LA CORPORACION DE PADRES AGUSTINOS RECOLETOS, PLAINTIFF AND APPELLANT, VS. PEDRO CRISOSTOMO ET AL., DEFENDANTS AND APPELLEES.

La Corporacion de Padres Agustinos Recoletos versus Crisostomo

The Case

This is an action to recover possession of a number of small parcels of land. The plaintiff, La Corporacion de Padres Agustinos Recoletos, claims to be the owner of the parcels. The defendants, Pedro Crisostomo and others, resist the claim, and several of them assert that they have acquired title to their respective parcels by prescription of ownership, that is, by adverse possession. The case matters because it draws a precise line between two things that are often confused: the statute of limitations, which merely bars the remedy, and prescription of ownership, which actually transfers title. That distinction decides how a defendant must plead, and it is the heart of this decision.

Procedural History

The case was tried in the Court of First Instance. Judgment was rendered in favor of the plaintiff as to some of the parcels and against it as to the others. As to the parcels lost by the plaintiff, the trial court sustained the defendants' defense of prescription of ownership or adverse possession, on the evidence they submitted. The plaintiff appealed from that judgment. The case reached the Supreme Court on appeal, and the Supreme Court reviewed the record and affirmed the judgment appealed from.

Facts

The plaintiff corporation brought an action to recover possession of several small parcels of land, alleging that it was the owner of them. The defendants were the persons in possession of the respective parcels. Some of the defendants pleaded title by adverse possession in their answers. Others merely entered a general denial of the material allegations of the complaint.

At the trial, the defendants submitted evidence of their adverse possession of the parcels for the period required by law. The trial court accepted that evidence and sustained the defense as to some of the parcels, while ruling for the plaintiff as to the others.

On appeal, the plaintiff raised a procedural point. As to the defendants who had entered only a general denial, the plaintiff argued that evidence of adverse possession was not admissible under a general denial, and that such a defense must be specially pleaded. The Supreme Court therefore had to decide whether adverse possession of real property may be proved under a general denial, and this in turn required it to settle the true nature and effect of prescription.

Issues

• Whether or not evidence of adverse possession of real property may be admitted under a general denial, without the defense being specially pleaded.
• Whether or not adverse possession for the requisite period of time confers a title upon the possessor, or merely takes away the remedy of the title-holder.
• Whether or not the doctrine that the statute of limitations must be specially pleaded applies to title to real property acquired by adverse possession.

Applicable Provisions

Section 94 of the Code of Civil Procedure provides:

A defendant may answer by a general or special denial of the material allegations of the complaint, or by any new matter constituting a defense or counterclaim.

This fixes the two modes of answering, and the Court uses it to show that a defense which denies the plaintiffs title belongs under the first mode, the denial, and not under the second, new matter.

Section 40 of the Code of Civil Procedure, as described in the decision, provides:

Section 40 bars the owner's remedy after ten years.

This is the extinctive side of prescription, which merely bars the remedy and so must be specially pleaded.

Section 41 of the Code of Civil Procedure, as described in the decision, provides:

Section 41 vests in the adverse possessor after the same period of time a full and complete title.

This is the acquisitive side of prescription, which transfers ownership and so operates as a denial of the plaintiffs title, provable under the general issue.

Section 46 of the Land Registration Act provides:

Title to registered land in derogation to that of the registered owner cannot be acquired by prescription or adverse possession.

The Court expressly limits its ruling, noting that what it says about acquiring title to real property by adverse possession does not apply to titles registered under that Act.

Ruling

On the first issue, the Court held that evidence of adverse possession of real property is admissible under a general denial. A general denial puts in issue all the material allegations of the complaint, and the defendant must produce evidence tending to show the non-existence of the plaintiffs allegations. In an action to recover possession of land as owner, the plaintiff alleges a disseisin and its continuance by the defendant. The plaintiff need not allege the source and kind of title under which it claims, and is at liberty to introduce proof of any legal title it possesses. Conversely, the defendants are at liberty to introduce all legally admissible evidence tending to show that title is not in the plaintiff, including evidence that the legal title is in themselves.

On the second issue, the Court held that under the present law, adverse possession of real property for the requisite period confers a title upon the possessor. The Court explained that under the Civil Code, prescription was either acquisitive or extinctive. The former operated to transfer title to the possessor, and the latter extinguished the owner's right of action. Those Civil Code articles, however, have been repealed by the Code of Civil Procedure. As to personal property, the Code provides only that actions shall prescribe after four years, and says nothing as to title, so the owner's title is not lost by adverse possession of personal property and only the remedy is barred. As to real property, it is different, because the Code both bars the owner's remedy and vests a full and complete title in the adverse possessor. The Court put the rule this way:

Where prescription operates as a bar to the remedy only, it is a means of defense only. But when title is transferred by adverse use for the requisite period, it becomes a weapon of offense as well as of defense.

Hence, the adverse possessor may rely on the bar to the remedy, which is new matter and must be specially pleaded, or he may rely on the conferral of title, in which case evidence of adverse possession operates as a denial of the plaintiffs title and may be proved under the general issue.

On the third issue, the Court held that the doctrine in this jurisdiction that the statute of limitations must be specially pleaded does not govern title to real property by adverse possession. The Court declared that title by adverse possession and the statute of limitations are not convertible terms. One transfers ownership, the other bars a right of action. One is an absolute denial of the plaintiffs claim of ownership, while the other admits the ownership but interposes the statute as a bar to recovery. The Court also examined its earlier decisions and concluded that in none of them was the manner of pleading title by adverse possession fairly before the Court, so that none laid down a rule on the point.

Doctrine

First, prescription of ownership, or acquisitive prescription, transfers title to the adverse possessor, while the statute of limitations, or extinctive prescription, merely bars the remedy of the owner. Second, because acquisitive prescription transfers title, evidence of adverse possession of real property operates as a denial of the plaintiffs title and may be proved under a general denial, without a special plea. Third, a defense that merely bars the remedy, such as the statute of limitations, is new matter and must be specially pleaded. Fourth, the rule on adverse possession of real property does not apply to land registered under the Land Registration Act, since title to registered land cannot be acquired by prescription or adverse possession in derogation of the registered owner.

Disposition

The Supreme Court affirmed the judgment appealed from, with costs against the plaintiff as appellant, so the defendants kept the parcels awarded to them below.

Remember This

Memorize the line: title by adverse possession transfers ownership and is a denial of the plaintiffs title provable under a general denial, while the statute of limitations merely bars the remedy and must be specially pleaded. Examiners use this case to test the distinction between acquisitive and extinctive prescription, and the pleading rule that follows from it.