Title
Caoibes, Jr. vs. Caoibes-Pantoja
Case
G.R. No. 162873
Decision Date
Jul 21, 2006
Parties entered a 1982 agreement transferring land rights; respondent filed for specific performance in 2000. SC ruled action prescribed, barred by laches, and substitution unnecessary.
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Case Digest (G.R. No. 162873)

Facts:

Parties and Agreement

  • Petitioners: Jose Caoibes, Jr., Melencio Caoibes, and Loida Caoibes (collectively referred to as the "FIRST PARTY").
  • Respondent: Corazon Caoibes-Pantoja, assisted by her husband Conrado Pantoja (referred to as the "SECOND PARTY").
  • On May 10, 1982, the parties entered into an agreement titled "RENUNCIATION AND TRANSFER OF CLAIMS, RIGHTS, AND INTERESTS" concerning a parcel of land, Lot 2 of plan Psd-162069, located in Calaca, Batangas, with an area of 54,665 square meters.

Terms of the Agreement

  • The agreement was based on a court-approved "Compromise Agreement" in Special Proceeding No. 857 and Civil Case No. 861 of the Court of First Instance of Batangas.
  • The FIRST PARTY renounced, relinquished, and transferred their rights, interests, and claims over Lot 2 to the SECOND PARTY in exchange for the SECOND PARTY paying a loan of P19,000 secured by a real estate mortgage on the property.
  • The SECOND PARTY was also subrogated to the rights of the FIRST PARTY in the land registration proceeding (LRC No. N-411) pending before the Court of First Instance of Batangas.

Subsequent Events

  • In 1996, respondent filed a motion to intervene and be substituted as the applicant in LRC No. N-411. This motion was opposed by petitioners, who denied the authenticity of the agreement, claiming it lacked the consent of their mother, the "usufructuary owner" of the land.
  • The land registration court denied respondent's motion on March 2, 1999.
  • On March 16, 2000, respondent filed a Complaint for Specific Performance and Damages (Civil Case No. 3705) before the Regional Trial Court (RTC) of Balayan, Batangas, to enforce the agreement.
  • Petitioners filed a motion to dismiss, arguing that the action had prescribed, was barred by laches, and was premature due to the failure to refer the case to the barangay lupon for conciliation.

RTC Decision

  • The RTC granted petitioners' motion to dismiss, ruling that the cause of action accrued immediately after the execution of the agreement in 1982, and the 18-year delay in filing the complaint was beyond the 10-year prescriptive period for actions based on written contracts under Article 1144(1) of the Civil Code.

Court of Appeals Decision

  • The Court of Appeals reversed the RTC, holding that the cause of action accrued only in 1996 when respondent moved to intervene in the land registration case and petitioners opposed her motion. The appellate court ruled that the prescriptive period should not retroact to the date of the agreement's execution in 1982.

Issue:

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Ruling:

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Ratio:

  1. Prescription: Actions based on written contracts must be filed within 10 years from the accrual of the cause of action (Article 1144(1) of the Civil Code). The cause of action accrued in 1982 when the agreement was executed, and the complaint filed in 2000 was beyond the prescriptive period.
  2. Laches: Respondent's 18-year delay in asserting her rights constituted laches, which bars recovery when a party's inaction prejudices the opposing party.
  3. Substitution in Land Registration Case: Under Section 22 of P.D. 1529, respondent could have presented the agreement to the land registration court and sought its recognition without needing to substitute petitioners as the applicant. The filing of a separate action for specific performance was unnecessary.
  4. Nature of the Agreement: The agreement was a valid contract analogous to a deed of sale, transferring ownership of Lot 2 to respondent upon her payment of the loan.

Conclusion:

The Supreme Court dismissed respondent's complaint, ruling that her action was barred by prescription and laches. The Court also clarified that the substitution of respondent as the applicant in the land registration case was unnecessary under the Property Registration Decree.


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