ISABELA COLLEGES, INC. PETITIONER, VS. THE HEIRS OF NIEVES TOLENTINO-RIVERA, NAMELY: PABLO T. RIVERA, FELICULA R. PEREZ, DOLORES R. QUERIDO, OLGA BUNAG, LOLITA RIVERA, LUCIA FLO…

This is a petition for review on certiorari of the decision of the
Court of Appeals^[1] dated September 26,
1997 which reversed and set aside the decision of the Regional Trial Court,
Branch 20, Cauayan, Isabela dismissing the complaint filed by respondents
against petitioner. The facts are as follows:

The late Nieves Tolentino-Rivera (Nieves for short) and her husband, Pablo
Rivera, were married in 1921. The couple resided at Cauayan, Isabela and begot
13 children. On October 20, 1934, Nieves, still using her maiden name, filed an
application for a sales patent over a 13.5267-hectare land in Cauayan, Isabela.
Her application was approved and, after payment of the purchase price, Nieves
was issued Sales Patent No. V-119 on March 24, 1948.^[2] Thereafter, on March 29, 1948, OCT No.
P-216 was issued in the name of “Nieves Tolentino, married to Pablo Rivera.”

On August 15, 1949, Pablo Rivera and Nieves Tolentino sold to petitioner
Isabela Colleges, then newly-founded, four hectares of the land covered by OCT
No. P-216. The sale is evidenced by a deed of sale (Exh. 1) signed by both
Nieves Tolentino and Pablo Rivera, with Francisca R. Reyes, a member of
petitioner’s board of trustees, and Cecilia L. Ramos, its librarian, as
witnesses. The deed was notarized by Justice of the Peace Gaudencio R. Litao,
but it was not registered with the Register of Deeds.

Petitioner Isabela Colleges immediately occupied the land and used the same
as its new campus. One hectare was used for school buildings, two for an
athletics field, and the remainder was reserved for future projects. Starting
1950, the Isabela Colleges declared the land for tax purposes, but it did not
immediately secure a separate title to the property. Its president, Dr. Pura
Toledo, explained that the school did not then have enough money to have the
land surveyed. The Isabela Colleges secured title to the land only on January
13, 1970 when TCT No. 45890 was issued in its name.

After the death of Pablo Rivera on December 2, 1955, Nieves filed a petition
in the Court of First Instance of Isabela for the amendment of OCT No. P-216 to
reflect the change in her civil status from “married to Pablo Rivera” to
“widow.” Her petition was granted and OCT No. P-216 was accordingly amended.

In December 1976, the Office of the Register of Deeds of Isabela was burned.
Among the titles destroyed was TCT No. 45890 in the name of the Isabela
Colleges. The title was administratively reconstituted in 1978.

In 1980, Nieves went to the United States. Upon her return to the Philippines
in 1988, she filed a petition for the reconstitution of OCT No. P-216 and the
annulment of an illegally reconstituted original of OCT No. P-216 obtained by a
certain Paulino while Nieves was abroad. Both petitions were granted by the
trial court. The Register of Deeds of Isabela was ordered to reconstitute the
original OCT No. P-216 in the name of Nieves. The decision of trial court was
affirmed by the Court of Appeals in 1993.

In January 1988, Pablo Rivera Jr., George Lucero, Danilo de la Cruz, Alex
Cortez, Proceso Cortez, Olga R. Bunag, Corazon Menor, and Carlos Calderon, some
of whom are the respondents in this case, entered the property bought by Isabela
Colleges, prompting the latter to bring an action for forcible entry against
them. In February 1991, the Municipal Trial Court of Cauayan, Isabela rendered a
decision ordering the intruders to vacate the land in question. This decision
became final and executory.

