Lorenzo vs. Eustaquio

Although a Torrens-registered land cannot be acquired by prescription or adverse possession, ownership thereof may be lost through laches where the claimant and predecessors slept on their rights for an unreasonable and unexplained length of time, thereby converting their claim into a stale demand. A donation propter nuptias not made in a public instrument is void under the Old Civil Code, but a private document of donation may serve as a legal basis of adverse possession where there is clear and convincing evidence of possession.

Lot No. 2161, covered by OCT No. 27351, was owned by spouses Gregorio Eustaquio and Regina Lorenzo. Their son Delfin married Fortunata; petitioners are descendants of Gregorio and Regina's daughters Trinidad and Fausta. The dispute concerns competing claims over the land: respondents trace their claim to a 1942 donation propter nuptias, while petitioners trace theirs to inheritance and a 1993 Deed of Succession and Adjudication. The Old Civil Code governs the donation, and the land is registered under the Torrens system.

Lot No. 2161, a 7,275-square-meter parcel in Barangay Bacabac, Camiling, Tarlac, was owned by spouses Gregorio Eustaquio and Regina Lorenzo and covered by Original Certificate of Title (OCT) No. 27351. They had three children: Delfin, Trinidad, and Fausta. On June 2, 1942, Gregorio and Regina executed a deed of donation propter nuptias (Inventario Matrimonio) in favor of Delfin and Fortunata in celebration of their marriage, donating a carabao and three parcels of land, including Lot No. 2161. Delfin and Fortunata issued a receipt to Gregorio accepting the donation and immediately occupied and possessed the land in the concept of an owner.

Delfin died on July 4, 1994. Before his death, on December 31, 1993, petitioners—Ernesto Lorenzo, Manuel Lorenzo, Conchita Lorenzo-Bruno, and the heirs of Rodolfo Lorenzo (children of Trinidad), and Adoracion and Avelina Suelen (children of Fausta)—presented a Deed of Succession and Adjudication. The deed stated that Lot No. 2161 was subdivided into Lot Nos. 2161-A, 2161-B, and 2162-C under Psd-036903-053138, which bore the signature "G Eustaquio" referring to Gregorio, and adjudicated the lots among the heirs: Lot No. 2161-A to Delfin; Lot No. 2161-B to Ernesto, Manuel, Rodolfo, and Conchita, all surnamed E. Lorenzo, in equal shares; and Lot No. 2161-C to Fausta. Petitioners, represented by Ernesto, then filed a petition for issuance of a second owner's duplicate copy of OCT No. 27351, claiming that Ernesto was an heir in possession of the duplicate copy which he lost. The trial court granted the petition and issued a duplicate copy to petitioners.

Respondents—Fortunata D. Eustaquio and her children Angelito, Jose, Alegria, Leonida, Teofilo, Delfin, Jr., and Alejandro, all surnamed Eustaquio (heirs of Delfin Eustaquio, Sr.)—filed a complaint for quieting of title, declaration of nullity of documents, surrender of title, and damages, later amended. They claimed ownership by virtue of the donation and alleged that the Deed of Succession and Adjudication was null and void because it was based on Psd-036903-053138 signed by Gregorio as "G. Eustaquio," a forgery since Gregorio had died on October 29, 1950, making it impossible for him to execute the document. They further alleged that Delfin's thumbmark on the deed was spurious because he never appeared before the notary public, and that if petitioners had no intent to defraud respondents, they would have given respondents a copy of the deed before Gregorio's demise.

Petitioners claimed that the donation propter nuptias was void for lack of valid acceptance, and that it was spurious and fake because the signatures were forgeries. They also claimed that because Gregorio and Regina donated all their properties to Delfin and Fortunata, the donation violated the rights of the other heirs to their legitimes. As to the Deed of Succession and Adjudication, petitioners maintained that it was valid because it was duly executed in a public document and notarized; that Fortunata was with Delfin when he signed it; and that Fortunata did not object, which supported the validity of the donation. In reply, respondents countered that the donation remained valid even without acceptance because Delfin was only 17 years old at the time of his marriage to Fortunata; that petitioners contested the donation only in 1993, more than 50 years after its execution, so their claim was barred by prescription; and that Delfin's thumbmark on the Deed of Succession and Adjudication was fake because he never appeared before a notary public.

