G.R. No. 112519 - Catholic Bishop of Balanga vs. Court of Appeals

The subject property is a portion (265.36 sq. m.) of Lot No. 1272, Balanga Cadastre in Puerto Rivas, Balanga, Bataan, originally owned by the Roman Catholic Church of Manila.
Ownership of the property passed through ecclesiastical succession—from the Roman Catholic Archbishop of Manila to the Roman Catholic Bishop of San Fernando, Pampanga and subsequently to the Catholic Bishop of Balanga (registered as a corporation on December 15, 1975).
On August 23, 1936, armed with authority from the Roman Catholic Archbishop of Manila, Rev. Fr. Mariano Sarili, the parish priest and administrator of the church properties in Balanga, executed an Escritura de Donacion donating a small portion of Lot No. 1272 to Ana de los Reyes and her heirs as recognition of her long and satisfactory service to the church.
The deed of donation was not registered with the Register of Deeds, the reasons for which remain unclear, yet Ana de los Reyes’s acceptance and possession were clearly evidenced in the document.

Before her death in 1939, Ana de los Reyes transferred the subject property to her nephew (private respondent), who then took immediate possession.
The private respondent, from 1936 onward, exercised acts characteristic of ownership by building a house on the property, declaring it for taxation purposes, and exercising control without interference for 49 years.
Despite the documentary defect in registration, the possession was open, adverse, and continuous, reflecting the fruits of an accepted donation by virtue of family transmission.

On November 5, 1985, the petitioner (Catholic Bishop of Balanga, represented by Crispulo Torrico) filed a complaint seeking recovery of possession and the eviction of the private respondent.
The trial court rendered a judgment in favor of the petitioner, ordering the respondent to vacate the premises and to pay rent from the judgment’s finality until effective vacatur.
The private respondent subsequently raised defenses, notably the doctrine of prescription (acquisitive prescription) due to the lapse of 49 years and also the doctrine of laches due to petitioner’s long inaction, among other arguments.

The Court of Appeals reversed the trial court's judgment by directing that the petitioner’s claim is barred by the equitable doctrine of laches, given the inexcusable delay of almost five decades.
The appellate court recognized that even though the property was duly registered under the Torrens system (emphasizing the principle of indefeasibility), the registered owner’s right to recover possession may be lost due to laches.
In reviewing the case, the appellate court noted that the de facto possession by the respondent from 1936, without any interruption, and the petitioner’s 49-year delay to initiate suit contributed to an inequitable outcome if the claim were allowed to proceed.

The private respondent argued that his adverse, open, and continuous possession, backed by the deed of donation (although unregistered), should preclude the petitioner’s recovery of the subject property, invoking prescription.
The petitioner contended that the application of laches, especially when involving a supposed mere administrator (Rev. Fr. Mariano Sarili) executing the donation, was contrary to settled law.
The Supreme Court considered whether the appellate court erred in applying the doctrine of laches even if the prescription issue was not an assigned error in the appeal.

Whether a Torrens title’s well-accepted principle of indefeasibility and inprescriptibility can be overcome by a claim of adverse possession or prescription when the possession is based on an unregistered deed of donation.

Is the unregistered act of donation sufficient to transfer ownership, despite the principles underlying the Torrens system?

Whether the equitable doctrine of laches can be invoked to bar the recovery of possession by the petitioner who delayed in asserting its rights for 49 years.

Does the petitioner’s inaction for almost five decades amount to an unreasonable delay rendering the claim stale?
Is it proper to extend laches, an equitable defense, even though prescription in registered lands is generally inapplicable?

Whether the appellate court may consider and rule on errors not specifically assigned in the appellant’s brief.

Can the Court of Appeals review and decide on issues such as laches and equitable defenses outside the strict assignment of errors, in light of the interest in complete justice and sound judicial administration?