G.R. No. L-46573 - Lola vs. Court of Appeals

In 1936, respondent Dolores S. Zabala, then owner of a residential lot in Tacloban City, Tacloban, offered for sale her property comprising two adjoining parcels: Lot No. 5516 and Lot No. 5517.
Petitioners Fr. Pablo B. Lola and his sister Maxima B. Lola accepted the offer and executed the sale with an “Escritura de Venta Absoluta” on June 29, 1936, which, however, specifically mentioned only Lot No. 5516.

Lot No. 5516 measured 474 square meters and was located in the interior, while Lot No. 5517, measuring 164 square meters, fronted Sto. Nino Street.
Evidence, including letters and a sketch (Exhibits “1-A”, “4-A”, etc.), indicated that the sale offer by the respondent was for a single parcel comprising both lots.
After the execution of the deed of sale, petitioners immediately occupied not only Lot No. 5516 but also Lot No. 5517 by constructing a balcony and part of their house on the latter.

The respondent claimed that she sold only Lot No. 5516; that the deed of sale did not include Lot No. 5517; and that the petitioners’ subsequent construction and occupation constituted an unlawful encroachment.
Petitioners argued that the respondent’s written offer and the accompanying sketch clearly embodied the intention to sell the entire parcel, including Lot No. 5517.
It was later revealed that a transferor’s affidavit executed by the respondent in January 1938 contained tax declaration details covering Lot No. 5517, thereby reinforcing the understanding that both lots were intended to be transferred.
Despite the respondent’s later inaction and episodic attempts to confront petitioners in 1958 and 1966, petitioners maintained continuous, open, adverse, and peaceful possession of the disputed lot for 32 years, during which they paid the taxes for the entire property.

Initially, the Court of First Instance of Leyte rendered a decision dismissing the respondent’s complaint for recovery of real property and damages.
On appeal, the Court of Appeals first affirmed the trial court’s ruling but then modified its decision by ordering the respondent to execute a deed of conveyance covering Lot No. 5517 in favor of the petitioners.
Subsequently, the appellate court reversed its earlier favorable modification to the petitioners by holding that the respondent was the absolute owner of Lot No. 5517, basing its reversal primarily on the parol evidence rule and the content of the executed “Escritura de Venta Absoluta.”
The petitioners then filed a petition for review on certiorari, challenging the appellate court’s reversal.

Whether the subject matter of the sale (as evidenced by the written offer, accompanying sketch, and subsequent acts) included Lot No. 5517 in addition to Lot No. 5516.
Whether parol evidence is admissible to determine the actual intention of the parties when the written deed of sale appears to conflict with the contemporaneous offer.
Whether the long period of inaction and neglect by the respondent (over 30 years) constitutes an equitable defense of laches that bars her claim to recover Lot No. 5517.
Whether, notwithstanding the title still being registered in the respondent’s name, the petitioners have acquired title by virtue of continuous possession, tax payments, and the equitable principle of laches.