The RTC found the donation void for lack of notarization under Article 633 of the Old Civil Code, which required a gift of real property to appear in a public instrument. It nevertheless held that respondents had acquired ownership by acquisitive prescription, finding that Delfin and Fortunata and their children had been in actual, open, continuous, and adverse possession of the land in the concept of an owner since 1942, for more than 50 years, and that laches had set in because petitioners failed to assail the donation or assert their successional rights. The RTC also found that Delfin's signature on the Deed of Succession and Adjudication did not mean he agreed to the partition, as the deed was executed six months before his death and he was most likely not of sound mind to accede to its terms. The CA affirmed, finding that Delfin and Fortunata built their house on the lot in 1943, that their children later built houses and lived there from 1962 until 1994 without objection from petitioners and their parents Trinidad and Fausta, and that respondents had been in open, continuous, adverse, and uninterrupted possession for more than 50 years, performing acts of dominion in the concept of an owner.

• Subject Index: Petitioners claimed that the absence of a subject index in their appellants' brief was not a fatal defect because their arguments and bases were clearly and logically presented in the brief, with citations of jurisprudence and records.
• Prescription and Laches: Petitioners asserted that the appellate and trial courts erred in declaring respondents owners by acquisitive prescription or laches because neither can be applied against property covered by Torrens title.
• Validity of Deed of Succession and Adjudication: Petitioners maintained that the Deed of Succession and Adjudication is valid as it complied with all requisites under Article 1318 of the Civil Code.
• Immateriality of Construction: Petitioners averred that Delfin and Fortunata and their children's acts of constructing a house on the land are immaterial since acquisitive prescription is inapplicable to warrant ownership.
• Delfin's Mental State and Notarization: Petitioners argued there was lack of justification that Delfin was of unsound mind when he affixed his thumbmark on the Deed, and that Delfin personally appeared before the notary public.
• Estate and Damages: Assuming the Deed and donation are invalid, and since Gregorio and Regina left no will, petitioners asserted the land should form part of their estate; they also averred the trial court erred in declaring the second owner's copy of OCT No. 27351 null and in awarding moral damages and attorney's fees.

• Ownership by Donation: Respondents claimed ownership over the subject land by virtue of the donation propter nuptias.
• Nullity of Deed of Succession and Adjudication: Respondents alleged the Deed of Succession and Adjudication was null and void because it was based on Psd-036903-053138 signed by Gregorio with "G. Eustaquio," a forgery since Gregorio had died on October 29, 1950, and because Delfin's thumbmark was spurious as he never appeared before the notary public.
• Validity of Donation Despite Lack of Acceptance: Respondents countered that the donation remained valid even if there was no acceptance since Delfin was only 17 years old at the time of his marriage to Fortunata.
• Prescription: Respondents argued that petitioners contested the donation only in 1993, more than 50 years after its execution, so their claim over the subject land or a portion thereof had already been barred by prescription.
• Forged Thumbmark: Respondents reiterated that Delfin's thumbmark on the Deed of Succession and Adjudication was fake as he never appeared before a notary public.

• Subject Index: Whether the lack of a subject index in petitioners' appellants' brief warrants the dismissal of their appeal.
• Ownership of the Subject Land: Whether the spouses Delfin and Fortunata are the rightful owners of the subject land.
• Validity of the Deed of Succession and Adjudication: Whether the Deed of Succession and Adjudication is valid.
• Damages: Whether respondents are entitled to the award of damages.

• Subject Index: Yes. Section 13(a), Rule 44 requires an appellant's brief to contain a subject index with a digest of arguments and page references, and its absence warrants dismissal under Section 1(f), Rule 50; the CA correctly found the appeal should have been dismissed.
• Ownership of the Subject Land: Yes, but not by acquisitive prescription. Although registered land cannot be acquired by prescription or adverse possession, respondents acquired ownership through laches because petitioners and their predecessors failed to assert their claim for 50 years, converting it into a stale demand.
• Validity of the Deed of Succession and Adjudication: No. The Deed of Succession and Adjudication is null and void because respondents had already acquired ownership by laches when it was executed, so the land no longer formed part of the estate of Gregorio and Regina.
• Damages: Yes. Moral damages and attorney's fees were proper because respondents suffered physical suffering and mental anguish from petitioners' occupation and were forced to litigate to protect their interest.

