JUANA LAUREL-MANILA, ET AL., PLAINTIFFS-APPELLANTS, VS. DIONISIO GALVAN, ET AL., DEFENDANTS-APPELLANTS.

Joint and direct appeal by plaintiffs, on points of law, from a
decision of the Court of First Instance of Pangasinan,
in its Civil Case No. D-48, dismissing, after trial on the merits, their
re-amended complaint for reivindicación, on
the ground of prescription; and by defendants, for refusal of the trial court
to grant their counterclaim for moral damages in the sum of P205,000.00, as not
having been sufficiently proved during the trial of the case.

As found by the court a quo, the facts of this case
are:

Mariano K. Laurel died on March
26, 1921 and he was survived by his wife, Celerina
(@ Elena) A. Nevado, and four (4) legitimate
children, namely, Procopio, Victorina,
Juana, and Angel, all surnamed Laurel. 
He left some personal and real properties, among which was a parcel of
land situated in Dagupan, Pangasinan,
and registered in his name under Original Certificate of Title No. 22435 of the
Register of Deeds of Pangasinan and designated
therein as its Parcel No. 1, which is the property involved in the present
litigation.

Shortly after said Mariano K. Laurel’s death, intestate proceeding
of his estate was filed, on April 15,
1921, in the Court of First Instance of Pangasinan
and the same was docketed therein as its Special Proceeding No. 876.  The above-mentioned property (O.C.T. No. 22435 of Pangasinan)
was included in the inventory of the decedent’s properties.

On March 19, 1925, the court issued an order finding that the estate
had no sufficient cash assets to pay its outstanding debts, and authorizing Procopio N. Laurel, as judicial administrator, upon his
motion, to sell a retro the property covered by Original
Certificate of Title No. 22435; wherefore said administrator on March 21, 1925,
executed a pacto de retro sale
of the property in favor of the spouses, Dionisio
Galvan and Carmen Cabrera, for the sum of P23,000.00, subject to the right of
redemption within a period of seven (7) years from the date of execution
thereof.  On March 31, 1925, the probate court approved the
sale a retro made by the Administrator.

After clearing the estate of its debts, the court ordered, on January 19, 1928, the adjudication of
all the remaining properties of said deceased Mariano K. Laurel in favor of his
above named children, subject to the right of usufruct of the widow, as
provided for under the Civil Code of 1889. 
Among the properties adjudicated to the children was Parcel No. 1 of
O.C.T. No. 22435 and the same was cancelled and registered in the names of said
children under Transfer Certificate of Title No. 6957, and designated therein
as its Parcel No. 2.

The estate or heirs of said Mariano K. Laurel failed to redeem
the property in question from the vendees a retro within the
seven (7) year-period stipulated in the pacto de
retro sale; hence, the Galvans consolidated
their ownership thereon and caused, in April, 1932, T.C.T. No. 6957 to be
cancelled and registered in their names under Transfer Certificate of Title No.
6958.

The Galvans and/or their
successors-in-interest have possessed the property in question openly,
continuously, adversely, in the concept of owners under color of title and in
good faith from 1925 up to the present time.

On September 16, 1954, plaintiffs, who are the successors-in-interest
(daughter and grandchildren) of deceased Mariano K. Laurel, filed their
original complaint, which was amended four (4) times, the last one being dated
December 10, 1958, to recover the above mentioned property (T.C.T. No. 6958)
from the defendants, claiming that the contract entered into by and between Procopio N. Laurel, as Judicial administrator, and the Galvans was not in reality a pacto
de retro sale, but an equitable mortgage; that the Galvans began posses­sing said property since 1932 as mere
mortgage creditors; and that the pacto de
retro sale was illegally contracted and was null and void for not having
complied with the essential requisites laid down in Sections 714 and 722 of the
old Code of Civil Procedure (Act No. 190) which was the law then in force when
the proceedings were then had.

In their amended answer to the re-amended complaint, defendants,
who are successors-in-interest of the Galvans (Dionisio Galvan having died during the pendency
of this suit and Carmen Cabrera having died before the filing thereof),
specifically denied its material allegations, set up the defense of laches and
prescription and counterclaimed for moral damages in the total amount of
P205,000.00, plus attorney’s fees in the sum of P5,000.00.

After due hearing thereon, and on the basis of the above narrated
facts, the court a quo, despite
its finding and declaration that the pacto de
retro sale was null and void for non-compliance with the requirements of
Sections 714 and 722 of the old Code of Civil Procedure (Act No. 190), ruled,
however, that plaintiffs’ action to recover the property in question has
already prescribed, since the present defendants, through themselves and their
predecessors-in-interest, the Galvans, have possessed
said property under claim of ownership, with just title and in good faith from
the year 1925 up to the filing of the suit in 1954; hence, the filing thereof
after 29 years had elapsed (1925 to 1954) is well beyond the prescriptive
period, as provided for in Sections 40 and 43 of the old Code of Civil
Procedure; and that defendants, being buyers in good faith, they acquired the
land by prescription, pursuant to Section 41 of the same Code.  Said court ruled, however, that defendants
are not entitled to moral damages for insufficiency of evidence.

