G.R. No. L-36359 - Bucton vs. Gabar

Case Summary (G.R. No. L-36359)

Factual Background

The trial court found that Josefina Llamoso Gabar purchased a parcel of land from the spouses Villarin and that, by verbal agreement with her sister-in-law Nicanora Gabar Bucton, Nicanora would pay one-half of the price and would own one-half of the land. In January 1946 Nicanora paid P1,000 and received a written receipt (Exhibit A) describing that sum as part payment of one-half of the purchase price. Nicanora later paid P400 with receipt (Exhibit B), and petitioners advanced P1,000 in 1951, evidenced by Exhibit E. After receiving the initial payment, petitioners entered into possession of the portion indicated to them and constructed houses, collected rents, planted trees, and in 1953 caused a survey and subdivision to be made. The Villarin spouses executed a deed of sale to Josefina on January 24, 1947, and a Torrens certificate issued in her name. Defendants repeatedly refused to execute a deed of conveyance in favor of petitioners, citing a mortgage with the Philippine National Bank against the whole parcel.

Trial Court Findings

The trial court accepted the evidence that petitioners paid a total of P1,500 toward one-half of the lot and that they had been in actual, continuous possession of the portion allocated to them from the time of the initial payment. The court found the receipts persuasive to prove the payments and found that the subsequent deeds and possession consummated the sale as to the portion claimed by petitioners. The court ordered defendants to execute a conveyance for the portion described as Lot 337-B in the subdivision plan, to present and surrender TCT No. II for cancellation, and to pay petitioners P1,500 attorney’s fees and costs.

Court of Appeals Ruling

The Court of Appeals reversed and dismissed the complaint. It reasoned that the action was based on the written receipt dated January 19, 1946 (Exhibit A), and therefore fell under Article 1144 which prescribes a ten-year period for actions upon a written contract. Because the complaint was filed on February 15, 1968, more than twenty-two years after Exhibit A, the appellate court held the action barred by prescription. The court further treated petitioners’ possession as immaterial because the land was registered under Torrens, invoking Section 40 of Act 496 that registered realty may not be acquired by prescription.

Issues on Appeal to the Supreme Court

The Supreme Court framed the appeal upon whether petitioners’ action to compel execution of a deed of conveyance had prescribed, and whether the payments and possession effected a consummated sale entitling petitioners to an action to quiet title that is not barred by prescription.

Petitioners’ Position

Petitioners asserted that their payments and long continued actual possession effected ownership in their favor for one-half of the parcel and that their action sought merely to compel conveyance and to quiet title. They contended that, under prevailing doctrine, an action to quiet title by one in possession is imprescriptible and therefore not subject to the ten-year prescription for actions upon written contracts.

Supreme Court Analysis — Nature of the Transaction

The Court observed that the trial court and the Court of Appeals agreed as a factual matter that petitioners paid for one-half of the lot. The Supreme Court noted the established rule that verbal contracts of sale of real estate are valid between the parties and that, under Article 1434 of the Civil Code, when a seller who was not then the owner later acquires title, such title passes by operation of law to the buyer. Applying Article 1434, the Court found that the initial payment of P1,000 on January 19, 1946, the subsequent P400 on May 2, 1948, and the application of part of the P1,000 loan of July 30, 1951, completed the purchase price for one-half the lot and vested title in petitioners when the Villarin spouses conveyed the entire parcel to Josefina in 1947.

Supreme Court Analysis — Prescription and Possession Doctrine

The Court identified the error of the Court of Appeals in treating the case as an action upon a written contract governed by Article 1144. The Court explained that the receipts were evidence of payments but that the real basis of the action was petitioners’ ownership and possession seeking a conveyance to remove the cloud on title. Relying on Sapto, et al. vs. Fabiana and Gallar vs. Husain, et al., the Court reiterated the doctrine that where a purchaser has taken possession an

Case Syllabus (G.R. No. L-36359)

Parties and Procedural Posture

Petitioners were Felix Bucton and Nicanora Gabar Bucton who filed Civil Case No. 3004 in the Court of First Instance of Misamis Oriental, Branch IV, seeking specific performance in the form of a deed of conveyance for half of a parcel covered by TCT No. II.
Respondents included Zosimo Gabar, Josefina Llamoso Gabar, and the Court of Appeals, which entertained an appeal from the trial court judgment.
The trial court rendered judgment ordering conveyance of the subdivided lot, cancellation of TCT No. II and issuance of separate titles, and awarding attorney’s fees of P1,500 to the plaintiffs.
The Court of Appeals reversed and dismissed the complaint on grounds of prescription and the inapplicability of adverse possession to Torrens land.
Petitioners appealed to the Supreme Court from the decision and the denial of reconsideration by the Court of Appeals.

Key Factual Allegations

Petitioner Nicanora Gabar Bucton paid a total of P1,500 to respondent Josefina Llamoso Gabar as her agreed one-half share of the purchase price for Lot No. 337, as evidenced by receipts marked Exhibits A, B and E.
Respondents purchased the lot from the Villarin spouses by deed executed January 24, 1947, and were issued TCT No. II on June 20, 1947.
Petitioners took possession of the portion allegedly sold to them in 1946 and continuously occupied, improved, rented, and cultivated their portion until at least 1969.
The entire lot was mortgaged to the Philippine National Bank for a P3,500 loan contracted on June 16, 1947, which respondents cited as a reason for not executing separate conveyance.
A subdivision survey was made in 1953 with concrete monuments placed and a fence erected by respondents marking the dividing line between the portions.

Trial Court Findings

The trial court found as a fact that petitioners paid P1,500 to respondent Josefina as payment for one-half of the lot and that petitioners had long been in possession and had made improvements.
The trial court concluded that delivery of possession consummated the sale and that plaintiffs were entitled to a deed of conveyance corresponding to their portion described in the subdivision plan.
The trial court ordered specific performance in the form of execution of the deed within thirty days or by the sheriff, cancellation of TCT No. II and issuance of separate titles, surrender of TCT No. II by respondents, and payment of attorney’s fees of P1,500.

Court of Appeals Ruling

The Court of Appeals held that the action was based on the written receipt Exhibit A dated January 19, 1946, and was therefore governed by the ten-year prescriptive period of Article 1144 of the Civil Code.
The Court of Appeals concluded that the complaint filed on February 15, 1968 was barred by prescription because more than twenty-two years had elapsed since Exhibit A.
The Court of Appeals also emphasized that ownership over Torrens-registered land could not be acquired by prescription under Section 40 of Act 496, rendering alleged adverse possession immaterial.

Issues Presented

Whether the action filed by petitioners to compel execution of a deed of conveyance for their portion of the lot had prescribed.
Whether delivery of possessio