In 1991, Nieves brought the present suit against the Isabela Colleges for
“Nullity of Titles, Deeds of Sale, Recovery of Ownership and Possession,
Cancellation of Titles, Damages with Preliminary Injunction.” Nieves alleged:
(1) that she was the exclusive owner of a parcel of land which had an area of
13.5267 hectares and was covered by OCT No. P-216 issued in her name by the
Register of Deeds of Isabela; (2) that sometime in 1950, petitioner Isabela
Colleges occupied four hectares of her land, allegedly by virtue of a sale
between petitioner and her husband Pablo Rivera; (3) that the deed of sale
between the Isabela Colleges and Pablo Rivera was void because the land sold was
her paraphernal property and the sale was made without her knowledge and
consent; and (4) that TCT No. T-45890, which was issued on August 29, 1978 in
the name of the Isabela Colleges, was fake and spurious. Nieves prayed that the
sale be declared void, that the title of the Isabela Colleges be cancelled, and
that she be placed in possession of the subject property.

In its Answer,^[3] the Isabela Colleges
asserted that the property in question had been sold to it with the knowledge
and consent of Nieves Tolentino who in fact signed the deed of sale. The
issuance of TCT No. T-45890 in its name enjoys the presumption of regularity.
Noting that Nieves’ complaint in 1991 was filed 42 years after the questioned
sale took place in 1949, the Isabela Colleges contended that the complaint was
barred by prescription and/or laches.

At the pre-trial conference, the parties agreed to limit the issues to the
following:

1. Is the land in question consisting of four hectares paraphernal or
   not?

2. Is the signature of Nieves Tolentino in the Deed of Sale dated August 15,
   1949 forged or not?

3. Is the cause of action of the plaintiff barred by prescription and/or
   laches; and

4. The losing party will pay to the prevailing party damages by way of
   attorney’s fees and costs in the amount of P10,000.00.^[4]

Two complaints-in-intervention were allowed by the trial court. One was filed
by Proceso Cortez,^[5] and the other was
by the group of Danilo de la Cruz, George Lucero, Alexander Cortez, Corazon
Menor, Olga R. Bunag, and Carlos Calderon. The intervenors claimed to be either
buyers in good faith or lessees of Nieves as to certain portions of the subject
land. These parties were the defendants in the ejectment case filed by
petitioner in 1988.

In March 1992, alleging that her signature in the questioned deed of sale had
been forged, Nieves filed a motion asking that the deed be submitted to the
National Bureau of Investigation for a determination of the authenticity of her
signature. The motion was granted by the trial court, but examination of the
document was not made as Nieves subsequently withdrew her motion.

Nieves’ deposition was ordered taken as she was then already 88 years old and
unable to walk. In fact, before petitioner’s counsel could finish her
cross-examination, Nieves died on January 15, 1993. She was substituted by her
heirs, herein respondents Pablo Rivera, Jr., Felicula R. Perez, Dolores R.
Querido, Olga R. Bunag, Lolita A. Rivera, Lucia R. Flores, Manuel T. Rivera,
Andres T. Rivera, Camilo T. Rivera, Emma R. Alfonso, and Antonia R. Perez.

On September 30, 1994, the trial court rendered its decision, the dispositive
portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the defendant Isabela
Colleges and against the plaintiffs heirs of Nieves Tolentino, namely, Pablo
Rivera, Jr., Felicula R. Perez, Dolores R. Querido, Olga R. Bunag, Lolita A.
Rivera, Lucia R. Flores, Manuel T. Rivera, Andres T. Rivera, Camilo T. Rivera,
Emma R. Alfonso and Antonia R. Perez, (1) dismissing the complaint; (2)
declaring the deed of sale dated August 15, 1949 and the titles of the defendant
Isabela Colleges valid; (3) declaring the defendant Isabela Colleges owner of
the land in question which is covered by Transfer Certificate of Title No.
T-45890 and the titles of the land as subdivided (Exhs. “9” to “34”); (4)
ordering the plaintiffs Heirs of Nieves Tolentino to pay to the defendant
P10,000.00; (5) ordering the plaintiffs Heirs of Nieves Tolentino to pay to the
Intervenor and cross-claimant Proceso J. Cortez, Sixty Seven Thousand
(P67,000.00) representing the purchase price of the lots he purchased from
Nieves Tolentino; and (6) ordering all the plaintiffs and intervenors to vacate
the land in question and remove all their buildings and other improvements
thereon it being understood that this decision will not in any way interfere
with the execution of the decision of the Municipal Trial Court of Cauayan,
Isabela, in Civil Case No. 1469, entitled, Isabela Colleges vs. Pablo Rivera,
Jr., et al. Let a copy of this decision be annotated at the back of Original
Certificate of Title No. P-216. Costs against the plaintiffs and
intervenors.

