Inaction

Registered and titled owners of properties may still lose said properties due to lack of vigilance and diligence by failing or neglecting to do for an unreasonable and unexplained length of time that which they should have done earlier. This is known as the equitable principle of laches which is applied in this case of Alex and a realty company (IRC).

Alex was the registered owner of a parcel of land situated in the suburbs covered by TCT No. T-3967 while IRC owned the three other adjacent parcels of land covered by TCT Nos. T-1510, T-1517, and T-1518. The four titles were issued to them sometime in 1960 and 1961.

In 1970, another realty company (QRSI) was issued TCTs Nos. T-54185, 54186, 54187 and 54188 covering exactly the same areas and containing the same technical descriptions as those embraced in the Titles of Alex and IRC.

QRSI then mortgaged said properties in favor of Government Service Insurance System (GSIS) and had the said mortgage annotated at the back of its four titles on June 29, 1971.

In October 1973, Alex and IRC instituted four actions in Court against QRSI and the Register of Deeds for cancellation of QRSI’s four titles. The actions did not include GSIS despite the fact that the mortgage in its favor had already been annotated in QRSI’s titles. Alex and IRC also did not ask for the annotation of the notice of lis pendens on said titles.

QRSI filed its answer but did not appear at the pre-trial conference. So the court rendered a decision in favor of Alex on December 8, 1980 declaring his TCT No T-3967 to have been validly issued and thus ordering the cancellation of QRSI’s TCT No. 54188. On December 20, 1985, the court likewise rendered a joint decision in favor of IRC upholding the validity of its titles and ordering the cancellation of QRSI’s TCT Nos. T-54185, T-54186 and T-54187.

In the meantime, QRSI defaulted payment of its mortgage indebtedness to GSIS. So the mortgages were foreclosed and the properties were sold at public auction with GSIS emerging as the highest bidder. When QRSI failed to redeem the foreclosed properties within the one year redemption period, GSIS consolidated its ownership thereof. Thus TCTs Nos. T-230070, T-230071, T-230072 and T-230073 were issued in its name.

Thereupon, GSIS entered into a joint venture agreement with another realty company (NSJBI) for the development of the properties. NSJBI subsequently commenced construction and development works thereon.

It was only November 8, 1993 when Alex and IRC made its move. They demanded that GSIS and NSJBI vacate the subject properties. And when they latter refused, they filed with the Regional Trial Court (RTC) a Petition for Declaratory Relief to Quiet Title/Remove Cloud from Real Property against QRSI, GSIS, NSJBI and the Register of Deeds.

But on November 18, 1994, the RTC dismissed their complaints. This dismissal was upheld by the Court of Appeals (CA). Aside from finding that GSIS was an innocent purchaser for value, the CA also ruled that Alex and IRC were guilty of laches for their failure to execute the favorable decisions they obtained way back on December 8, 1980 and December 20, 1985. Alex and IRC however questioned this ruling, arguing that laches cannot be raised against them who are registered and titled owners of the property, more so if the titles acquired by GSIS were tainted with fraud. Were they correct?

No. In the first place, no evidence was presented to prove the alleged fraud on the part of GSIS and even QRSI in the issuance of the title. Secondly, 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, it is likewise an enshrined rule that even a registered owner may be barred from recovering possession of property by laches.

In this case, Alex and IRC failed to move for the execution of the favorable ex parte judgments they obtained on December 8, 1980 and December 20, 1985. Their neglect in asserting their right is further manifested in their failure to include GSIS in the four complaints for cancellation of titles they filed in October 1973 despite the fact that the mortgages in GSIS’s favor had been annotated on the subject titles since June 29, 1971. More evident is the fact that they failed to have the notice of lis pendens annotated on the subject titles when they filed the four complaints, leading GSIS to believe that there were no other certificates of title to the same properties when it proceeded to foreclose them in 1986. The CA is thus correct in finding Alex and IRC guilty of laches. So their complaints should rightfully be dismissed. (Ty vs. Queens Row Subdivision Inc. G.R. 173158, December 4, 2009, 607 SCRA, 324)

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