FRANCISCO, SEVERO, VALENTINA, RUSTICO, DOMINADOR & NICOMEDES, ALL SURNAMED BERGADO, PETITIONERS, VS. HON. COURT OF APPEALS (TWELFTH DIVISION) AND REPUBLIC OF THE PHILIPPINES, RE…

The property subject of this case is claimed by both the
petitioners and the Republic of the Philippines
under two separate deeds of sale executed by the same vendor.  The Republic was sustained by the trial court
and the Court of Appeals.^[1]
The petitioners are now before us, contending that the courts below have erred
and so should be reversed.

Disputed are some 5,900 square meters of land forming part of a
lot^[2]
situated in Pangasinan and covered by Original
Certificate of Title No. 16545 in the name of Alejandro Trinidad and Aniceta Soriano.  It was inherited by Marciana
Trinidad, their sole heir.  She
transferred it by virtue of an Escritura de
Compraventa dated May 3, 1928, to Pedro Bergado and Justina Galinato, the petitioners’ parents.^[3]
She then conveyed it again, this time through a Deed of Sale dated February 19, 1947, to the
Parent-Teacher Association of the Urdaneta
Community High School.^[4]

The petitioners claim the property by right of inheritance from
their parents.  The Republic says the
land was donated to it on July 26,
1977, by the said PTA.

In rejecting their appeal, the respondent court held that the
petitioners had slept on whatever right they might have had and were now barred
by prescription and laches from asserting it.  Moreover, their alleged right, such as it
was, was inferior to the title asserted by the Republic to the property in
question.

The petitioners contend that the Republic was itself barred from
putting up the defenses of prescription and laches
because these had not been pleaded earlier. 
These issues were not raised in the answer and neither were they
asserted at the pre-trial conference. 
The consequence is that these objections can no longer be allowed at
this late hour.

It is true that in Permanent Concrete Products, Inc. v. Teodoro,^[5]
we held that:

One of the objectives of pre-trial procedure is to take the trial
of cases out of the realm of surprise and maneuvering.  Pre-trial is primarily intended to make
certain that all issues necessary to the disposition of a case are properly
raised.  Thus, to obviate the element of
surprise, parties are expected to disclose at a pre-trial conference all issues
of law and fact which they intend to raise at the trial, except such as may
involve privilege or impeaching matter. 
The determination of issues at a pre-trial conference bars the
consideration of other questions on appeal.

However, this is a statement only of the general rule on the
procedure to be observed in pre-trials. 
It is subject to the specific exception emphasized in the later case of Gicano v. Gegato,^[6]
where Mr. Justice Andres R. Narvasa declared:

x x x We have
ruled that trial courts have authority and discretion to dismiss an action on
the ground of prescription when the parties’ pleadings or other facts on record
show it to be indeed time-barred; and it may do so on the basis of a motion to
dismiss, or an answer which sets up such ground as an affirmative defense; or
even if the ground is alleged after judgment on the merits, as in a motion for
reconsideration; or even if the defense has not been asserted at all, as where
no statement thereof is found in the pleadings, or where a defendant had been
declared in default.  What is essential
only, to repeat, is that the facts demonstrating the lapse of the prescriptive
period, be otherwise sufficiently and satisfactorily apparent on the record;
either in the averments of the plaintiff’s complaint, or otherwise established
by the evidence.

It was thus not improper for the respondent court to consider the
issue of prescription in determining the respective claims of the contending
parties.

The record shows that the disputed property had been in the
possession of the PTA since it acquired the same by virtue of the deed of sale
dated February 19, 1947,
and of the Republic of the Philippines
since July 26, 1977, date
of the deed of donation executed in its favor. 
The PTA and later the Republic had been constructing improvements on the
land which certainly could not have escaped the attention of the petitioners.  During all that time, the land was also
enclosed with a barbed wire fence and later with an adobe wall erected by the
school administration sometime “before 1965-1966.”

The fence and later the wall symbolized the PTA’s exclusive claim
of ownership to the disputed property. 
The construction of various infrastructures on the land – consisting of
the right wing of the main building, the administration building, the annex
thereof, the reading center, and the water reservoir, among other valuable
improvements – was also an unmistakable act of ownership which the petitioners
could not ignore.  Not one of them
protested.

In fact, the petitioners maintained their tolerant silence for
thirty-four years, breaking it only in 1981, when they filed their complaint to
nullify the private respondent’s title to the disputed land.^[7]
Significantly, one of their brothers, Fernando Bergado,
was the treasurer of the PTA who released the funds for most of the
aforementioned constructions.^[8]

An action for recovery of title to or possession of real property
or an interest therein can be brought only within ten years from the date the
cause of action accrues.^[9]
In the present case, the cause of action accrued as early as 1947 when the
property was sold to the PTA or at the very latest in 1965-1966 when the adobe
wall enclosing the property was erected. 
Counted from either year, the ten-year prescriptive period has
indisputably elapsed.  The petitioners’
complaint was clearly barred already when it was filed on October 21, 1981, almost three and a half decades after the PTA had taken
possession of the land.

An action for recovery of the title, or
possession of, real property or an interest therein, can only be brought within
ten (10) years after the cause of action accrues.  Prescription is rightly regarded as a statute
of repose whose object is to suppress fraudulent and stale claims from
springing up at great distances of time and surprising the parties or their
representatives when the facts have become obscure from the lapse of time or
death or removal of witnesses.^[10]

Independently of prescription, another obstacle has operated
against the petitioners, to wit, laches.  This impediment was explained by the Court in
the landmark case of Tijam v. Sibonghanoy^[11]
thus:

Laches in a general sense is failure or
neglect, for an unreasonable and unxplained 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 doctrine of laches or of “stale
demands” is based upon grounds of public policy which requires, for the
peace of society, the discouragement of stale claims and, unlike the statute of
limitations, is not a mere question of time but is principally a question of
the inequity or unfairness of permitting a right or claim to be enforced or
asserted.