• Subject Index: Section 13(a), Rule 44 of the Rules of Court states that an appellant's brief shall contain a subject index with a digest of the arguments and page references, and a table of cases alphabetically arranged, textbooks and statutes cited with references to the pages they are cited. The absence thereof warrants dismissal, either motu proprio or upon motion of an appellee, under Section 1(f), Rule 50. The Court cited Estate of Vda. de Villegas vs. Gaboya, Del Rosario vs. Court of Appeals, and Bucad vs. Court of Appeals, where appeals were dismissed for violation of Section 1, Rule 50. Because petitioners' appellants' brief lacked the required subject index, the CA correctly found that the appeal should have been dismissed. The right to appeal is a statutory right, and a party who seeks to avail of it must faithfully comply with procedural rules designed to facilitate the orderly disposition of appealed cases. Notwithstanding petitioners' non-observance, the CA still ruled on the substantial merits and found no reversible error on the RTC judgment; thus, the denial of the appeal was not solely based on the procedural defect but also on lack of substantial merit.

• Ownership of the Subject Land: The Court agreed with the CA and RTC that Delfin and Fortunata are the rightful owners, but not by acquisitive prescription; ownership was acquired by laches. Under Article 1328 of the Old Civil Code, a donation propter nuptias must be made in a public instrument in which the property donated is specifically described; otherwise it is void. The Inventario Matrimonio executed in 1942 by Gregorio and Regina in favor of Delfin and Fortunata was void because it was not notarized and therefore not a public instrument. Nevertheless, a donation propter nuptias can still serve as a legal basis of adverse possession despite noncompliance with formal requisites, and a private document of donation can be the basis of a claim of ownership if there is clear and convincing evidence of possession. The lower courts erred in applying acquisitive prescription because the subject land is registered under the Torrens system. Section 47 of Act No. 496, enacted in 1902, already declared that registered land is not subject to prescription, and Section 47 of Presidential Decree No. 1529 expressly provides that no title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession. The Court found the lower courts' reliance on Heirs of Maningding vs. Court of Appeals and Imuan vs. Cereno misplaced because the lands involved in those cases were untitled and covered only by tax declarations, unlike the instant case with an original certificate of title. Jurisprudence, including Bishop vs. Court of Appeals citing Legarda vs. Saleeby, holds that titled or registered lands cannot be acquired by prescription or adverse possession, because the Torrens system aims to quiet title and allow the registered owner to rest secure. Thus, respondents' 50-year possession could not ripen into ownership by acquisitive prescription. However, ownership of registered land may be lost through laches. Laches is the failure or neglect for an unreasonable or unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier, warranting a presumption that the right holder abandoned the right or declined to assert it. It differs from prescription: prescription concerns the fact of delay and is fixed by law, while laches concerns the effect of delay and is principally a question of inequity or unfairness of permitting a stale claim to be enforced. The elements of laches are: (1) conduct on the part of the defendant or one under whom he claims, giving rise to the situation complained of; (2) delay in asserting the complainant's right after knowledge of the defendant's conduct and after 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 if relief is accorded to the complainant. All elements were present. As early as 1942, Delfin and Fortunata occupied the land upon acceptance of the donation and possessed it in the concept of an owner; they built a house and tilled the land, and their children later built houses and lived there. Respondents remained in public, exclusive, and peaceful possession for almost 50 years until 1993, when petitioners began occupying portions due to the Deed of Succession and Adjudication. Petitioner Ernesto admitted that respondents solely occupied the land, and petitioners presented no evidence that their predecessors possessed it or asserted any claim or contested respondents' exclusive occupation. They filed no action to recover their purported share and offered no explanation for the inaction. This unreasonable delay allowed laches to set in. The Court cited Catholic Bishop of Balanga vs. Court of Appeals, where laches barred a claim after 49 years; Marcelino vs. Court of Appeals, where laches set in after almost 50 years; Claverias vs. Quingco, where laches applied after 36 years of adverse possession plus failure to act; and Lola vs. Court of Appeals, where laches applied after 32 years. Petitioners' and their predecessors' 50-year inaction converted their claim into a stale demand. Silence, delay, or neglect in asserting rights for an unexplained long period gives rise to a presumption that the claim has no merit. Allowing the claim would result in irreparable injury under unfair circumstances. Vigilantibus, non dormientibus, jura subveniunt.