SO ORDERED.^[6]

On appeal, its decision was reversed. In its decision rendered on September
26, 1997, the Court of Appeals ruled:

WHEREFORE, in view of the foregoing, the judgment appealed
from is hereby REVERSED and SET ASIDE, and a
new one rendered, to wit:

1. Declaring the plaintiffs-appellants as the lawful owners of the property in
   question;

2. Declaring null and void and canceling Transfer Certificate of Title No.
   45890 as well as the subsequent Transfer Certificates of Titles proceeding
   therefrom, of the Register of Deeds of Isabela, covering the real property
   described therein in the name of defendant-appellee Isabela Colleges,
   Inc.;

3. Ordering defendant-appellee Isabela Colleges to execute the necessary deed
   of reconveyance of the aforesaid real property to the plaintiffs;

4. Ordering defendant-appellee Isabela Colleges to indemnify plaintiffs in the
   sum of P50,000.00 as and for attorney’s fees;

5. Appellant intervenor and cross-claimant Proceso J. Cortez is hereby declared
   owner and entitled to the possession of an aggregate area of three hundred
   seventy (370) square meters, covered by Exhibits “E”, “F” and “G”; and

6. Ordering defendant-appellee Isabela Colleges to pay the costs of the suit.

SO ORDERED.^[7]

Hence, this petition. Petitioner contends that the Court of Appeals erred in
ruling that: (1) the subject property is paraphernal despite Nieves’ admission
that it was purchased from the government during her marriage with Pablo Rivera
out of conjugal funds; (2) Nieves’ signature in the questioned deed of sale is
forged; and (3) laches cannot defeat the claim of a registered property owner
despite the long delay of 41 years.^[8]

First. The Court of Appeals ruled that the four-hectare land subject
of the 1949 sale is paraphernal property based on Nieves Tolentino’s deposition
that she occupied the 13-hectare land (which eventually was covered by OCT No.
P-216 in her name) and applied for a sales patent thereon when she was single.
However, her deposition shows that while Nieves initially claimed that she
applied for a sales patent when she was still single, she later admitted that
she filed her application for a sales patent in 1934, more than ten years after
her marriage to Pablo Rivera in 1921. Thus, she stated:

In any case, the date of the sales patent application is irrelevant for that
fact alone would not vest in her ownership over the subject land.

Neither is Nieves Tolentino’s allegation that she was already in possession
of the land even before her marriage to Pablo Rivera in 1921 material. The land
was acquired through sales patent under Commonwealth Act No. 141,^[10] and not through prescription or any other
mode of acquiring ownership.

Under C.A. No. 141, her application must be approved and the purchase price
paid before Nieves Tolentino could be granted a sales patent and issued a
certificate of title. It is undisputed that Nieves Tolentino was issued a sales
patent only on March 24, 1948, after she had complied with the foregoing
requirements. The land in question was thus acquired during her marriage to
Pablo Rivera.

Both the acquisition of the 13-hectare land and the sale of a portion thereof
to petitioner in 1949 took place when the Spanish Civil Code was still in
effect. Under Article 1407 of that Code, the property of the spouses are deemed
conjugal partnership property in the absence of proof that it belongs
exclusively to one or the other spouse. This presumption arises with respect to
property acquired during the marriage. It is not necessary to prove that the
property was acquired with conjugal funds.^[11]

To overthrow this presumption, the evidence to the contrary must be strong,
clear, and convincing. The registration alone of the subject land in the name of
Nieves Tolentino is insufficient to rebut the presumption. Nor is there clear
and convincing proof that the funds used in purchasing the four-hectare land
subject of the sale belonged exclusively to her. Nieves’ own deposition on this
question is vague and contradictory. Although she claimed that she used her
exclusive funds to pay for the land, she also said that the funds used came from
the proceeds of the sale of palay which they produced from the subject
land. Thus, in her deposition, Nieves stated:

It thus appears that the land was cultivated and tilled by the family, and
that the funds used in buying the land had been derived out of the proceeds of
this joint industry. Under Art. 1401 (2) of the Spanish Civil Code, property
obtained by the industry, wages or work of the spouses or either of them, among
others, belong to the conjugal partnership.