The petitioners argue that neither prescription nor laches can operate against them because their title to the
property is registered under the Torrens system and
therefore imprescriptible.  Additionally, they contend that in cases of
double sale, assuming the sale to the private respondent was also valid, the
buyer who registers the property first shall be preferred.

The principles cited, while admittedly correct, are nonetheless
not applicable to the case at bar.  The
reason is that what the petitioners registered was not their ownership of the
property but the Escritura de Compraventa, and at that only in 1964, thirty-six
years after it was executed by Marciana
Trinidad.  The most she conveyed to the
petitioners’ parents was inchoate ownership as she herself was not the
registered owner.  The property remained
in the names of Trinidad’s parents; no transfer
certificate of title had been issued in her favor.  Consequently, no certificate could also be
issued in the petitioners’ names. 
Moreover, the petitioners did not take possession of the land as they
could have on the strength of the Escritura de
Compraventa. 
Worse, they permitted the PTA and later the Republic to do so and made
no protest at all until 1981.

It is true that as the sole heir of her parents, Marciana Trinidad lawfully inherited the lot in question
upon their deaths, conformably to Article 777 of the Civil Code.  Hence, the affidavit of adjudication she
executed on February 19, 1947,
was only a formal affirmation of her ownership by right of succession.  Even so, it was still necessary for the
purpose of registering the property in the name of her vendees.  There is no doubt that without such affidavit
of adjudication, a transfer certificate of title could not have been issued in
favor of the petitioners, or of their parents before them.  Although the transferor-vendor named therein
was Marciana Trinidad, the registered owners of the
land were still Alejandro Trinidad and Aniceta Soriano per the original certificate of title.

The Escritura de Compraventa cannot itself be considered the
affidavit of adjudication for the fact is that it did not comply with the
requirements of Rule 74, Section 1, particularly the notice by
publication.  This compliance cannot be
presumed because the instrument was basically a deed of sale and such documents
are not required to be published.  By
contrast, such a presumption may apply to the affidavit of adjudication of February 19, 1947.  The record does not show that any evidence
has been adduced by the petitioners to negate the regularity of that
instrument.

At any rate, the failure of the petitioners to execute the
affidavit of adjudication is not really decisive of this case.  In the view of the Court, the most telling
consideration is that the petitioners’ parents did not immediately take
possession of the property upon the execution by Marciana
Trinidad of the Escritura de Compraventa in 1928. 
And neither did the petitioners themselves when their parents died.  The petitioners’ claim is that they were
ousted from the land only in 1979, but this is belied by the buildings and
other constructions already erected thereon at the time by the PTA and the
government.  Moreover, the petitioners
have not shown that they had paid the corresponding realty taxes on the land
during any of the years they were supposedly occupying the same.^[12]

On the other hand, it has been established that the PTA did
immediately enter the property when the deed of sale was concluded in
1947.  In fact, the land had long been in
the hands of the government when it finally occurred to the petitioners to
register the Escritura de Compraventa on December 1, 1964. 
Apart from the circumstance earlier stressed that the registration was
thirty-six years late, it was obviously made in bad faith because the
petitioners were at that time already aware that the respondent Republic of the
Philippines was in possession of the property.

Clearly applicable is Article 1544 of the Civil Code providing as
follows:

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.  (Emphasis supplied.)

Interpreting this provision in Arcenas
v. Del Rosario,^[13]
the Court said:

It is true that when real property is the subject matter of a
double sale, the purchaser who first registers it in the registry becomes the
owner thereof under the provision of Article 1473 of the Civil Code, but this
legal provision should not be understood in an absolute sense, nor does it
constitute a ground to sustain the demurrer, because the rights conferred by
said article upon one of the two purchasers of the same real property who has
registered his title in the registry of deeds, do not come into being if the
registration is not made in good faith.

The inscription of the Escritura
de Compraventa in 1964 produced no
legal effect because it was made in bad faith. 
Ownership should therefore vest in the respondent Republic of the Philippines
because it was first in possession of the property in good faith.

If any recourse is still available to the petitioners, it
definitely is not against the Republic of the Philippines.  Their claim for satisfaction – on which we do
not rule at this time – may be addressed only to Marciana
Trinidad who, for reasons still to be discovered, sold the same land once, and
then once again, to separate purchasers.

WHEREFORE, the petition is DENIED, with costs against the
petitioners.  It is so ordered.

Narvasa, (Chairman), Griño-Aquino, and Medialdea, JJ., concur.

Gancayco, J., on leave.

^[1] Decision of Judge Rosalio C. Segundo
affirmed by Justice Bienvenido C. Ejercito,
ponente, with Justices Oscar M. Herrera and Justo P. Torres, Jr., concurring.

^[2] Lot No. 5165.

^[3] Rollo, p. 11.

^[4] Ibid., pp. 11-12.

^[5] 26 SCRA 332.

^[6] 157 SCRA 140.

^[7] Rollo, p. 9.

^[8] Ibid., p. 14.

^[9] Article 1134, Civil Code; Tejido v.
Zamacuma, 138 SCRA 78, Corro
v. Lising, 137 SCRA 541; Sinson
v. Sorongon, 136 SCRA 407.

^[10] Cañete v. Benedicto, 158
SCRA 575.

^[11] 23 SCRA 29.

^[12] Rollo, p. 54.

^[13] 67 Phil. 238.