CRESENCIA ALMARZA, PETITIONER, VS. ASUNCION ARGUELLES, GILDA ARGUELLES, GIL PANCRUDO, BALBINA PANCRUDO AND HON. JUDGE MIDPANTAO L. ADIL, RESPONDENTS.

Almarza versus Arguelles

The Case

Cresencia Almarza, the petitioner, against Asuncion Arguelles, Gilda Arguelles, Gil Pancrudo, Balbina Pancrudo, and the presiding judge of the trial court, the respondents. The private respondents sued to recover a parcel of land covered by their Torrens certificate of title, and the petitioner countered with a claim for reconveyance, insisting that she and her late husband had bought that very portion from the respondents' own predecessor long before the title was issued. The case matters because it fixes the rule on when an action for reconveyance prescribes, and it shows that a Torrens certificate, however conclusive on its face, cannot be used to defeat a prior owner in actual possession whose land was swept into the title by mistake.

Procedural History

The private respondents filed a complaint for recovery of the disputed portion and for damages before the then Court of First Instance of Iloilo, Branch Two. The petitioner answered and set up a counterclaim for reconveyance in her favor. After trial, the trial court ruled for the private respondents, ordering the petitioner to vacate the land and to pay the costs, and it dismissed her counterclaim on the ground that her action for reconveyance had prescribed, more than ten years having elapsed from the issuance of the certificate of title. From that decision the petitioner came directly to the Supreme Court on a lone question of law, without passing through the intermediate appellate court.

Facts

Lot 5815 of the Cabatuan Cadastre in Iloilo originally belonged to Romualdo Grana, the predecessor in interest of the private respondents. In 1929 he sold a portion of about 7,300 square meters to the petitioner and her husband, the late Leon Almarza. After the sale that portion was physically segregated, and the spouses took possession, cultivating it, gathering its produce, and declaring it in their names for taxation. The deed of sale was lost during the war, but Laura Pancrudo, mother of two of the private respondents, later executed an affidavit acknowledging the sale, and on the strength of that affidavit the Provincial Assessor issued a new tax declaration to Leon Almarza, marking the portion as Lot 5815-B.

Before the cadastral court, Josefa Malote, mother of the other two private respondents, presented only a tax declaration and a tax receipt covering the remaining portion, Lot 5815-A. On the strength of that evidence the cadastral court adjudicated the whole of Lot 5815 to the Pancrudos, and a certificate of title covering the entire lot was issued in their names in May 1951. Laura Pancrudo died later that year.

In April 1977, twenty six years after the title was issued, the private respondents sued the petitioner to recover the 7,300 square meter portion she had occupied since 1929. She resisted and counterclaimed for reconveyance. The trial court upheld the title and held her claim barred by prescription, and the case reached the Supreme Court on that single question of law.

Issues

• Whether or not the possessor of a parcel of land in the concept of owner, after the lapse of more than ten years from the issuance of a Torrens certificate of title to another person, may still ask that the land be reconveyed to her.
• Whether or not the inclusion in the certificate of title of a portion over which the registered owners never asserted any claim is void and of no effect.
• Whether or not the private respondents are barred by laches from asserting their right under the certificate of title after twenty six years of neglect.

Applicable Provisions

The decision rests on the settled rule on the remedy of reconveyance, which the Court states in these words:

The remedy of the landowner whose property has been wrongfully or erroneously registered in another's name is, after one year from date of the decree, not to set aside the decree, but respecting the decree as incontrovertible and no longer open to review, to bring an ordinary action in the ordinary court of justice for reconveyance or if the property has passed into the hands of an innocent purchaser for value, for damages.

This is the remedy the petitioner invoked in her counterclaim, and the Court's whole analysis turns on whether she availed of it seasonably.

Ruling

On the first issue, the Court reversed the trial court and held that the action for reconveyance had not prescribed. The petitioner had possessed the land as owner since 1929, and her undisturbed possession gave her a continuing right to seek the aid of a court of equity to determine the nature of an adverse claim and its effect on her title. An action for reconveyance, the Court explained, is in effect an action to quiet title against a plaintiff in possession, and such an action is imprescriptible. Even if prescription could be invoked, it would run only from the time the possessor was made aware of a claim adverse to her own, and here the petitioner learned of the adverse claim only when summons was served on her in the complaint. Her counterclaim was therefore timely.

On the second issue, the Court held that the inclusion of the disputed portion in the certificate of title was void and of no effect, because the cadastral court had no jurisdiction to decree a lot to persons who put no claim in it and never asserted any right of ownership over it. Josefa Malote had presented evidence covering only Lot 5815-A, and so the Pancrudos never claimed the portion in dispute.

On the third issue, the Court held that the private respondents were guilty of laches. They obtained their title in May 1951 but sued only in April 1977, and that unreasonable delay in asserting their right meant they had abandoned or waived whatever right they held under the certificate. The Court closed by refusing to anchor its decision on a narrow and literal reading of a statutory prescription devoid of any shadow of moral right, warning that to do so would put a premium on land grabbing and violate the principle that no person shall unjustly enrich himself at the expense of another.

Doctrine

An action for reconveyance filed by a possessor in the concept of owner is in effect an action to quiet title, and it is imprescriptible. If prescription is invoked at all, it runs only from the time the possessor is made aware of a claim adverse to her own. A certificate of title is not absolute against a prior owner in possession whose land was erroneously included, because the inclusion of a portion over which the registered owners never asserted any claim is void for want of jurisdiction in the land registration court. Finally, a registered owner who sleeps on his right for an unreasonable length of time is barred by laches and is deemed to have abandoned or waived it.

Disposition

The Court reversed and set aside the judgment, ordered the private respondents to segregate the 7,300 square meter portion and reconvey it to the petitioner, and directed the Register of Deeds to cancel the old certificate and issue new ones to the petitioner and to the private respondents for their respective portions, without costs.

Remember This

Memorize the line that an action for reconveyance by a possessor in the concept of owner is imprescriptible, and that prescription, if any, runs only from notice of the adverse claim. Examiners use this case to test the conflict between the conclusiveness of a Torrens title and the equity of a prior possessor, and to test laches as a bar to a registered owner who delays for decades.