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Republic of the Philippines SECOND DIVISION G.R. No. 129977 - February 1, 2001 JOSELITO VILLEGAS and DOMINGA VILLEGAS, Petitioners, v. COURT OF APPEALS and FORTUNE TOBACCO CORPORATION, Respondents. QUISUMBING, J.: This petition assails the decision dated November 15, 19961 of the Court of Appeals and its resolution promulgated on July 29, 1997,2 affirming the decision dated July 30, 19933 of the Regional Trial Court, Cauayan, Isabela, Branch 19. The facts of the case, as found by the trial court and the Court of Appeals, are as follows: Before September 6, 1973, Lot B-3-A, with an area of four (4) hectares situated at Dapdap, now San Fermin, Cauayan, Isabela was registered under TCT No. 68641 in the names of Ciriaco D. Andres and Henson Caigas. This land was also declared for real estate taxation under Tax Declaration No. C2-4442. On September 6, 1973, Andres and Caigas, with the consent of their respective spouses, Anita Barrientos and Consolacion Tobias, sold the land to Fortune Tobacco Corporation (Fortune) for P60,000.00. Simultaneously, they executed a joint affidavit declaring that they had no tenants on said lot. An affidavit to the effect was a prerequisite for the registration of the sale under the LRC Circular No. 232. On the same date, the sale was registered in the Office of the Register of Deeds of Isabela. TCT No. 68641 was cancelled and TCT No. T-68737 was issued in Fortune's name. On August 6, 1976, Andres and Caigas executed a Deed of Reconveyance of the same lot in favor of Filomena Domingo, the mother of Joselito Villegas, defendant in the case before the trial court. Although no title was mentioned in this deed, Domingo succeeded in registering this document in the Office of the Register of Deeds on August 6, 1976, causing the latter to issue TCT No. T-91864 in her name. It appears in this title that the same was a transfer from TCT No. T-68641. On April 13, 1981, Domingo declared the lot for real estate taxation under Tax Declaration No. 10-5633. On December 4, 1976, the Office of the Register of Deeds of Isabela was burned together with all titles in the office. On December 17, 1976, the original of TCT No. T-91864 was administratively reconstituted by the Register of Deeds. On June 2, 1979, a Deed of Absolute Sale of a portion of 20,000 square meters of Lot B-3-A was executed by Filomena Domingo in favor of Villegas for a consideration of P1,000.00. This document was registered on June 3, 1981 and as a result TCT No. T-131807 was issued by the Register of Deeds to Villegas. On the same date, the technical description of Lot B-3-A-2 was registered and TCT No. T-131808 was issued in the name of Domingo. On January 22, 1991, this document was registered and TCT No. 154962 was issued to the defendant, Joselito Villegas.4 On April 10, 1991, the trial court upon a petition filed by Fortune ordered the reconstitution of the original of TCT No. T-68737. In the pre-trial, the parties admitted that Lot B-3-A covered by the plaintiff's TCT No. T-68737 is identical to Lot B-3-A described in TCT No. T-91864 and Villegas' titles were mere transfers from TCT No. T-91864.5 After Trial on the merits, the trial court rendered its assailed decision in favor of Fortune Tobacco, declaring it to be entitled to the property. Petitioners thus appealed this decision to the Court of Appeals, which affirmed the trial court's decision, with a modification on the award of damages and attorney's fees, disposing:
Petitioners are now before us, asserting that the Court of Appeals committed the following errors:
In the main, we are to resolve (a) Who among the parties is entitled to the property, based on the validity of their respective titles? and (b) Has laches set in against private respondent Fortune Tobacco Corporation? It is petitioners' contention that Fortune was a buyer in bad faith. They allege that Fortune should have investigated if the property had any occupants. If it had done so, it would have found petitioners and their predecessors-in-interest in possession thereof. Petitioners also allege that Andres and Caigas were not the owners of the property at the time it was sold to Fortune. Throughout their pleadings before this Court, petitioners claim that Fortune's title is "fake and spurious," having proceeded from its "so-called reconstitution." Lastly, petitioners invoke the doctrine of laches against Fortune's bid to recover the property. Invoking the prior title rule, Fortune declares that it is the lawful owner of the property, as the certificate of title in its name was issued before issuance of another title to petitioners' predecessor-in-interest, Filomena Domingo. Fortune claims that petitioners' title is spurious. It also alleges that petitioners admitted the validity of Fortune's title, and that petitioners' continuous possession of the property cannot defeat said title. Fortune also asserts that it bought the property in good faith. It must be noted at the outset that Fortune's claim over the subject property is predicated upon the alleged prior issuance of its title in 1973, which was lost in a fire and reconstituted only in 1991. Hence, the soundness of Fortune's claims is hinged upon the validity of its reconstituted title. It is thus imperative for us to look into whether or not Fortune's title was properly reconstituted. This question was not raised as an issue by petitioners, and neither was the grant of Fortune's reconstituted title assigned as an error in the petition. We have held however, that the Court is clothed with ample authority to review matters, even if they are not assigned as errors in the appeal, if it finds that their consideration is necessary in arriving at a just decision of the case.8 In the case at bar, Fortune's title was judicially reconstituted by virtue of an order dated April 10, 1991, issued by the Regional Trial Court, Branch 19 of Cauayan, Isabela, also the court a quo. It disposed:
Section 110 of Presidential Decree No. 152910 provides:
In turn, Sections 3, 10 and 9 of Republic Act No. 2611 provide -
Juxtaposing the facts as disposed by Branch 19 vis-à-vis Sec. 110 on P.D. 1529 and Sections 3, 9 and 10 of R.A. 26, it is evident that the requirements for judicial reconstitution of certificates of title were not fully complied with. Although the order of reconstitution reveals that there was publication of the notice of the petition for reconstitution in the Official Gazette as required by law, there was, however, no mention of compliance with the requirement of posting of the notice of the petition in the provincial or municipal building of the city or municipality where the subject property is located. While proof of publication of the notice of the petition was submitted by Fortune, there was no proof of posting of the notice, presumably because no such posting was accomplished. The lack of compliance with these requirements for the judicial reconstitution of certificates of title deprived the court of jurisdiction over the petition. The jurisdiction of the Regional Trial Court to hear and decide a petition for reconstitution of title is conferred by R.A. 26. The Act prescribes a special procedure that must be followed in order that the court may act on the petition and grant the remedy sought. The specific requirements and procedure are as laid down in Sections 9 and 10 of R.A. 26.12 The proceedings therein being in rem, the court acquires jurisdiction to hear and decide the petition for the reconstitution of the owner's title upon compliance with the required posting of notices and publication in the Official Gazette.13 These requirements and procedure are mandatory and must strictly be complied with, otherwise, the proceedings are utterly void, which is why the petitioner is required to submit proof of the publication and posting of the notice.14 Non-compliance with the jurisdictional requirement of posting of the notice renders the order of reconstitution null and void. Consequently, the reconstituted title of Fortune is likewise void. Fortune cannot now invoke the prior title rule, as it in effect has no valid title to speak of. But even if Fortune had validly acquired the subject property, it would still be barred from asserting title because of laches. The failure or neglect, for an unreasonable length of time to do that which by exercising due diligence could or should have been done earlier constitutes laches. It is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it has either abandoned it or declined to assert it.15 While it is by express provision of law that no title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession,16 it is likewise an enshrined rule that even a registered owner may be barred from recovering possession of property by virtue of laches.17 The elements of laches are: (1) conduct on the part of the defendant, or one under whom he claims, giving rise to the situation that led to the complaint and for which the complaint seeks a remedy; (2) delay in asserting the complainant's rights, having had knowledge or notice of the defendant's conduct and having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and (4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held barred.18 In the case at bar, there is no question on the presence of the first element. The object of Fortune's complaint before the trial court was to recover possession of the property in question, which is presently in the hands of petitioners. The second element of delay is also present in this case. Fortune's suit for recovery of possession and damages was instituted only on May 29, 1991, fifteen years after the registration of Filomena Domingo's title to the property in 1976. Domingo's registration was constructive notice to the whole world, including Fortune of the existence of such adverse title. In applying the doctrine of laches, we have ruled that where a party allows the following number of years to lapse from the emergence of his cause of 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.19 The third element of laches also present in this case. There is nothing in the record which shows that petitioners had any inkling of Fortune's intent to possess the subject property. While Fortune claims that it protested and demanded over several years that petitioners vacate the land and surrender its possession, there is nothing on record to support such contention; they remain self-serving, unsubstantiated claims. Petitioners controverted this assertion, stating that they only received such notice during the confrontation before the barangay captain of San Fermin, Cauayan, Isabela on May 12, 1991, which was a condition precedent to the filing of Fortune's complaint before the trial court. This is the only prior notice to petitioners which is supported by the records.20 As to the fourth element of laches, it goes without saying that petitioners will be prejudiced if Fortune's complaint is accorded relief, or not held barred, as then petitioners would be deprived of the property on which their households stand. Needless to say, laches has set in against Fortune, precluding its right to recover the property in question. WHEREFORE, the petition is GRANTED and the Decision of the Court of Appeals promulgated on November 15, 1996 and its Resolution dated July 29, 1997, are REVERSED. The complaint of private respondent Fortune Tobacco Corporation is hereby DISMISSED. Costs against private respondent. SO ORDERED. Bellosillo, Mendoza, Buena, and De Leon, Jr., JJ., concur. Endnotes:
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