Both parties, not being satisfied with the decision, plaintiffs
prosecuted their appeal directly to this Court on points of law; while
defendants first moved to reconsider the portions of the decision declaring the
pacto de retro sale null and
void, and refusing to award them moral damages, but when their motion was
denied, they like­wise appealed to this Court on factual issues, the total
amount (P205,000.00) involved in their claim for damages being within the
jurisdiction of this Court.

We find no reversible error in the dismissal of the
complaint.  Even granting that the order
of March 19, 1925, authorizing the sale was invalid in that it did not state
the amount of the debt of the deceased nor the value of his personal estate,
nor was a time and place for hearing and resolving the application previously
set, nor was due notice thereof ordered to be given to the persons interested
(although this is disputed by defendants), the unexplained interval of
twenty-nine (29) years that plaintiffs allowed to elapse (1925-1954) before
making any claim or instituting action constitutes laches
that places them in estoppel to question the
validity of the probate court’s order and of the transactions executed in
pursuance thereof (Go Chi Gun vs. Go Cho, 96 Phil.
622; Lucas vs. Gamponia, 100 Phil. 277).  Upon the strength of a court order, regular
on its face, Galvan and his wife purchased the property, openly and without
concealment, in 1925 for P23,000.00; consolidated their title in 1932, upon
expiration of the stipulated period of repurchase, and secured a certificate of
title in their name, holding the
property as owners uninterruptedly since 1925. 
Now that the value of these properties has undoubtedly increased, it
would be manifestly inequitable to permit plaintiffs-appellants to overturn the
entire transaction when they never lodged any protest nor have given any sign
of a desire to do so for almost three decades.

Plaintiffs-appellants cite American authorities to the effect
that the defense of estoppel by laches requires inaction for a period
comparable or equivalent to the statutory limitation applicable to their action
for recovery (Brief, pp. 30-32).  This is
the precise situation before us.  The
statute of limitations in force in 1925 (when the Court order was issued and
the property was sold) was the bid Code of Civil Procedure, Act 190; and the maximum
period for bringing actions under it was no more than ten (10) years (Act 190, secs. 40-43).  Plaintiffs’
inaction thus lasted almost three times as long as the maximum
period of prescription under the
applicable law.  Even if we were to
count the prescriptive period from 1932 when the Galvans
consolidated their title and obtained a
certificate in their name, plaintiffs would still be in laches for twenty-two (22) years, more than twice
as long as the prescriptive period
properly applicable.  Their demand is ob­viously
a stale one.

It is argued that the Galvans must have
completed the thirty (30) year-period of extraordinary prescription under the
new Civil Code, since their contract is null and void, and hence they lack just
title.  The glaring error in this
pretense lies in assuming that the Civil Code of the Philippines could retroactively apply to this
case, although the cause of action arose in 1925, long before the Code was
enacted.  Such a thesis is negated by the
Civil Code itself in its article 1116,^[1]
which provides:

“ART.  1116.  Prescription already running before the effectivity of this Code shall be governed by laws previously
in force; but if since the time this Code took effect the entire period herein
required for prescription should elapse,
the present Code shall be applicable, even though by the former laws a
longer period might be required.”

We, therefore, must rule that plaintiffs’ action is now barred and the present appeal devoid of
merit, it being unnecessary to discuss the other arguments advanced.

We now come to the appeal of the
defendants.  Defendants con­tend that the
lower court erred in not awarding them moral damages for the sum (P205,000.00) alleged in their
counterclaim against plaintiffs, considering that plaintiffs imputed bad faith
against them, thereby causing them
serious embarrassment.

Upon careful review of the records of the case, we find no grave
abuse of discretion in the trial court’s refusal to award moral damages to
defendants, since not only was the amount not proved, but the complaint was
apparently based on an honest mistake in the appreciation or interpretation of
the applicable law and jurisprudence.  It
has already been held that, as a general rule, it is not sound public policy to
place a penalty on the right to litigate (Estate of Buan
vs. Camaganacan,
G. R. No. L-21560, Feb. 28, 1966,
citing Tan Ti vs. Alveor, 26 Phil. 268), and there
are no circumstances in this case to justify an exception.

FOR THE FOREGOING REASONS, the appealed decision is hereby
affirmed.  No costs.

SO ORDERED.

Concepcion, C.J., Dizon,
Regala, Makalintal, Bengzon, J.P., Zaldivar, Sanchez,
and Castro, JJ., concur.

^[1]
See Osorio vs. Tan Jongko, 98 Phil. 56;
Francisco vs. De Borja, 98 Phil. 446, 458; Amar vs.
Odiaman, 109 Phil., 681.