Domingo v Roces
Facts:
The spouses Cesar and Lilia Roces were the
owners of two contiguous parcels of land
located on Arayat Street, Mandaluyong,
covered by Transfer Certificates of Title Nos.
57217 and 57218.[3] On November 13, 1962,
the Government Service Insurance System
(GSIS) caused the annotation of an affidavit of
adverse claim on the titles alleging that the
spouses have mortgaged the same to it.[4]
Subsequently, GSIS wrote a letter to Cesar
Roces demanding the surrender of the owners
duplicates of titles. When Roces failed to
comply, GSIS filed a petition with the then
Court of First Instance of Rizal, docketed as
Civil Case No. R-1359, praying that the owners
duplicates in Roces possession be declared null
and void and that the Register of Deeds of
Pasig be directed to issue new owners
duplicates to GSIS.[5] On September 5, 1977,
the Court of First Instance issued an order
granting the petition.[6] The order became
final and executory, and TCT Nos. 57217
(11663) and 57218 (11664) were issued in the
name of GSIS.[7]
Cesar Roces died intestate on January 26,
1980.[8] He was survived by his widow, Lilia
Roces, and their children: Cesar Roberto Roces,
Ana Ines Magdalena Roces Tolentino, Luis
Miguel M. Roces, Jose Antonio Roces and Maria
Vida Presentacion Roces, all of whom are the
respondents in this case.
On July 22, 1992, Reynaldo L. Montinola, a
nephew of Lilia Roces, executed an affidavit of
self-adjudication over the Arayat properties. He
alleged that the properties were owned by the
spouses Cesar and Lilia Roces, both of whom
died intestate, on September 13, 1987 and
June 27, 1989, respectively; that the properties
were acquired during the existence of their
marriage; that the spouses left no heirs except
the brother of Lilia Roces, who was his father;
that neither of the spouses left any will nor any
debts; and that he was the sole heir of the
Roces spouses.[9]
On January 5, 1993, Montinola filed a petition
against GSIS with the Regional Trial Court of
Pasig, docketed as Civil Case No. R-4743,
praying for the cancellation of TCT Nos. 57217
(11663) and 57218 (11664).[10] During the
trial, GSIS failed to produce any document
evidencing the alleged real estate mortgage by
Roces of the properties. Hence, the trial court
rendered judgment in favor of Montinola,
declaring the owners duplicates of TCT No.
57217 (11663) and 57218 (11664) as null and
void and ordering the Registry of Deeds of
Mandaluyong to issue new owners duplicates
of the said titles.[11]
GSIS did not appeal the aforesaid judgment;
thus, the same became final and executory.
Accordingly, the Registry of Deeds of
Mandaluyong issued TCT No. 7299 in the name
of Montinola in lieu of TCT No. 57218 (11664).
[12]
Sometime in July 1993, Montinola executed a
deed of absolute sale of the property covered
by TCT No. 7299 in favor of petitioner spouses
Eduardo and Josefina Domingo.
When respondents learned of the sale of the
property to petitioners, they filed a complaint
against Montinola and petitioners with the
Regional Trial Court of Pasig. They argued that
the affidavit of self-adjudication was fraudulent
because Montinola was not an heir of the Roces
spouses and it was not true that Lilia Roces
was dead. Therefore, the affidavit of selfadjudication, as well as the deed of absolute
sale, TCnt:1'> Moral damages in the sum of
P100,000.00;
The counterclaim of defendant spouses
Eduardo and Josefina Domingo is dismissed
and the complaint against the Register of
Deeds is likewise dismissed without costs.
Ruling:
The petition lacks merit.
It is true that one who deals with property
registered under the Torrens system need not
go beyond the same, but only has to rely on
the title. He is charged with notice only of such
burdens and claims as are annotated on the
title. However, this principle does not apply
when the party has actual knowledge of facts
and circumstances that would impel a
reasonably cautious man to make such inquiry
or when the purchaser has knowledge of a
defect or the lack of title in his vendor or of
sufficient facts to induce a reasonably prudent
man to inquire into the status of the title of the
property in litigation. One who falls within the
exception can neither be denominated an
innocent purchaser for value nor a purchaser in
good faith.[23]
As stated above, the titles, namely, TCT Nos.
7299 and 7673, contained annotations which
made reference to the provisions of Rule 74,
Section 4 of the Rules of Court, viz:
SEC. 4. Liability of distributees and estate. If it
shall appear at any time within two (2) years
after the settlement and distribution of an
estate in accordance with the provisions of
either of the first two sections of this rule, that
an heir or other person has been unduly
deprived of his lawful participation in the
estate, such heir or such other person may
compel the settlement of the estate in the
courts in the manner hereinafter provided for
the purpose of satisfying such lawful
participation. And if within the same time of
two (2) years, it shall appear that there are
debts outstanding against the estate which
have not been paid, or that an heir or other
person has been unduly deprived of his lawful
participation payable in money, the court
having jurisdiction of the estate may, by order
for that purpose, after hearing, settle the
amount of such debts or lawful participation
and order how much and in what manner each
distributee shall contribute in the payment
thereof, and may issue execution, if
circumstances require, against the bond
provided in the preceding section or against
the real estate belonging to the deceased, or
both. Such bond and such real estate shall
remain charged with a liability to creditors,
heirs, or other persons for the full period of two
(2) years after such distribution,
notwithstanding any transfers of real estate
that may have been made.[24]
The foregoing rule clearly covers transfers of
real property to any person, as long as the
deprived heir or creditor vindicates his rights
within two years from the date of the
settlement and distribution of estate. Contrary
to petitioners contention, the effects of this
provision are not limited to the heirs or original
distributees of the estate properties, but shall
affect any transferee of the properties.
In David v. Malay,[25] it was held that the
buyer of real property the title of which contain
an annotation pursuant to Rule 74, Section 4 of
the Rules of Court cannot be considered
innocent purchasers for value. In the same
vein, the annotation at the back of TCT No.
7299 in this case referring to Rule 74, Section 4
of the Rules of Court was sufficient notice to
petitioners of the limitation on Montinolas right
to dispose of the property. The presence of an
irregularity which excites or arouses suspicion
should prompt the vendee to look beyond the
certificate and investigate the title of the
vendor appearing on the face thereof.[26]
Purchasers of registered land are bound by the
annotations found at the back of the certificate
of title.[27]
Hence, petitioners cannot be considered
buyers in good faith and cannot now avoid the
consequences brought about by the application
of Rule 74, Section 4 of the Rules of Court.
Petitioners claim that respondents were guilty
of laches and estoppel is likewise untenable.
Laches is 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. The
essential elements of laches are: (1) conduct
on the part of defendant or one under whom he
claims, giving rise to the situation complained
of; (2) delay in asserting complainants right
after he had knowledge of the defendants
conduct and after he has an opportunity to sue;
(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.[28]
On the other hand, estoppel by laches arises
from the 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.
[29]
In the case at bar, only four months elapsed
from the time respondents discovered
Montinolas fraudulent acts, sometime in May
1993, to the time they filed their complaint on
September 6, 1993. This relatively short span
of time can hardly be called unreasonable,
especially considering that respondents used
this period of time to investigate the transfers
of the property.[30] Delay is an indispensable
requisite for a finding of estoppel by laches,
but to be barred from bringing suit on grounds
of estoppel and laches, the delay must be
lengthy and unreasonable.[31] No
unreasonable delay can be attributed to
respondents in this case.
