Heirs of Teodoro Dela Cruz vs. Court of Appeals

Laches bars registered owners from recovering land after nearly thirty years of inaction while another openly possesses, encloses, and improves it, Torrens registration being merely confirmatory and not a mode of acquiring ownership.

Petitioners are the heirs of Teodoro Dela Cruz, represented by Edronel Dela Cruz. Private respondents are Filomeno and Gregorio Madrid, alleged original owners-vendors, and Pacifico Marquez, who claims to have bought the property from the Madrids in 1976. The dispute concerns a parcel in Poblacion, San Mateo, Isabela with an area of 3,277 square meters, later identified as Lots 7036-A-10-A, 7036-A-10-B and 7036-A-10-C.

According to petitioners, their predecessor-in-interest bought the land from the Madrid brothers for P4,000.00 under a deed of sale executed on May 18, 1959, and since then they have been in actual, physical, continuous and open possession. They enclosed the land and introduced extensive improvements, including a rice mill, storage house, garage, pavements and other buildings. Sometime in October 1986, the Madrids obtained Torrens title over the land, with TCT No. 167250 issued to them and TCT Nos. 167220 and 167256 to Marquez, prompting petitioners to file reconveyance on November 20, 1986.

The Madrids denied execution of the deed of sale and, assuming such document exists, alleged it to be fictitious and falsified. While admitting petitioners' possession, they asserted it persisted in defiance of repeated demands to relinquish the land, explaining inaction by unexplained killings in the area, but presenting no evidence linking petitioners thereto and no written demand to vacate. Marquez, for his part, claimed to be an innocent purchaser for value, although he admitted knowing the land and, in his Answer, awareness that petitioners had been in possession since 1959.

At trial petitioners could not present the original deed of sale as it was lost, offering instead as Exhibit A a photocopy of the purported original carbon copy. The notary public, Atty. Sevillano Tabangay, testified the deed had about five copies and acknowledged his signature on the copy shown when loss of the originals was made known, but the copy was unsigned by the parties, undated as to execution, and retyped from a carbon original presented by Teodoro Dela Cruz without checking his own files. The surviving attesting witness, Constantino Balmoja, was not presented, and no certification from the National Archives or notarial records was produced to account for the other copies. The trial court excluded Exhibit A for failure to account for all duplicates, while the Court of Appeals deemed it admitted for lack of objection yet devoid of probative value to prove the 1959 sale.

• Admissibility of Exhibit A: Petitioner argued that the trial court erred in holding Exhibit A inadmissible to prove the transaction.
• Existence of Valid Sale: Petitioner maintained that even as a mere photocopy of the original carbon copy, other substantial evidence proved the sale, particularly the testimony of notary public Atty. Tabangay acknowledging due execution.
• Possession as Presumption of Ownership: Petitioner argued that long possession since 1959, bolstered by construction of various improvements, gave rise to the disputable presumption of ownership.
• Right to Improvements: Petitioner contended that the trial court erred in holding they were not entitled to the improvements introduced on the land.

• Denial and Falsity of Sale: Respondent Madrids denied having executed the deed of sale and argued that, assuming it exists, it is fictitious and falsified.
• Possession Against Demands: Respondent Madrids admitted petitioners' possession but countered that it was in defiance of repeated demands to relinquish the land, with inaction allegedly due to unexplained killings in the area.
• Innocent Purchaser for Value: Respondent Marquez contended that he is an innocent purchaser for value having bought the property from the Madrid brothers in 1976.
• Imprescriptibility of Torrens Title: Respondents argued that neither prescription nor laches can operate against them because their title is registered under the Torrens system and therefore imprescriptible.

• Secondary Evidence: Whether Exhibit A, a photocopy of the purported carbon copy of the 1959 deed of sale, was admissible and had probative value to prove the conveyance.
• Ownership by Laches Despite Torrens Title: Whether petitioners' long, open possession and improvement since 1959 bars respondents, who obtained Torrens titles only in October 1986, from recovering the land on laches notwithstanding imprescriptibility of registered title.
• Good Faith Purchase: Whether Marquez may be deemed an innocent purchaser for value despite awareness of petitioners' possession since 1959.

• Secondary Evidence: Yes in admissibility, No in probative value. Failure to object rendered Exhibit A admitted as primary evidence, but its reliability still had to meet tests of probative value which it failed.
• Ownership by Laches Despite Torrens Title: Yes. Long inaction for almost thirty years converted respondents' claim into a stale demand, Torrens registration not vesting ownership where petitioners possessed since 1959 and titles issued only in 1986.
• Good Faith Purchase: No. Awareness of another's possession since 1959 and purchase without checking the vendor's title precludes the protection afforded an innocent purchaser for value.