Indeed, other than its finding that Nieves Tolentino was already in
possession of the land and applied for a sales patent before she married Pablo
Rivera, the Court of Appeals cited no other evidence to prove that the land was
her paraphernal property. On the contrary, the evidence clearly shows that the
land was acquired during the marriage of Nieves Tolentino and Pablo Rivera. It
is thus presumed to be conjugal property and respondents’ evidence fails to
rebut this presumption.

Second. Having established that the land covered by OCT No. P-216 from
which had come the four-hectare portion purchased by petitioner is conjugal
property, we shall now consider the validity of the sale.

In contending that the sale is void, Nieves Tolentino argued that the land
sold was her paraphernal property and that the sale was done without her consent
because her signature in the deed of sale is a forgery. We are convinced that
Nieves Tolentino’s signature in the deed of sale was forged. We quote with
approval the following findings of the Court of Appeals, to wit:

Apart from the foregoing circumstances, it appears in the questioned document
itself a convincing piece of physical evidence which establishes beyond any
doubt that the signature therein purporting to be that of Nieves Tolentino was
not written by the latter but by a different hand. A closer look at the
questioned signature would show that it is merely copied from the original
signature of the late Nieves Tolentino. The difference is discernible to the
naked eye. In the questioned signature, there is a loop stroke that started at
letter “O” and looping further or whirling further to letter “T” and extended in
between letter “I” and letter “N” in the family name Tolentino. Likewise, all
the specimen signatures of the late Nieves Tolentino which she identified during
the deposition to be hers, consisting of several documents executed by her
during her lifetime, were written in a slanting position: whereas, the
questioned signature was entirely written in a straight manner. . . . .

The trial court likewise erred in disregarding the testimony of Attorney
Romulo Gines. The said lawyer testified that the signature “NIEVES TOLENTINO” in
the questioned Deed of Sale is not the signature of Nieves Tolentino because of
the flourish in the “T” and “O” which are absent in the other signatures of
Nieves Tolentino. That he is familiar with the signature of Nieves Tolentino as
he has seen her sign documents for at least fifty (50) times. The trial court
rejected his testimony on account that he did not present sufficient number of
documents to prove his claim and that the documents he saw which Nieves
Tolentino allegedly signed were executed long after 1949. Moreover, he is
disqualified to testify since he is not a handwriting expert.

Again, we disagree. The court a quo failed to consider that what Atty.
Romulo testified to is that he was familiar with the signature of Nieves
Tolentino as he saw her signed several documents in his presence, he being the
lawyer of the said Nieves Tolentino for a long time. Such testimony is more than
enough to establish the signature as a forgery.

Section 23, Rule 132 of the Rules of Court, provides:

Sec. 23. Handwriting, how proved. – The handwriting of a person may be
proved by any witness who believes it to be the handwriting of such person, and
has seen the person write, or has seen writing purporting to be his upon which
the witness has acted or has been charged, and has thus acquired knowledge of
the handwriting of such person. Evidence respecting the handwriting may also
be given by a comparison made by the witness or the court with writings admitted
or treated as genuine by the party against whom the evidence is offered, or
proved to be genuine to the satisfaction of the judge.” (Emphasis
supplied)

In the case at bar, Atty. Gines acquired familiarity of the signature of the
deceased, Nieves Tolentino, since he has been the lawyer of Nieves Tolentino for
a long time and he has seen her sign several documents in his presence.^[13]

The fact that Nieves Tolentino’s signature in the deed of sale is a forgery
does not, however, render the deed of sale void. For the land was conjugal
property and, under the Spanish Civil Code, the wife’s consent to the sale is
not required. Therefore, that her signature is a forgery is determinative only
of Nieves Tolentino’s lack of consent but not of the validity of the sale. Art.
1413 of the Spanish Civil Code provides:

In addition to his powers as manager the husband may for valuable
consideration alienate and encumber the property of the conjugal partnership
without the consent of the wife.

Nevertheless, no alienation or agreement which the husband may make with
respect to such property in contravention of this Code or in fraud of the wife
shall prejudice her or her heirs.

