Title
Casipit vs. Court of Appeals
Case
G.R. No. 96829
Decision Date
Dec 9, 1991
Dispute over Lot No. 144 ownership: Casipits claimed possession since 1930, but SC ruled for Diaz spouses, citing good faith purchase, prescription, and insufficient evidence. Ejectment and damages upheld.
ownership claim
vacate property
reconveyance
A

Case Summary (G.R. No. 96829)

Factual Background: Acquisition, Reconstitution, and Subsequent Sale

The trial court found that, on July 21, 1919, Urbano Casipit purchased Lot No. 144 from the government. On June 7, 1923, Urbano Casipit assigned his rights over the lot to Gabriel Beato because Urbano defaulted in paying the installments due. In 1932, a tax declaration over the lot was issued in Gabriel Beato’s name, and on February 23, 1933, Patent No. 31464 was issued over the property in his name by Friar Lands Agency No. 2. Gabriel Beato later died on October 7, 1945.

After his death, a tax declaration in Emiliano S. Casipit’s name was issued in 1945, but it covered only three hundred thirty (330) square meters of Lot No. 144. Emiliano Casipit paid real estate taxes for several years, including 1945 to 1949, as well as 1950 and 1954. The trial court then found that, on November 25, 1961, Gabriel Beato’s heirs executed a document entitled “Kasulatan ng Pagmamana at Paghahati,” wherein they adjudicated the properties among themselves and, within the same document, sold the questioned property to the Diaz spouses. At that time, the trial court stated that there was no occupant on Lot No. 144 and that Emiliano Casipit was residing in an adjoining lot.

The heirs’ title was later reconstituted. On January 6, 1962, Narciso Beato filed a petition for reconstitution of titles before the Court of First Instance of Laguna, and it was granted on July 17, 1963. On August 30, 1963, TCT No. RT-7880 issued in Gabriel Beato’s name. Subsequently, it was cancelled by TCT No. T-27996 in the heirs’ names, which was then cancelled by TCT No. T-27997 in the Diaz spouses’ names.

In 1965, petitioner Antonia C. Casipit Vda. de Beato and Julian Almadovar erected their respective houses on portions of the lot. On October 8, 1981, Severino Diaz filed a criminal complaint for violation of P.D. No. 772, but it was dismissed by the fiscal on March 26, 1985, on the ground that the lot was not among the areas approved for inclusion in the government’s slum improvement and resettlement program, so that the decree did not apply. Later, on June 6, 1985, Diaz spouses filed an ejectment case (Civil Case No. 1601) against Antonia Casipit before the Municipal Trial Court of Sta. Rosa, Laguna. That ejectment case was suspended in light of the filing of the present action.

The Petitioners’ Civil Action: Reconveyance, Rescission, and Damages

On April 27, 1987, petitioners filed a complaint in the Regional Trial Court of Binan, Laguna for primarily: (a) recovery of ownership over Lot No. 144, (b) cancellation of TCT No. RT-7880 and subsequent titles, (c) reconveyance of the property, and (d) rescission of the “Kasulatan ng Pagmamana at Paghahati” insofar as it included the questioned property. Petitioners also prayed for damages and attorney’s fees.

Petitioners’ theory was anchored on their alleged long and peaceful possession of the lot “since 1930,” and on tax declarations and tax payments. They alleged that their ownership was deprived through a fraudulent reconstitution of title initiated by Narciso Beato, who allegedly used fictitious documents to cause the issuance of TCTs in Gabriel Beato’s line. Petitioners thus sought cancellation of the reconstituted title and the subsequent transfer instruments, and they requested rescission of the document effecting the transfer to the Diaz spouses.

Private Respondents’ Position: Better Right, Good Faith, and Counterclaim

Respondents denied petitioners’ allegations and asserted, through their answer and counterclaim, that petitioners and all persons deriving title from them should vacate the property and pay rentals, moral and exemplary damages, and attorney’s fees. Respondents maintained the validity of their acquisition and sought compensation for petitioners’ continued occupation.

Trial Court Disposition: Dismissal and Monetary Awards Against Petitioners

On July 11, 1989, the trial court dismissed the Second Amended Complaint and ordered petitioners to pay the Diaz spouses PHP 5,000.00 as attorney’s fees. The trial court’s core reasons were several.

First, it found petitioners’ evidence of possession insufficient. It treated their claims of continuous possession “since time immemorial” as self-serving, based on the testimonies of Antonia Casipit and Clara Casipit Calderon. Second, it compared the tax declarations. It noted that Tax Declaration No. 2561 was issued only in 1945, covered only three hundred thirty (330) square meters, and did not indicate the prior tax declaration it had cancelled. In contrast, it found that Tax Declaration No. 7233 in the name of Gabriel Beato was issued in 1932 and covered the entire Lot No. 144. Third, it held that petitioners’ claim that Emiliano inherited from Urbano the land covered by Tax Declaration No. 2561 could not prevail over the “ancient documents” showing that Urbano, after defaulting, had assigned his rights in 1923 to Gabriel Beato.

