JOSE FERNANDO, JR., ZOILO FERNANDO, NORMA FERNANDO BANARES, ROSARIO FERNANDO TANGKENCGO, HEIRS OF TOMAS FERNANDO, REPRESENTED BY ALFREDO V. FERNANDO, HEIRS OF GUILLERMO FERNANDO…

Fernando versus Fernando

The Case

This is a petition for review on certiorari brought by the heirs of Jose Fernando and Antonia Fernando against the heirs of Germogena Fernando and the intervenors Leon Acuna and Hermogenes Fernando. The petitioners sued for the partition of a parcel of land covered by an old Torrens certificate of title, claiming it descended to them undivided from their common ancestors. The case matters because it tests the meeting point of two great principles: the indefeasibility and imprescriptibility of a Torrens title, on one hand, and the equitable bar of laches, on the other. It teaches when the registered owner, or his heirs, may lose the right to recover registered land because of unreasonable delay.

Procedural History

The petitioners filed a complaint for partition before the Regional Trial Court of Malolos, Bulacan, Branch 84. The defendants admitted the allegations and did not oppose the partition. Leon Acuna and Hermogenes Fernando were allowed to intervene, each claiming portions of the land by virtue of earlier cadastral adjudications and deeds of sale. The trial court ruled in favor of the petitioners. It held that the 1929 cadastral decision subdividing the land had never been implemented, that it had already prescribed, and it ordered the reversion of the disputed lot to the ownership of the registered owners and its partition among the petitioners, excluding the portions already sold to Acuna and to Ruperta Sto. Domingo Villasenor. All the parties except Acuna appealed. The Court of Appeals reversed and set aside the trial court's decision and dismissed the complaint. The petitioners then elevated the matter to the Supreme Court through a petition for review on certiorari under Rule 45.

Facts

A parcel of land in San Jose, Baliuag, Bulacan, was registered in 1927 under an original certificate of title in the names of Jose A. Fernando, married to Lucila Tinio, and Antonia A. Fernando, married to Felipe Galvez. When the registered owners died intestate, the property remained undivided among their heirs.

In 1929, the Cadastral Court of Baliuag rendered a decision subdividing one of the lots, Lot 1303, among several claimants. The registered owners themselves prayed for the subdivision. Jose Fernando was allotted one portion, Antonia Fernando another, and the rest went to Antonio Fernando, to the spouses Jose Martinez and Gregoria Sison, and to the spouses Ignacio de la Cruz and Salud Wisco. The persons named in that decision, and later their heirs and assigns, took possession of their respective portions and held them peacefully and without contest for more than seventy years. They never completed the titling of their shares. Salud Wisco later sold her portion to Simeon Cunanan, who in turn sold it to Leon Acuna.

In 1997, the petitioners, who are the heirs and successors of the registered owners, filed a complaint for partition, asking that the property be divided into eight equal parts. They claimed that the 1929 decision had never been implemented and that the entire lot still belonged to them under the old title. Acuna and Hermogenes Fernando intervened, invoking the 1929 adjudication and a later 1980 decision of the Court of First Instance of Baliuag that had distributed the adjoining lot among its claimants.

Issues

• Whether or not the ownership of Lot 1303 and the Sapang Bayan portion covered by the original certificate of title should revert to the descendants and heirs of the late spouses Jose Fernando and Lucila Tinio and of the late spouses Antonia Fernando and Felipe Galvez.
• Whether or not a title registered under the Torrens system is the best evidence of ownership of land and constitutes notice against the whole world.

Applicable Provisions

Section 47 of Presidential Decree Number 1529, the Property Registration Decree, provides:

No title to registered land in derogation of the title of the registered owner shall be acquired by prescription or adverse possession.

This is the rule of imprescriptibility that the petitioners invoke, and the Court accepts it as the starting point before applying the equitable exception.

Article 1456 of the Civil Code provides:

If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

This supplies the remedy of reconveyance for the true owners whose land was wrongfully included in the title of another.

Ruling

On the first issue, the Court ruled against the petitioners. It agreed with the Court of Appeals that the petitioners' claim over Lot 1303 could no longer prosper. The 1929 cadastral decision had already adjudicated the lot to persons other than the registered owners, and the petitioners did not dispute this. The failure of those persons to secure their own titles did not mean the entire lot still belonged to the registered owners. While a Torrens title is indefeasible and the right to recover registered land is generally imprescriptible, the Court held that the registered owner may lose that right by laches. Laches means the failure or neglect, for an unreasonable and unexplained length of time, to do what by due diligence could or should have been done earlier. Given the respondents' decades of possession under a court judgment and the registered owners' long inaction, the Court held that the right to recover was already a stale demand and was barred by laches.

The Court also held that the title of the petitioners' ascendants wrongfully included lots belonging to third persons. Since the registered owners themselves prayed for the subdivision, they held the property under an implied trust for the benefit of the true owners. The aggrieved parties could recover by reconveyance so long as the land had not passed to an innocent purchaser for value.

On the second issue, the Court recognized that a Torrens title is the best evidence of ownership and is notice against the whole world, but held that this did not save the petitioners. The title itself showed that the land had been subdivided and adjudicated to others, and equity would not permit the petitioners to reclaim what their own ancestors had asked the cadastral court to distribute.

Doctrine

A Torrens title is indefeasible, and under Section 47 of the Property Registration Decree no title to registered land may be acquired against the registered owner by prescription or adverse possession. The right to recover possession of registered land is therefore generally imprescriptible, because possession is a mere consequence of ownership.

But this rule has an equitable exception. The registered owner, or his heirs, may lose the right to recover the land by laches, which is the failure or neglect, for an unreasonable and unexplained length of time, to assert a right that could have been asserted earlier. Its elements are conduct by the defendant giving rise to the situation, delay by the complainant after knowledge and opportunity to sue, lack of notice to the defendant that the right will be asserted, and injury or prejudice to the defendant if the relief is granted.

Where land is acquired through mistake or fraud, the person obtaining it becomes a trustee of an implied trust for the benefit of the true owner under Article 1456 of the Civil Code, and the latter may seek reconveyance while the land has not passed to an innocent purchaser for value.

Disposition

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals, which had reversed the trial court and dismissed the complaint for partition, with costs against the petitioners.

Remember This

Memorize this line: a Torrens title is imprescriptible, but the registered owner may still lose the right to recover the land by laches. Examiners use this case to test the exception to the indefeasibility of Torrens titles, and to test implied trusts and reconveyance under Article 1456 of the Civil Code.