RODOLFO L. CORONEL, PETITIONER, VS. HONORABLE INTERMEDIATE APPELLATE COURT AND ELIAS MERLAN, BRIGIDO MERLAN, JOSE MERLAN, TEODORICO NOSTRATIS, SEVERO JECIEL, SANTIAGO FERNAN AND…

Coronel versus Intermediate Appellate Court

The Case

This is a petition for review brought by Rodolfo Coronel against the Intermediate Appellate Court and the Merlan family and their co-defendants. Coronel sued to recover possession of a parcel of land registered in his name, claiming the occupants were mere tenants at will. The defendants answered that they had never sold their inherited one-third undivided share in the land, and that the title Coronel held had wrongly swallowed that share. The case matters because it tests the weight of the Torrens certificate against the equitable remedy of reconveyance, and because it fixes when prescription and laches begin to run against a co-owner who has always been in possession.

Procedural History

Coronel filed a complaint for recovery of possession before the then Court of First Instance of Cavite. The trial court ruled in favor of all the defendants and the intervenor, dismissed the complaint, and instead ordered the immediate partition of the land in accordance with the original co-ownership, declaring Transfer Certificate of Title No. T-75543 null and void. On a later motion, the trial court amended its decision by ordering Coronel to render an inventory and accounting of all palay harvests and to pay the defendants' counsel four thousand pesos in professional fees. Coronel appealed. The Intermediate Appellate Court, now the Court of Appeals, affirmed the decision and the order, adding a declaration that the defendants are the absolute owners of the remaining one-third portion pertaining to Bernabela Lontoc. Coronel then came to the Supreme Court by petition for review, assigning three errors.

Facts

The original lot of the Naic Estate was registered in the names of several co-owners, among them Bernabela Lontoc, who held a two-eighths share equivalent to twelve thousand one hundred eighty-nine square meters. When Lontoc died in 1945, she was survived by three sets of heirs: Bernardino Merlan; the children of her son Gabriel, namely Jose, Brigido, Graciano, Agapito and Corazon Merlan; and Daniel and Paz Anuat. In 1950, Bernardino Merlan and the two Anuats sold their two-thirds undivided portion to the spouses Ignacio Manalo and Marcela Novelo. The Merlan brothers never sold their share.

In 1960, the old title was cancelled and a new one issued, carrying the same registered co-owners with an annotation of that 1950 sale. In 1968 the lot was subdivided, and Lontoc's portion became Lot 1950-A. In 1970, Ignacio Manalo sold his interest to the spouses Mariano Manalo and Jorga Lagos. The deed conveyed only the twenty gantas of seedling that Ignacio had bought, yet the new certificate issued in the Manalos' name covered the whole of Lot 1950-A, with no mention of the Merlans' one-third share.

Relying on that certificate and on the sketch plan, Rodolfo Coronel bought Lot 1950-A from the Manalos for twenty-seven thousand pesos in 1974, and a new title, Transfer Certificate of Title No. T-75543, was issued in his name. The Merlan brothers had remained in open, peaceful and adverse possession of their one-third share since before 1950. They first learned of Coronel's claim over the whole lot in 1975, when they were served with his complaint.

Issues

• Whether or not the claim of the private respondents over their one-third share is barred by the statute of limitations or by estoppel by laches.
• Whether or not the petitioner is a purchaser in good faith and for valuable consideration of the land in question.
• Whether or not Transfer Certificate of Title No. T-75543 in the petitioner's name may be declared null and void.

Applicable Provisions

The decision refers to Article 1391 of the New Civil Code, which the petitioner invoked for his four-year prescriptive period:

The following actions must be brought within four years: 1. An action for nullity of a contract or a registrable act or instrument, from the time the cause of action accrues.

The Court held this period inapplicable, because the private respondents' counterclaim was in substance an action for reconveyance and to quiet title, which does not prescribe while they are in possession.

The appellate court also applied Article 845 of the New Civil Code on the right of accretion among co-heirs, which the Supreme Court left undisturbed in its modification of the judgment.

Ruling

On the first issue, the Court held that the claim had not prescribed. The private respondents' counterclaim was in effect a reconveyance of their one-third undivided share, and as lawful possessors and owners their cause of action falls within the settled rule that an action to quiet title to property in one's possession is imprescriptible. Their undisturbed possession of more than twenty-five years gave them a continuing right to seek the aid of a court of equity. If at all, their right to quiet title, to seek reconveyance and to annul the petitioner's title accrued only in 1975, when they were first made aware of an adverse claim, and only then did the statutory period begin to run.

On laches, the Court defined the doctrine and found no bar:

Laches has been defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.

The private respondents had always been in peaceful possession, exercising ownership for more than twenty-five years, disrupted only in 1975 when the petitioner tried to remove them by virtue of his Torrens title. They resisted immediately.

On the second issue, the Court refused to treat the petitioner as a purchaser in good faith who could rely absolutely on the clean face of the certificate. Neither the private respondents nor their co-owners ever sold the former's share, and Ignacio Manalo resold only the two-thirds share to the petitioner's predecessor. Whether the inclusion was fraud or the mistake of a registry employee was unclear, but the one-third portion was mistakenly included in the Manalos' title. The Court applied equitable considerations, stressing that the Torrens system may not be utilized to perpetrate fraud and chicanery, and that the simple possession of a certificate of title does not necessarily make the possessor the true owner of all the property described therein.

On the third issue, the Court found no reversible error in recognizing the private respondents' ownership of one-third of the lot. The petitioner is bound to recognize the lien in their favor which was mistakenly excluded from the Torrens title of his predecessor-in-interest. The Court, however, deleted the declaration voiding the petitioner's certificate, and instead ordered the segregation of the one-third portion.

Doctrine

An action to quiet title to property in one's possession is imprescriptible, and the period to seek reconveyance and annul an adverse title accrues only when the possessor is first made aware of the adverse claim. Laches does not run against a co-owner who has continuously and peacefully possessed his share. A Torrens certificate does not by itself make the holder the true owner of land mistakenly or fraudulently included, and the registered owner is bound to recognize a lien in favor of the true owner, who may seek reconveyance as the equitable remedy.

Disposition

The petition was dismissed and the questioned decision and order affirmed, with the modification that the declaration voiding Transfer Certificate of Title No. T-75543 was deleted, and the Registrar of Deeds of Cavite was ordered to segregate the one-third portion of four thousand sixty-three square meters, issue a new title in favor of the heirs of Gabriel Merlan, and issue another title over the remaining two-thirds in favor of Rodolfo Coronel.

Remember This

The single line to memorize is that possession by the true owner makes the action to quiet title imprescriptible, and the Torrens certificate cannot shield a title that mistakenly included another's land. Examiners use this case to test prescription and laches against a possessor, the good-faith purchaser rule, and the equitable remedy of reconveyance.