• Validity of the Deed of Succession and Adjudication: The Court agreed with the CA that it was immaterial whether Delfin's thumbmark was spurious or genuine, because Delfin and Fortunata had already acquired ownership over the subject land by laches at the time the Deed of Succession and Adjudication was executed. Petitioners and their predecessors had lost their right over the land because they slept on their rights for 50 years, and they were stripped of any claim as heirs of Gregorio and Regina. Their neglect resulted in respondents' possession ripening into ownership before the deed was executed. Petitioners could not adjudicate the land among themselves, whether judicially or extrajudicially, because it no longer formed part of the estate of Gregorio and Regina. Since petitioners were divested of their rights to possess the land, the CA correctly affirmed the trial court's order to cancel the duplicate copy of the OCT in their favor.

• Damages: Moral damages may be awarded in case of physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission. Respondents clearly underwent physical suffering and mental anguish from petitioners' act of occupying the subject land. Human experience dictates that anyone in peaceful possession of property, believing in good faith that he or she owns it, would experience severe anxiety and stress if another person suddenly intrudes. Thus, the award of moral damages was proper. Attorney's fees were also in order because respondents were forced to litigate to protect their interest over the subject land, a portion of which petitioners had occupied.

• Registered land not subject to prescription or adverse possession — Under Section 47 of Act No. 496 and Section 47 of Presidential Decree No. 1529, no title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession. The rationale is that the Torrens system aims to quiet title and allow the registered owner to rest secure, as explained in Bishop vs. Court of Appeals citing Legarda vs. Saleeby. The Court applied this doctrine to hold that respondents' 50-year possession could not ripen into ownership by acquisitive prescription because Lot No. 2161 was covered by OCT No. 27351.

• Laches — Laches is the failure or neglect for an unreasonable or unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier, warranting a presumption that the right holder abandoned the right or declined to assert it. It differs from prescription: prescription concerns the fact of delay and is fixed by law, while laches concerns the effect of delay and is principally a question of inequity or unfairness of permitting a stale claim to be enforced. The elements are: (1) conduct on the part of the defendant or one under whom he claims, giving rise to the situation complained of; (2) delay in asserting the complainant's right after knowledge of the defendant's conduct and after 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 if relief is accorded to the complainant. The Court found all elements present and held that ownership of registered land may be lost through laches.

• Donation propter nuptias — A donation propter nuptias is one made before the celebration of marriage, in consideration of the same and in favor of one or both of the future spouses. Under Article 1328 of the Old Civil Code, it must be made in a public instrument in which the property donated is specifically described; otherwise it is void. The Court applied this to declare the 1942 Inventario Matrimonio void for lack of notarization. However, a private document of donation may still serve as a legal basis of adverse possession if there is clear and convincing evidence of possession.

• Subject index requirement in appellant's brief — Section 13(a), Rule 44 requires an appellant's brief to contain a subject index with a digest of the arguments and page references, and a table of cases alphabetically arranged, textbooks and statutes cited with references to the pages they are cited. Its absence warrants dismissal under Section 1(f), Rule 50. The Court applied this to hold that the CA correctly found the appeal should have been dismissed, although the CA still resolved the merits.

• Moral damages and attorney's fees — Moral damages may be awarded for physical suffering, mental anguish, and similar injury if proximately resulting from the defendant's wrongful act or omission. Attorney's fees may be awarded when a party is forced to litigate to protect its interest. The Court applied these principles to sustain the awards in favor of respondents.

• "Section 47. Registered Land Not Subject to Prescriptions. — No title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession." — This statutory rule, quoted from Presidential Decree No. 1529, is the basis for the Court's holding that acquisitive prescription cannot apply to the registered land in this case.
• "Laches is defined as "the failure or neglect for an unreasonable or unexplained length of time to do that which by exercising due diligence, could or should have been done earlier warranting a presumption that he has abandoned his right or declined to assert it."" — This is the Court's canonical definition of laches, which it used to distinguish laches from prescription and to explain why petitioners' 50-year inaction barred their claim.
• "True, the subject land is registered under the Torrens system. Nevertheless, an ownership of registered land may be lost through laches." — This passage states the ratio decidendi: while prescription cannot defeat a Torrens title, laches can cause the loss of ownership of registered land.
• "The following are the essential elements of laches: (1) conduct on the part of defendant or one under whom he claims, giving rise to the situation complained of; (2) delay in asserting complainant's right after he had knowledge of the defendant's 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." — This enumeration provides the four-part test the Court applied in finding that laches had set in.