As the husband may validly sell or dispose of conjugal property even without
the wife’s consent, the absence of the wife’s consent alone does not make the
sale “in fraud” of her.

Third. The Court of Appeals ruled that, notwithstanding the lapse of
42 years, respondents’ action was not barred by prescription and/or laches. The
Court of Appeals held that since the subject land is registered, the title
covering the same is indefeasible and imprescriptible. On the other hand, laches
is inapplicable because the same cannot be used to perpetrate a fraud.^[14]

We disagree. The law provides that no title to registered land in derogation
of that of the registered owner can be acquired by prescription or adverse
possession.^[15] Nonetheless, while it is
true that a Torrens title is indefeasible and imprescriptible,^[16] the registered landowner may lose his
right to recover the possession of his registered property by reason of
laches.^[17]

Laches means the failure or neglect for an unreasonable and unexplained
length of time to do that which, by observance of due diligence, could or should
have been done earlier. It is negligence or omission to assert a right within a
reasonable time, warranting the presumption that the party entitled to assert
his right either has abandoned or declined to assert it.^[18] Laches thus operates as a bar in
equity.^[19]

Thus, in Catholic Bishop of Balanga v. Court of Appeals,^[20] a parcel of registered land was donated
by its owner in 1936. After the donee had been in possession of the land,
adversely, continuously, publicly, and peacefully for 49 years, the registered
owner filed an action to recover the property on the ground that the donation
was invalid. The trial court ruled in favor of the registered owner and ordered
the donee to vacate the land. On appeal, the Court of Appeals reversed the trial
court and ruled that the complaint for recovery of possession was barred by
laches. We affirmed the Court of Appeals as follows:

The time-honored rule anchored on public policy is that relief will be denied
to a litigant whose claim or demand has become “stale,” or who has acquiesced
for an unreasonable length of time, or who has not been vigilant or who has
slept on his rights either by negligence, folly or inattention. In other words,
public policy requires, for peace of society, the discouragement of claims grown
stale for non-assertion; thus laches is an impediment to the assertion or
enforcement of a right which has become, under the circumstances, inequitable or
unfair to permit.

. . . .

In applying the doctrine of laches, we had ruled that where a party allows
the following number of years to lapse from the emergence of his cause of
action, before instituting court action to enforce his claim, such action would
be barred by the equitable defense of laches: 36 years, 12 years, 50 years, 34
years, 37 years. 32 years, 20 years, 47 years, 11 years, 25 years, 40 years, 19
years, 27 years, 7 years, 44 years, 4 years, and 67 years.

. . . .

In this case, petitioner filed its complaint in court only after forty-nine
(49) years had lapsed since the donation in its behalf of the subject property
to private respondent’s predecessor-in-interest. There is nary an explanation
for the long delay in the filing by petitioner of the complaint in the case at
bench, and that inaction for an unreasonable and unexplained length of time
constitutes laches. As such, petitioner cannot claim nullity of the donation
as an excuse to avoid the consequences of its own unjustified inaction and as a
basis for the assertion of a right on which they had slept for so long.^[21]

So it is in the present case where the complaint questioning the validity of
the sale to petitioner Isabela Colleges was filed only after 42 years had
lapsed. Respondents could not feign ignorance of the sale because petitioner had
been in open, public, and continuous possession of the land which it had used as
its school campus since 1949. Nieves Tolentino claimed in her deposition that
she and her husband Pablo Rivera intended to donate the land to the Isabela
Colleges in exchange for their children’s free education, and that she started
suspecting that her husband had broken their agreement when the Isabela Colleges
charged them tuition fees. She further claimed that, after some investigation,
she discovered that Pablo Rivera had sold the land to the Isabela Colleges. Yet,
despite her discovery, she did not bring her action against petitioner until
1991, taking her 42 years before finally doing so. No reason had been given to
explain her delay.

Indeed, even if the sale to petitioner was made in bad faith, laches would
nonetheless apply. In Claveria v. Quingco,^[22] notwithstanding the fact that the
buyer had acted in bad faith because he knew that the vendor was not the
registered owner, it was held that the registered owner’s inaction for 36 years
had definitely foreclosed his right to recover the property.

