser in good faith entitled to invoke the equitable defense of laches. He had actual knowledge of the defect in his title, as the certificate presented to him during a prior mortgage transaction clearly listed six co-owners. This should have prompted a diligent inquiry, especially since the petitioners were relatives of his wife. His subsequent actions, including an unsuccessful court petition to transfer the title and an attempt to have a petitioner sign a curative document, demonstrated his awareness of the flawed transaction. Laches requires clean hands; a party who purchases with knowledge of an infirmity cannot equitably claim prejudice from the sellers’ delay. Therefore, the petitioners’ action for partition was not barred.