• Secondary Evidence: Before secondary evidence may be presented, all duplicates and counterparts must be accounted for, with no excuse for non-production established until all parts are unavailable. Petitioners failed to account for the five copies testified to by Atty. Tabangay, presented none of them, and offered no certification of loss from the National Archives or proof of unavailability of the notarial copies. Notwithstanding the lapse, private respondents' failure not only to object but even to cross-examine the notary on execution operated as waiver, making Exhibit A primary evidence upon presentation. Admissibility, however, was not to be confused with probative value. Exhibit A was merely a photocopy lifted from a carbon copy, unsigned, undated, lacking reproduction of the Madrids' signatures for comparison, retyped by Atty. Tabangay from a copy presented by Teodoro Dela Cruz without verifying his own files, and uncorroborated by surviving witness Constantino Balmoja, rendering it unreliable to prove the 1959 sale.
• Ownership by Laches Despite Torrens Title: Petitioners possessed the disputed land since 1959, enclosed it to signify exclusive ownership, and introduced conspicuous infrastructure that could not have escaped notice, without any protest, written demand, or restraining act from the Madrids for almost thirty years. The excuse of unexplained killings was pure speculation, unsupported by evidence linking petitioners thereto. Securing TCT No. 167250 and TCT Nos. 167220 and 167256 in October 1986, twenty-seven years after possession began, did not vest ownership, Torrens registration never having been recognized as a mode of acquiring ownership and certificates of title not establishing ownership. Even if prescription does not lie against recorded title, the equitable defense of laches applies where long inaction and neglect make allowance of recovery inequitable and unjust, following Miguel vs. Catalino and Pabalete vs. Echarri.
• Good Faith Purchase: Marquez admitted knowledge of the land and awareness in his Answer that petitioners had possessed it since 1959. Where a purchaser was fully aware of another's possession, innocent purchase for value cannot successfully be pretended. One who buys without checking the vendor's title assumes all consequent risks and losses, and lacking the diligence of a prudent man after being put on notice, is denied the benefit afforded an innocent purchaser for value.

• Secondary evidence; accounting for all originals — Before secondary evidence can be presented, all duplicates and/or counterparts must be accounted for, and no excuse for non-production of the original can be regarded as established until all its parts are unavailable. Applied to reject petitioners' explanation of loss where five copies existed but none was produced or certified unavailable.
• Waiver of best evidence objection; admissibility vs. probative value — Failure to object to secondary evidence when formally offered operates as waiver, rendering it primary evidence, but admissibility is distinct from probative value whose tendency to convince and persuade must still be tested. Applied to treat Exhibit A as admitted yet devoid of weight because it was unsigned, undated, unverified against notarial files, and uncorroborated.
• Torrens title not a mode of acquiring ownership — The Torrens system does not create or vest title and certificates of title do not establish ownership. Applied to deny that TCTs obtained in 1986, twenty-seven years after adverse open possession began, vested ownership in respondents.
• Laches against registered owner — Even where prescription or adverse possession does not lie against a registered owner, the equitable defense of laches bars recovery where plaintiff's long inaction or inexcusable neglect for decades, while defendant possesses, cultivates, pays taxes and improves, has converted the claim into a stale demand. Applied to bar respondents after almost thirty years of silence despite enclosure and substantial construction, as in Miguel vs. Catalino and Pabalete vs. Echarri.
• Innocent purchaser for value with notice of possession — A purchaser fully aware of another person's possession, who buys without checking the vendor's title and without exercising the diligence of a prudent man, cannot claim protection as an innocent purchaser for value. Applied to Marquez who knew of petitioners' possession since 1959.

• "The Torrens system does not create or vest title. It has never been recognized as a mode of acquiring ownership," — States the controlling limitation on Torrens registration, grounding the rejection of respondents' claim that 1986 titles vested ownership.
• "Courts can not look with favor at parties who, by their silence, delay and inaction, knowingly induce another to spend time, effort and expense in cultivating the land, paying taxes and making improvements thereon for 30 long years, only to spring from ambush and claim title when the possessor's efforts and the rise of land values offer an opportunity to make easy profit at his expense. . . . ." — Quoted from Miguel v. Catalino to articulate the equitable basis for applying laches against long-inactive title claimants.
• "This defense is an equitable one and does not concern itself with the character of the defendant's title, but only with whether or not by reason of the plaintiff's long inaction or inexcusable neglect he should be barred from asserting this claim at all, because to allow him to do so would be inequitable and unjust to the defendant. . . ." — Quoted from Pabalete v. Echarri to define laches as barring stale demands irrespective of defendant's title character.
• "Where a purchaser was fully aware of another person's possession of the lot he purchased, he cannot successfully pretend later to be an innocent purchaser for value." — States the rule defeating Marquez's good-faith claim given admitted knowledge of possession since 1959.

• Miguel vs. Catalino, 26 SCRA 236 (1968) — Followed as authority that more than 34 years of vendor-successor passivity justifies laches even assuming prescription does not lie against recorded title.
• Pabalete vs. Echarri, 37 SCRA 518 (1971) — Followed for holding that 37 years of inaction converts the registered owner's right to recover into a stale demand under laches, without defendant acquiring title by adverse possession.
• Ong Ching Po vs. Court of Appeals, 239 SCRA 341 (1994) — Cited for the requirement that all originals must be accounted for before secondary evidence can be presented.
• De Vera vs. Aguilar, 218 SCRA 602 (1993) — Cited for the principle that no excuse for non-production is established until all parts of the original are unavailable.
• Santiago vs. Court of Appeals, 278 SCRA 98 (1997) — Cited for the rule that the Torrens system does not create or vest title.
• Esquivas vs. Court of Appeals, 272 SCRA 803 (1997); Berico vs. Court of Appeals, 225 SCRA 469 (1993); Solid State Multi-Products Corp. vs. Court of Appeals, 196 SCRA 630 (1991); De Guzman vs. Court of Appeals, 156 SCRA 701 (1987) — Cited collectively that certificates of title do not establish ownership.
• Lola vs. Court of Appeals, 145 SCRA 439 (1986) — Cited for application of laches precluding recovery after long inaction.
• Uy vs. Court of Appeals, 246 SCRA 703 (1995) — Cited that awareness of another's possession defeats a claim of innocent purchase for value.
• Sajonas vs. Court of Appeals, 258 SCRA 79 (1996) — Cited that one who buys without checking the vendor's title takes all consequent risks and losses.
• Crisostomo vs. Court of Appeals, 197 SCRA 833 (1991) — Cited that without diligence of a prudent man, the law withholds the benefit of an innocent purchaser for value.

Narvasa, C.J., Kapunan, Purisima and Pardo, JJ., concur.