Fourth. Proceso Cortez filed a complaint-in-intervention claiming
ownership over two parcels of land with an aggregate area of 370 square meters
by virtue of a sale between him and Nieves Tolentino in 1988. He initially
alleged that the lots were included in the four-hectare land covered by TCT No.
45890 of petitioner Isabela Colleges. On appeal, however, he asserted that these
lots were located outside petitioner’s land. He claimed to be a buyer in good
faith.

Even assuming that Cortez was not guilty of bad faith when he bought the land
in question, the fact remains that the Isabela Colleges was first in possession.
Art. 1544 of the Civil Code on double sales provides:

If the same thing should have been sold to different vendees, the ownership
shall be transferred to the person who may have first taken possession thereof
in good faith, if it should be movable property.

Should it be immovable property, the ownership shall belong to the person
acquiring it who in good faith first recorded it in the Registry of
Property.

Should there be no inscription, the ownership shall pertain to the person who
in good faith was first in the possession; and, in the absence thereof, to the
person who presents the oldest title, provided there is good
faith.

Indeed, petitioner has been in possession of the land since 1949. Between
petitioner and Cortez, therefore, the former had a better right for the latter
only bought the property in 1988 when it was already purchased by and titled
under the name of petitioner.

WHEREFORE, the Court of Appeals is REVERSED and the complaint and
complaints-in-intervention against petitioner Isabela Colleges, Inc. are
DISMISSED.

SO ORDERED.

Bellosillo, (Chairman), Quisumbing, Buena, and De Leon, Jr.,
JJ., concur.

^[2] Exh. A-3.

^[3] Rollo, p. 109.

^[4] Pre-Trial Order, p. 4;
Rollo, p. 118.

^[5] Annex H; Rollo, p. 128.

^[6] RTC Decision, pp. 16-17;
Rollo, pp. 194-195.

^[7] CA Decision, pp. 17-18;
Rollo, pp. 85-86.

^[8] Petition, p. 16; Rollo, p.
36.

^[9] TSN, pp. 5-6, Dec. 4, 1992.
(Emphasis added)

^[10] The Public Land Act.

^[11] 1 A. Tolentino, Civil Code of the
Philippines 425 (1987).

^[12] TSN, p. 7, Oct. 31, 1992.

^[13] CA Decision, pp. 12-14;
Rollo, pp. 80-82.

^[14] Id., pp. 16-17;
Id., pp. 84-85.

^[15] Act No. 496, §46, now §47, P.D.
No. 1529.

^[16] Reyes v. Court of Appeals,
258 SCRA 651 (1996); Dimayuga v. Court of Appeals, 129 SCRA 110 (1984).

^[17] Catholic Bishop of Balanga
v. Court of Appeals, 264 SCRA 181 (1996); De la Calzada-Cierras v.
Court of Appeals, 212 SCRA 390 (1992); Claverias v. Quingco, 207 SCRA 66
(1992); Marcelino v. Court of Appeals. 210 SCRA 444 (1992); Republic
v. Court of Appeals, 204 SCRA 160 (1991); Tambot v. Court of
Appeals, 181 SCRA 202 (1990); Bergado v. Court of Appeals, 173 SCRA 497
(1989); Golloy v. Court of Appeals, 173 SCRA 26 (1989); Lola v.
Court of Appeals, 145 SCRA 439 (1986); Miguel v. Catalino, 26 SCRA 234
(1968); Mejia de Lucas v. Gamponia, 100 Phil. 277 (1956).

^[18] Cormero v. Court of
Appeals, 247 SCRA 291 (1995); Solomon v. Intermediate Appellate Court,
185 SCRA 352 (1990); Vda. de Alberto v. Court of Appeals, 173 SCRA 436
(1989); Villamor v. Court of Appeals, 126 SCRA 574 (1988).

^[19] Jacob v. Court of Appeals,
224 SCRA 189 (1993); Heirs of Batiog Lacamen v. Heirs of Laruan, 65 SCRA
125 (1975).

^[20] Supra.

^[21] 264 SCRA 194, 198. (Emphasis
added)

^[22] 207 SCRA 66 (1992).