• Estate of Vda. de Villegas vs. Gaboya, 527 Phil. 355 (2006) — Cited for the rule that failure to comply with the requirements for an appellant's brief, including the subject index, warrants dismissal of the appeal.
• Del Rosario vs. Court of Appeals, 311 Phil. 630 (2005) — Cited together with other cases where the appeal was dismissed for violation of Section 1, Rule 50 of the Rules of Court.
• Bucad vs. Court of Appeals, 290-A Phil. 185 (1992) — Cited for the same procedural rule on dismissal of appeals for noncompliance with the Rules of Court.
• Heirs of Maningding vs. Court of Appeals, 342 Phil. 567 (1997) — Distinguished; the land involved was unregistered, so acquisitive prescription applied there but not to the registered land in this case.
• Imuan vs. Cereno, 615 Phil. 489 (2009) — Distinguished; the lands were untitled and covered only by tax declarations, unlike the Torrens-registered land in this case.
• Bishop vs. Court of Appeals, 284-A Phil. 125 (1992) — Cited for the rule that titled or registered lands cannot be acquired by prescription or adverse possession.
• Legarda vs. Saleeby, 31 Phil. 590 (1915) — Cited in Bishop vs. Court of Appeals for the purpose of the Torrens system: to quiet title and allow the registered owner to rest secure.
• Spouses Aboitiz vs. Spouses Po, 810 Phil. 123 (2017) — Cited for the distinction between laches and prescription.
• Nielson & Co., Inc. vs. Lepanto Consolidated Mining Co., 125 Phil. 204 (1966) — Cited for the rule that laches applies independently of prescription and is based on equity, while prescription is statutory and based on fixed time.
• Catholic Bishop of Balanga vs. Court of Appeals, 332 Phil. 206 (1996) — Followed; laches barred a claim after 49 years, and the Court quoted its discussion on stale demands and estoppel by laches.
• Marcelino vs. Court of Appeals, 285 Phil. 953 (1992) — Followed; laches set in after almost 50 years of inaction to recover possession and titles.
• Claverias vs. Quingco, 283 Phil. 872 (1992) — Followed; laches applied after 36 years of adverse possession plus failure to act after dismissal of the annulment case.
• Lola vs. Court of Appeals, 229 Phil. 436 (1986) — Followed; laches applied to titled land after 32 years of failure to assert claim and ownership.
• Valencia vs. Locquiao, 459 Phil. 247 (2003) — Cited for the definition of donation propter nuptias and the requirement that it be made in a public instrument.
• Chung Ka Bio vs. Intermediate Appellate Court, 246 Phil. 556 (1988) — Cited for the essential elements of laches.
• Spouses Timado vs. Rural Bank of San Jose, Inc., 789 Phil. 453 (2016) — Cited for the award of attorney's fees.
• Miguel vs. Catalino, 135 Phil. 229 (1968) — Cited in relation to the cancellation of the duplicate copy of the OCT.

• Section 13(a), Rule 44, Rules of Court — Requires an appellant's brief to contain a subject index with a digest of the arguments and page references, and a table of cases alphabetically arranged, textbooks and statutes cited with references to the pages they are cited. Applied to hold that the absence of a subject index warranted dismissal of the appeal.
• Section 1(f), Rule 50, Rules of Court — Provides a ground for dismissal of an appeal for failure to comply with the requirements for an appellant's brief. Applied to hold that the CA correctly found the appeal should have been dismissed.
• Article 633, Old Civil Code — Cited by the RTC as requiring a gift of real property to appear in a public instrument to be valid. The RTC relied on this in declaring the donation void for lack of notarization.
• Article 1328, Old Civil Code — Provides that a donation propter nuptias must be made in a public instrument in which the property donated is specifically described; otherwise it is void. Applied to declare the 1942 Inventario Matrimonio void for lack of notarization.
• Section 47, Act No. 496 — Enacted in 1902, it declared that a registered land is not subject to prescription. Cited to support the rule that registered land cannot be acquired by prescription or adverse possession.
• Section 47, Presidential Decree No. 1529 — Expressly provides that no title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession. Applied to hold that acquisitive prescription could not ripen respondents' possession into ownership.
• Article 1106, Civil Code — Cited in relation to prescription, which is the acquisition of ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law. Used to distinguish prescription from laches.
• Article 2217, Civil Code — Provides the bases for moral damages, including physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Applied to sustain the award of moral damages.

Gesmundo, C.J. (Chairperson), Zalameda, Rosario, and Marquez, JJ., concur.