Fourth, it rejected petitioners’ reliance on possessory acquisition of ownership. The trial court held that possession of only a portion could not “ripen” into ownership because lands registered under the Torrens system could not be acquired by prescription or adverse possession. It further reasoned that petitioners’ cause of action was based on fraud and had prescribed, because petitioners were required to file within the relevant prescriptive period after the cause of action arose. It treated the issuance and registration of the reconstituted title as the reckoning point.

As to cancellation of title, the trial court refused to cancel the Diaz spouses’ title, stating that petitioners failed to prove ownership and that the reconstitution order had become final and conclusive on Gabriel Beato’s title. On damages, the trial court ruled petitioners were not entitled to damages, attorney’s fees, or costs. It found the Diaz spouses were entitled to attorney’s fees due to the unsuccessful attempt to eject petitioners since 1985, though it found no competent evidence for actual damages. It also denied moral damages, concluding that no bad faith or malice had been proven on petitioners’ part.

Court of Appeals Ruling: Affirmance, Ejectment, Rentals, Moral Damages

Both parties appealed. Petitioners assailed the dismissal of their complaint. Private respondents assailed the trial court’s refusal to grant their prayer for rentals and moral damages, among others.

On August 22, 1990, the Court of Appeals affirmed the dismissal of the complaint but modified the reliefs by ordering petitioners to vacate Lot No. 144 and to pay: (a) reasonable rentals of PHP 300.00 a month from October 1981 until they vacated; (b) moral damages of PHP 30,000.00; and (c) attorney’s fees of PHP 5,000.00. It denied costs. On January 11, 1991, the Court of Appeals denied petitioners’ motion for reconsideration.

Petitioners’ Assigned Errors Before the Supreme Court

Petitioners then filed a petition for review on certiorari and assigned errors focusing on: the alleged failure of the Court of Appeals to properly thresh out issues; the alleged probative value of a Certification issued by the Bureau of Lands (referred to as Exhibit “D” or “Annex ‘F’”) that, petitioners argued, negated the issuance of the patent in Gabriel Beato’s name, rendering the “Kasulatan” void and imprescriptible; and the alleged violation of petitioners’ right to due process because the award of ejectment and damages was said to be based on an ejectment case to which petitioner Emiliano Casipit was not a party and in which the trial court allegedly found no evidence to warrant ejectment. Petitioners also insisted that the Diaz spouses were buyers in bad faith due to petitioners’ alleged possession and tax payments, and due to their alleged knowledge that the title reconstitution had not yet produced the relevant Torrens title as of the execution date of the “Kasulatan” in 1961.

Supreme Court’s Treatment of Prescription and the Nature of Petitioners’ Claims

The Court of Appeals adopted the trial court’s prescription analysis and rejected petitioners’ argument that the action was imprescriptible. The Court of Appeals recognized that, in general, reconveyance based on a void contract is imprescriptible, but it held that petitioners’ action did not rest on a claim of void contract. It characterized petitioners’ cause as one for reconveyance based on fraud and, separately, rescission of the “Kasulatan ng Pagmamana at Paghahati.” Thus, it ruled that the action was subject to prescription.

On the fraud-based reconveyance theory, it treated the issuance and registration of the reconstituted title over Lot No. 144 and its registration in the Register of Deeds as the start of the prescriptive period. It found that petitioners filed their case only on April 27, 1987, which was beyond the applicable prescriptive period. The Court of Appeals also referenced settled jurisprudence on prescriptive periods for reconveyance claims grounded on fraud relating to registered land, including that reconveyance based on fraud or implied or constructive trust ordinarily prescribes in ten (10) years, reckoned from the issuance of the certificate of title.

Supreme Court’s Acceptance of the Court of Appeals’ View on Good Faith Purchase

With respect to the Diaz spouses’ status, the Court of Appeals held that they were buyers in good faith and for value. It relied on the definition of a good faith purchaser: one who buys property without notice of another’s right or interest and pays a full and fair price at the time of purchase or before notice of such adverse claim. It found that, at the time of purchase, there was no structure or occupant on Lot No. 144, while Emiliano Casipit was then residing in an adjoining lot. The Court of Appeals also treated as determinative the fact that, when the Diaz spouses purchased, they were shown ancient documents evidencing the Beatos’ acquisition and ownership, namely Exhibits 2, 2-A, 3, and 4. Under thes

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